The Science behind Viral marketing

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The Science behind Viral Marketing is a look at the key factors that drive growth in viral marketing. (Hint, the most important factor is not the one everyone expects.) It also looks at what is needed to get virality to work, and how to create and optimize viral marketing campaigns or viral products. One part of the presntation shows the key formulae behind viral marketing. Suitable for marketers or for product designers.

Text of The Science behind Viral marketing

• The Science behindViral Marketing
Lessons Learned
• Explosive growth!
Zynga
Groupon
Gilt Groupe
All have set records for growth rates
The key is Virality
• The Power of Viral Marketing
When it works it is Free!!
Far more effective than paid promotions and advertising campaigns
If done well can be self-sustaining + growth
Unfortunately rarely achieved!
Virally acquired customers are free
Monetization(LTV)
Cost ofCustomerAcquisition(CoCA)
• Topics
The Science behind Viral Marketing
How to do Viral Marketing
Optimizing for Virality
Examples
• Where my experiences come from
Tabblo
Photosharing site
Founded by Antonio Rodriguez, 2005
Acquired by HP within 18 months
Great investment return
All credit is owed to Antonio Rodriguez
• The Viral Loop
• The Math behind Virality
Key variables:
Custs(0)The initial set of customers
iThe number of invites sent out
conv%The percentage of invites thatconvert into customers
• The Viral Coefficient
KThe Viral Coefficient
K = no of invites x The conversion % (i x conv%)
Turns out to be a very important variable. It equals the number of new customers that each customer is able to successfully invite.
• An Example
Custs(0)= 5
i = 10
conv% = 20%
K= 2
• The Formula
New custs added in this cycle =
New custs added in the previous cycle x K
Assumes that customers only send out invites once, and not continuously in every later cycle
To calculate the number of customers at any particular cycle (c):
Custs(c) = Custs(c-1) + NewCusts(c)
• Sensitivity to K
• Sensitivity to K
• What we learned
Viral Coefficient must be > 1
to have viral growth
Viral Growth is a compounding phenomenon
Increasing the Viral Coefficient has a big impact on the rate of growth
Both started around the same time
What was happening here?
• Tabblos Viral Loop
User discovered Tabblo
Wait till they take some photos
Share (i.e. invite others)
Some portion of those think, this is great, I want to use this myself
Wait till they take some photos
Etc.
Sees some hilariously funny content
Decides to share that with friends
Friends see hilariously funny content
Decide to share that with their friends
The time to infect is far shorter!
• A More Sophisticated Formula
t = timect = cycle time
Thanks to Stan Reissfor help with the forumula
• What this tells us
Raised to the Power of
Multiplier
Shortening the cycle time has a far bigger effect than changing Viral coefficient!
• Some experiments
• Some Experiments
Time - t
• Lesson Learned
Reducing Viral Loop cycle time has by far and away the greatest effect on viral growth
• How to do Viral Marketing
• The Basics
Figure out the Viral Hook
What makes people want to share content?
Content or Product/Service
Initial Seeding
Refresh & Re-seed
• Figure out the Viral Hook
Something very compelling that the user wants to share
• Viral Hook - What works:
Something of Value:
Applications
Educational content
Data
Things of monetary value (Discounts and coupons)
Something entertaining
Humor
Games
News
Inherently Viral Services
Email, Skype, etc.
Other?
• Why do people share?
A paper on that here:
http://marketing.wharton.upenn.edu/documents/research/Virality.pdf
http://www.nytimes.com/2010/02/09/science/09tier.html (summary)
Virality driven by physiological arousal
High arousal, Postive (awe) most likely to be shared
High arousal, Negative (anger or anxiety) less likely
• Content Types
Blogs
Videos
eBooks
Applications and Services
Etc.
• Using engineering for marketing
• Inherently Viral Applications
The most viral apps are those that are require sharing to work properly:
HotMail
Skype
Etc.
• Initial Seeding
The bigger your initial seeding the better
Identify Influencers
Reach / Influence
Klout, SocMetrics and other services emerging to help
Develop the right relationship
Listen, Strategize, Engage, Measure
Paid Seeding
Paid search, Virool.com, etc.
Early days this was email
Social Networks have turbo-charged sharing
What you want:
Low effort for the user doing the sharing
• Refreshing and Re-Seeding
Creates new seeding
New Blog posts
Farmville, etc.
Continue to invite by regular posts to your wall
• Lessons Learned Optimizing for Virality
• Lessons Learned
Apply my Unblock your Sales Funnel principles to the viral loop steps
• GET INSIDE YOUR
CONCERNS
• Hate being sold to
• Find it offensive to give name and email
• Dont want to get spam sales emails
• Worried that email address will be given to other marketers

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