The Science behind Viral marketing
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The document discusses the mechanics and effectiveness of viral marketing, highlighting that successful viral growth can lead to free customer acquisition and enhance monetization strategies. It emphasizes the importance of the viral coefficient and cycle time in achieving virality, demonstrating examples from companies like YouTube and Tabblo to illustrate these concepts. The content also provides practical steps and strategies for businesses to effectively implement viral marketing, including optimizing the viral loop and addressing customer concerns.
The Science behind Viral marketing
- 1. The Science behindViral MarketingLessons Learned
- 2. Explosive growth!YouTubeFacebookZyngaGrouponTwitterGilt GroupeAll have set records for growth ratesThe key is Virality
- 3. The Power of Viral MarketingWhen it works it is Free!!Far more effective than paid promotions and advertising campaignsIf done well can be self-sustaining + growthUnfortunately rarely achieved!
- 4. The Best Business ModelVirally acquired customers are freeMonetization(LTV)Cost ofCustomerAcquisition(CoCA)
- 5. TopicsThe Science behind Viral MarketingHow to do Viral MarketingOptimizing for ViralityMaking this work for your businessExamples
- 6. Where my experiences come fromTabbloPhotosharing siteFounded by Antonio Rodriguez, 2005Acquired by HP within 18 monthsGreat investment returnAll credit is owed to Antonio Rodriguez
- 8. The Math behind ViralityKey variables:Custs(0) The initial set of customersi The number of invites sent outconv% The percentage of invites that convert into customers
- 9. The Viral CoefficientK The Viral CoefficientK = no of invites x The conversion % (i x conv%)Turns out to be a very important variable. It equals the number of new customers that each customer is able to successfully invite.
- 10. An ExampleCusts(0) = 5i = 10conv% = 20%K = 2
- 11. The FormulaNew custs added in this cycle =New custs added in the previous cycle x KAssumes that customers only send out invites once, and not continuously in every later cycleTo calculate the number of customers at any particular cycle (c):Custs(c) = Custs(c-1) + NewCusts(c)
- 12. Sensitivity to KSee Spreadsheet model
- 13. Sensitivity to K
- 14. What we learnedViral Coefficient must be > 1to have viral growthViral Growth is a compounding phenomenonIncreasing the Viral Coefficient has a big impact on the rate of growth
- 15. YouTube versus TabbloBoth started around the same timeYouTube’s growth massively outstripped TabbloWhat was happening here?
- 16. Tabblo’s Viral LoopUser discovered TabbloWait till they take some photosUploadShare (i.e. invite others)Some portion of those think, this is great, I want to use this myselfWait till they take some photosUploadEtc.
- 17. YouTube’s Viral LoopUser discovers YouTubeSees some hilariously funny contentDecides to share that with friendsFriends see hilariously funny contentDecide to share that with their friendsThe time to infect is far shorter!
- 18. A More Sophisticated Formulat = timect = cycle timeThanks to Stan Reissfor help with the forumula
- 19. What this tells us Raised to the Power of …MultiplierShortening the cycle time has a far bigger effect than changing Viral coefficient!
- 20. Some experimentsSee Spreadsheet model
- 21. Some ExperimentsTime - tNo wonder YouTube was explosive!
- 22. Lesson LearnedReducing Viral Loop cycle time has by far and away the greatest effect on viral growth
- 23. How to do Viral Marketing
- 24. The BasicsFigure out the Viral HookWhat makes people want to share content?Content or Product/ServiceInitial SeedingUse communications networks to spreadEmail, Twitter, Facebook, Google+, etc.Refresh & Re-seed
- 25. Figure out the Viral HookSomething very compelling that the user wants to share
- 26. Viral Hook - What works:Something of Value:ApplicationsEducational contentDataThings of monetary value (Discounts and coupons)Something entertainingHumorGamesNewsInherently Viral ServicesEmail, Skype, etc.Other?
