NBA 600: Session 24Large Networks and Smart Mobs

17 April 2003

Daniel Huttenlocher

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Today’s Class

Announcement: presentation timeslots, post on Web by Monday– If have particular constraints let me know

Large networks – social and technological– Properties of these networks– Some ramifications for marketing and

advertising

Smart mobs– Groups of inter-connected people

• Flocking, swarming behaviors

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Network Structures

Regular networks– Slow, thorough information spread– Engineered

Small world networks– Fast, thorough information spread– Social

Random networks– Fast, sporadic information spread– Arbitrary (doesn’t happen much)

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Small World Networks

Arise in wide range of social contexts– Original experiment: forwarding letters to a

recipient in distant city, with no address• About 6 hops, not equidistant

The Internet has a small worlds structure– Some distant connections, many local ones

• Not regular structure like phone networks

– Created by independent agreements among many entities – “social process”

Links between Web pages also have this kind of structure

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Properties of Small World Networks

Six degrees of separation– Postulated that any two elements are close

together• Number of intervening elements to reach them

Hubs and authorities– Hubs: elements of network that know about

many others• List keepers, social butterflies

– Authorities: elements of network “trusted by” or “referred to” by many others• Knowledge sources

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Some Small World Networks

Web– Authorities: news sites, blogs, product sites,

reviews, etc.– Hubs: homepages, link pages, search engines

File sharing– Authorities: those sharing many files– Hubs: lists of where content can be found

Computer help– Authorities: experts about systems (you use)– Hubs: people who know who (you should) ask

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Growth of Small World Networks

IM has grown to 41M home users– Started with teens and pre-teens– Spread along social networks

• Groups that knew/saw each other regularly

– Lower density of “long distance” connections

Became accepted as new communications medium– Being adopted in corporate sector– Planned or deployed in digital cellular services

Internet grew in similar manner– But started at/between universities

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Marketing Microsoft’s 3 Degrees

Trying to create demand for small world network product– Software for community building

• Bringing IM and file sharing together

– Involvement of students in design and testing– Addressing legal issues of copyrighted content

Trust and reputation– Support for “vouching for friends”, “who to

trust”

Eventual goal of broad collaboration tool that goes well beyond IM or Net Meeting

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Power Laws

Linear relationship on log-log plot– E.g., number of people vs. wealth

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100

1,000

10,000

100,000

1,000,000

10,000,000

Assets $000’s20 400 8,000 1.28B

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Normal or Bell-Shaped Curve

Power laws fundamentally different from normal or bell-curve distribution– Normal: most people clustered around mean

• Small number of “outliers” above and below• Height, weight, etc.

Not 10 1000 meter tall people and millions of 1-2 meter tall people

Properties of individuals are often normally distributed

Properties of small world type networks often follow power law distributions

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Small World Connectivity

Power laws are common– Very small number of elements that have an

extremely large number of connections and vice versa

– Exponential differences• Linear on logarithmic scales

Connectivity among Internet routers– Various research projects demonstrate power

law relationship• Number of routers vs. number of connections to

other routers Certain “key” routers very highly connected

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Exploiting Small World Networks

Identify the small number of participants that have vast resources/connectivity/etc.– Can be worth spending much more effort

marketing to• Because of what they can spend or do• Because of impact that they can have on others

Identify and incent hubs and authorities– Incentives for authorities to learn, like and

recommend your product– Incentives for hubs to refer to positive

authorities

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Reaching Out to Authorities

Marketing targeted at technology experts– E.g., software/hardware for university

programs

Not necessarily decision makers, but consulted in decision making– Decision maker may not have knowledge to

make educated decision – weighs other factors

Other examples– Marketing to teens/children– Finding trend-setters within a community

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Using Hubs to Get Word Out

Traditional broadcast and publishing media blur hub/authority distinction– Wide reach, generic content and market

Social hubs– E.g., Tupperware, new neighbor

Online hubs: Web search engines– Wide audience but very specific content based

on queries– Attempts to influence search rankings– Payment for search ads

• Estimated at $1.5B in 2002; Overture, Google

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Google’s AdWords

Known for high quality search results– Want ad results of similar high quality

Place link-like ads above and to side of search results – Presence and rank of ads reflects their value

Advertisers bid for search terms (words)– Specify per search term maximum price willing

to pay for each click-through of ad link– Ranking of ad links based on bid and clicks

• Ads clicked on more are ranked higher and can also be charged less

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AdWords Bidding

Click through rate (CTR) is fraction of times ad is clicked on when its shown– Google requires minimum CTR’s of 0.5-1.0%

For each bidder compute ctr*bid– Larger rank value means higher in list

Actual payment on a click determined by next highest bidder

• I bid $2 and have CTR of .02, rank value of .04• Say next bidder has rank value of .03

I pay $1.50 per click (because .03=1.50*.02)

– Note if my CTR goes up, cost goes down

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Potential of Search Term Ads

Search term ad revenue grew last year even as overall web ads declined

Google results not public; for Overture– $668M in revenue last year– Avg. price per click up to $.35 from $.23 y-o-y

Mainstream advertisers have been slow to pick up – relevance over style– NYT article reports upscale clothing business

went from 10 sales/mo using eBay to 120/mo using Google AdWords

– Doesn’t support “lifestyle” type campaigns

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Online vs. Offline Worlds

Content sites on the Web are authorities– People turn to them for information

Becoming an authority on the Web is not easy– E.g., widely read weblogs– But different barriers from offline media

• More about valuable content than other things

Hubs in offline world– Tend to be individuals or companies that have

the right relationships

Wide reach of online hubs is relatively new

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Smart Mobs

Being hyped as the next revolution– Akin to introduction of mainframe, PC, Internet– Group behaviors of networked individuals

• Results from interactions of people simultaneously in physical and online worlds

Groups of teenagers congregating based on cell phone, text messaging, web– E.g. parties “posted” by other than organizers

Protesters organizing online– E.g, Seattle WTO protests, anti-Estrada

movement in Philippines, anti-war movement

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Power of Mobile Web

Web allows many people to be reached more easily– Once informed about where to check,

participants can get latest updates• Efficient compared to “phone trees” or fax

Updates and access from mobile devices provide latest information on-site– In protests, have been used to respond to

efforts by authorities

Role of reputation highly important– What information to act on

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Reputation Systems

Have seen for specific sites such as Amazon, eBay, chess club

Do more general reputation systems provide value– Web sites for finding or providing experts have

not yet done very well

Does value increase for mobile devices– Finding people or businesses nearby, right now– Role of reputation versus other factors such as

cost and proximity

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Some Implications for Business

Independent and powerful groups of your customers can form– What they say and think can impact sales and

company reputation– E.g., Turbotax copy protection

Emergence of “always online” generation– Used to making last minute decisions based on

input from a group• Different purchasing dynamics – potential for more

and larger fads

Even more fragmented attention– Not just TV-shortened span but also multiplexed