Tuesday, May 26, 2009

What are friends worth?

Social network members purchase stuff differently:
  1. Low-status people (those 48% with few connections to others) do not imitate others, perhaps feeling that it will not help them gain more status; so what others in their social network do has no impact on their purchasing choices.
  2. High status people (12%) do not imitate others very much because they feel quite confident in their own judgment and are like those in the world of high fashion who choose to stand out from the masses. When others in the social network copy their purchasing patterns it tends to reduce their purchasing by a huge 14%
  3. It is only the 40% middle-status people who feel that social pressure to buy for the fear of falling in the social ranks. Here, it seems there's a 5% positive impact on purchasing choices as they "keep up with the Joness."
Recently Business Week has been asking "What is a friend worth?" Social networking sites and large advertisers can learn from this early research from Harvard Business School: members in the high status group have an influence on those in the middle status group for the diffusion of a new product. However, a successful diffusion in the middle status segment may make high status members lose interest in the new product. Find out more here