MSI “Best Paper” Looks at Social Contagion in New Product Adoption

April 24, 2013

MSI Best Paper Award WinnerMarketers know that social contagion can help new products gain traction, but to design effective campaigns they need to understand how and why. Who should be targeted to kick start the viral process? Which social connections should marketers try to activate? What type of message should be used?

In “Distinguishing among Mechanisms of Social Contagion in New Product Adoption,” Wharton’s Raghuram Iyengar and Christophe Van den Bulte and Jeonghye Choi of Yonsei School of Business develop a framework to answer those questions. In April, they were awarded MSI’s 2013 Best Paper Award for their work.

While multiple mechanisms of social influence have been identified in laboratory settings, “it is very difficult for managers and marketing analysts to pinpoint which of these operate in a specific category,” Van den Bulte noted. “That’s a problem, because a manager would make different decisions depending on which mechanism is at work. ” Thus, to test their framework, Van den Bulte and colleagues use data from a real market setting: physicians’ adoption of a new prescription drug.

To begin, they suggest five mechanisms of social influence: (1) spreading awareness of and interest in a product, (2) causing others to change their beliefs about a product’s risk and benefits (social learning), (3) exerting peer pressure (social-normative influence), (4) raising fears of being at a competitive or status disadvantage, and (5) installed-base effects, where the benefits of a product increase with the number of users.

Understanding which mechanism is most likely to be at work for a particular product or category will largely determine how the marketing campaign should be crafted.

MSI Best Paper looks at social contagion in new product adoption

If a campaign seeks to spread awareness and interest, for example, the marketing message must be buzz-worthy. There would be little benefit to targeting customers with above-average status, expertise, or credibility. Reaching far into the network is the main objective so seeding people with great indirect coverage should be effective. The same would be true for a product with installed base effects.

In contrast, a campaign that sought to educate consumers about the risks and benefits of a new product would leverage “social learning.” This campaign would focus on experts and other trusted network members. Since credibility matters greatly, the influence of that expert is likely to wane beyond his or her direct ties. Thus, the campaign would favor people with many direct ties as opposed to people with great indirect coverage.

Campaigns meant to leverage normative or competitive contagion would be designed differently. Members of one’s own immediate group tend to have greater normative influence than experts, whereas competition is stronger between people who are connected to the same set of network neighbors.

The authors’ real-world application was based on data on the adoption of a new prescription drug by physicians in Los Angeles, New York City, and San Francisco for seventeen months from the drug’s launch date. They predicted and found evidence of two mechanisms: social-normative influence and social learning about the new product’s risks and benefits.

The managerial question of how to leverage social contagion has generated intense debate and research. Van den Bulte and colleagues believe that focusing on the type of contagion mechanism at work would help managers make sense of research findings and navigate their way toward better-crafted and more effective campaigns.

Distinguishing among Mechanisms of Social Contagion in New Product Adoption: Framework and Illustration
Raghuram Iyengar, Christophe Van den Bulte, and Jeonghye Choi (2011)

Related links

The Social Status of Innovators, Imitators, and Influentials in New Product Adoption: It’s Not Just about High versus Low
Yansong Hu and Christophe Van den Bulte (2012) [Report]
Opinion Leadership and Social Contagion in New Product Diffusion
Raghuram Iyengar, Christophe Van den Bulte, and Thomas Valente (2008) [Report]


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