When your friend shows up with the latest "must-have" product, it's more likely you'll buy the same product. By exploiting this phenomenon—and harnessing the information available through online social networks—marketers hope to better target products to would-be buyers.
In work presented this week at the Interdisciplinary Workshop on Information and Decision in Social Networks, researchers from the Norwegian telecom provider Telenor showed how important friend connections can be to the adoption of a product. Watching how adoption spreads within social networks could help predict whether a new product will become a viral smash, they say. The researchers looked at patterns of adoption for Apple's iPhone and iPad, as well as for the far-less-successful Doro mobile handset.
"Social networks matter when purchase decisions are made," says Pål Sundsøy, a project manager in the advanced analytics and business intelligence group at Telenor. In particular, he says, people have a higher chance of adopting a product that their friends have bought. Likewise, when people abandon a product—for example, by switching between cell-phone networks—they are more likely to jump ship if their friends do so first.