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The Power of Persuasion

The Power of Persuasion

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Published by PeerIndex
This white paper provides a perspective on the role social networks play in influencer marketing. Firstly, it highlights the basic features that commonly characterise influencers within social media platforms. Then it moves on to evaluate how social media has impacted the marketing landscape for consumers. Finally, it proposes how marketing strategies can adapt to adjust to these changes.
This white paper provides a perspective on the role social networks play in influencer marketing. Firstly, it highlights the basic features that commonly characterise influencers within social media platforms. Then it moves on to evaluate how social media has impacted the marketing landscape for consumers. Finally, it proposes how marketing strategies can adapt to adjust to these changes.

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Published by: PeerIndex on Oct 03, 2011
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11/29/2012

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The Power of Persuasion
Effective Use of Influencer Marketing
Introduction
This white paper provides a perspective on the role social networks play in influencermarketing. Firstly, it highlights the basic features that commonly characterise influencerswithin social media platforms. Then it moves on to evaluate how social media hasimpacted the marketing landscape for consumers. Finally, it proposes how marketingstrategies can adapt to adjust to these changes.
Why Do Marketers Target Influencers?
Marketers have long known the commercial value ofpeer influence. The ability of influencers to persuadepeers to interact with brands leads marketers totarget such influencers on social media platforms.You don’t needto look far to find examples to provethis point.On March 11, 2010, Conan O’Brien@ConanOBrien ) announced
The Legally ProhibitedFrom Being Funny On Television Tour’
 
on Twitter viaa single tweet. Such was the flurry of interest onTwitter that within two hours, the national 32-citycomedy tour was sold out and new shows had tobe added to meet demand.There are a multitude of psychological, sociological and economic reasons as to whyinfluencers manage to persuade others to try brands - whether implicitly or explicitly.There are three main ways in which opinion leaders can affect other users’ spendingpatterns:
influencer connectivity 
;
influencer product adoption
; and
influencerauthority 
.
Influencer Connectivity 
‘Connectivity’ is something that separates social media influencers from standard socialmedia users. There are hundreds of different types of influencer, but for ease they can bedistilled into two groups – 
connectors
 and 
specialists
.
The difference between these twogroups is seen in their social networks.
 
are identified by the largenumber of connections in their social networks.Connectors within social media platforms collectively produce over 200 billion brandmessages (impressions). This equates to each ‘mass connector’ presenting 18,600brandimpressions to theirfollowers per year. Onaverage these mass connectors have threetimes more followers than a typical user.
1
 Connectors are characterised by the rate,volume and frequency of their conversationsand engage in viral activity using Facebookcomments and Twitter. A good example of a connector is Brian Solis@briansolis ) - a marketing analyst with morethan 104,000 Twitter followers. He is very activeacross social media platforms and is perceivedas an authority on technology and social media,as well as other topics.
Specialists
 
have smaller, more tightly-knit communities, with a higher proportion of theirconnections consistingof close relationships. Specialists typically transmit their social actions through trusted networks, with a higher impact, but smaller reach, than those indispersed communities.
2
Stefan Wolff ( @stefwolff ), a professor of international security, isone such specialist whose influence lies in blog posts, reviews and recommendations.With both connectors and specialists, real-life connections have a huge impact. If a userknows the person who is sharing content or recommending something to them, it is farmore likely that they will trust this opinion over and above that of an unknown connection.
Influencer Product Adoption
Influencers are often (although not always) early product adopters. This means they arewell placed to spread product information through networks. This is important becauseinnovative influencers (or influential innovators) test out new products before other earlyadopters and the mainstream adopt them. They remove the risk of testing these newpropositions and can become advocates to new consumers. Research has shown thatproduct adoption is driven by:
3
The Power of Persuasion
 
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1 Forrester Research “North American Technographics Empowerment Online Survey, Q4 2009 (US)”http://www.forrester.com/ER/Research/Survey/Excerpt/1,10198,762,00.html2 McKinsey & Company “A new way to measure word-of-mouth marketing” by Jacques Bughin, Jonathan Doogan, and Ole Vetvik.http://www.mckinseyquarterly.com/A_new_way_to_measure_word-of-mouth_marketing_25673 “Opinion Leadership & Social Contagion in New Product Diffusion” by Raghuram Iyengar, Christophe Van den Bulte & Thomas Valente.http://marketing.wharton.upenn.edu/documents/research/Npd.pdf 
 
1.Socio-metric leadership - identifying opinion leaders by the perceived influenceattributed to them by others within their social network.
4
2.The amount of direct experience an early adopter has of the product.The combination of these twofeatures is gold dust to marketers. They can maximise boththe reach and impact of their products by targeting socio-metric leaders who have directexperience of the product.
Influencer Authority 
Influencers foster trust between each other. In a survey Nielsen found that 90% ofconsumers trust recommendations from “known people” while only 70% trustany otherform of referral. Frequently, trust is the by-product of influencer authority.
5
 McKinsey research indicates there is no homogeneous group of influencers across allproduct categories. Rather, the common denominator for influencers is that they areviewed as
trustworthy 
and
competent
. The research went on to show that only 8-10%of the population were influencers. Influencers are responsible for producing three timesthe number of word-of-mouth messages, with four times more impact, than non-influencers
6
. Increasingly, consumers are relying on a minority of social media influencersfor recommendations and expertise.Social media influencers are most valuable to marketerswhen they exhibit three features: network centrality; apredisposition to adopt early; and trustworthiness. Thecombination of these attributes gives these users a
highnetwork value
. Why does this distinction matter? Itmeans it’s possible to see the value of a customer notsimply through the lens of customer lifetime value, butrather through the lens of
customer network value
. Thisrelates to the expected increase in sales to all otherconsumers from marketing to that customer.
7
The Power of Persuasion
 
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4 One robust way of identifying 'socio-metric leadership' is through graph centrality methods. For example, by calculating the eigenvector centralityof n
×
n network matrix (the mathematical description of a social network), we can measure an individual’s influence within a social network.5 Nielsen Global Online Consumer Survey 2009 http://blog.nielsen.com/nielsenwire/consumer/global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-most/6 McKinsey & Company - “A new way to measure word-of-mouth marketing” by Jacques Bughin, Jonathan Doogan, and Ole Jørgen Vetvik.http://www.mckinseyquarterly.com/A_new_way_to_measure_word-of-mouth_marketing_25677 Predictive Marketing - “A Vital New Marketing Metric: The Network Value of a Customer” by Bob Hodgson http://predictive-marketing.com/ index.php/a-vital-new-marketing-metric-the-network-value-of-a-customer/

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