The Buzz That Works Best
By Sinan Aral, Assistant Professor of Information, Operations and Management Sciences
...viral product design may be a more cost-effective strategy than increasing spending on traditional digital advertising...
In “Creating Social Contagion through Viral Product Design: A Randomized Trial of Peer Influence in Networks,” the authors used Facebook to test two kinds of “viral product design” strategies known to produce results. In one kind, purchasers of a product proactively invite their online friends to take a look at the product they just bought. In the second, a design feature automatically notifies everyone in the buyer’s online social circle about the recent purchase.
The findings were surprising. Although the active, more personal invitation elicited more peer influence and viral effects per purchaser’s invitation, the more passive broadcast notification cut a broader swathe – generating about two and half times the amount of interest. The reason the broadcast version was more contagious boiled down to numbers: the notification simply reached more people. Put another way, the purchasers didn’t act to invite as many friends as they potentially could have. But, the invitation feature was not without its own merit. In fact, this features created more sustained engagement with the application as users were more likely to continue to be engaged if their friends adopted the product as well.
This information can guide firms wishing to design viral features into their products and trim customer acquisition costs. Says Aral: “Because implementing viral features incurs a low, one-time fixed cost and the expected return is proportional to the increase in adopters the feature generates, viral product design may be a more cost-effective strategy than increasing spending on traditional digital advertising, which incurs costs proportional to impressions or clicks.”