- 27. Why do people share?A paper on that here:http://marketing.wharton.upenn.edu/documents/research/Virality.pdfhttp://www.nytimes.com/2010/02/09/science/09tier.html (summary)Virality driven by physiological arousalHigh arousal, Postive (awe) – most likely to be sharedHigh arousal, Negative (anger or anxiety) – less likelyLow arousal, de-activating (sadness) – unlikely
- 28. Content TypesBlogsVideoseBooksApplications and ServicesEtc.
- 31. Using engineering for marketing
- 32. Inherently Viral ApplicationsThe most viral apps are those that are require sharing to work properly:HotMailSkypeYouTubeFaceBookEtc.
- 33. Initial SeedingThe bigger your initial seeding the betterIdentify InfluencersReach / InfluenceKlout, SocMetrics and other services emerging to helpDevelop the right relationshipListen, Strategize, Engage, MeasurePaid SeedingPaid search, Virool.com, etc.
- 34. Spread through Communications NetworksEarly days this was emailSocial Networks have turbo-charged sharingWhat you want:Low effort for the user doing the sharing
- 35. Refreshing and Re-SeedingGoogle Search (paid and organic)Creates new seedingNew Blog postsCause your existing readers to re-inviteFarmville, etc.Continue to invite by regular posts to your wall
- 36. Lessons Learned Optimizing for Virality
- 37. Lessons LearnedApply my “Unblock your Sales Funnel” principles to the viral loop steps
- 38. GET INSIDE YOUR CUSTOMER’S HEADCONCERNSHate being sold to
- 39. Find it offensive to give name and email
- 40. Don’t want to get spam sales emails
- 41. Worried that email address will be given to other marketersUNDERSTAND WHAT MOTIVATES THEMCONCERNSMOTIVATIONSWant to solve my problem
- 42. Recommendation from a friend
- 43. Education
- 45. Entertainment
- 46. Free stuff
- 47. Meeting other people like me that have insights to shareCREATE A SOLUTION THAT ENTICES THEM AND ADDRESS THEIR CONCERNSCONCERNSENTICE & ADDRESS CONCERNSCustomer testimonials address vendor risk
- 48. Free trials address product viability and fit concerns
- 49. Lowest price guaranteesExample: Groupon
- 51. Another strategyOffer a reward both to the user and to their friendOvercomes the feeling of being sleazyCan lead to much higher success rates
- 52. Lessons LearnedMaximize the number of invites they send outLeverage tools that provide easy reach to their friends:TwitterFacebook: post to their News StreamLinkedInAutomate access to their address bookWorks well for GMail, and other on-line address booksEtc.
- 53. Lessons LearnedLook for ways to automate the whole invitation processNo thinking requiredNo work required
- 55. Don’t just invite onceLook for ways to keep repeating invitesE.g. Facebook games like Farmville that post to your News Stream
- 56. Lessons LearnedLook for other ways to get your customers to tell their friends about youExample: ConstantContact’s email signature
- 57. Reduce the Cycle Time
- 58. Lessons LearnedHybrid ViralEven if you can’t get a viral coefficient > 1you can still enhance customer acquisitionwith some virality
- 59. Lessons LearnedThe Viral Loop is an important FunnelDesign each step carefullySimplify and eliminate manual stepsTest for adequate motivations and incentivesAddress concernsA/B test each stepMetrics to evaluate and improve
- 60. Make it work for your BusinessCreepyEffective
- 61. What can go wrong? - BranchoutSocial networks are for hanging out with friendsNot promoting your businessBranchout (recruiting app on Facebook) Spammed users walls with way too many entries
- 62. The Result:Thanks to paulamarttila.posterous.com
- 63. Some Fun ExamplesFor a full set, visit:http://www.ignitesocialmedia.com/social-media-examples/viral-marketing-examples/
- 64. For More informationVisit my blog at www.forEntrepreneurs.com