Chapter 9

Question 1

we call something viral if

Answer 1

it spreads widely and rapidly from one consumer to another

Question 2

Viral Coefficient

Answer 2

First, note that the more friends (on average) each of your friends can convince to adopt the app, the more viral we can consider it. We call this number of other people your average friend can convince to adopt the app a viral coefficient.

Question 3

Note that this viral coefficient is a combination of two components:

Answer 3

First, it increases with the number of people your friend shares the information about the app with.

Second, the coefficient increases with the probability of adoption (conditional on learning about the app from a friend).

Question 4

Although the viral coefficient determines how widely the app will spread, another critical factor is

Answer 4

how fast the adoption happens.

Question 5

Viral Loop Example

Answer 5

1) Customer first sees your application
2) Customer decides to try your application
3) Decides they like the app enough to invite friends
4) Creates invitation, looks up addresses, sends invites
5) Friend receives invitation
6) Friend decides to take a look

Question 6

Only once all steps have been completed in this viral loop is

Answer 6

the adoption accomplished, and this friend now re-starts the adoption cycle.

Question 7

We refer to the time between one adoption and the other as

Answer 7

viral cycle time.

Question 8

The shorter the viral cycle time (the faster it takes to go through the whole viral loop) and the larger the viral coefficient…

Answer 8

…the more viral the process.

Question 9

The shorter the viral cycle time (the faster it takes to go through the whole viral loop) and the larger the viral coefficient…

Answer 9

…the more viral the process.

Question 10

four observations about what helps make the process more viral:

Answer 10

1) Sharing with others should be easy.
2) Sharing mechanism should drive conversion (i.e., increase the probability of adoption upon learning about it).
3) Adopting (e.g., receiving a link, opening an app or browser, watching a video) should be as fast as possible, thus leading to shorter viral cycle time.
4) The time from adoption to sharing with others should be as short as possible, thus leading to shorter viral cycle time.

Question 11

VMC

Answer 11

Viral Marketing Campaign

Question 12

Typically, a VMC involves…

Answer 12

…seeding, whereby a firm sends product samples to a selected group of consumers (seeds) and asks them to generate WOM about that product and share with other consumers (masses). This approach makes VMCs very different from traditional dissemination of product-related information:

Question 13

firms are increasingly asking seeded consumers to generate WOM about their products in the form of

Answer 13

posts to online forums or social media websites, or as reviews on retail websites.

Question 14

For example, a recent industry study by the American Marketing Association and the Word of Mouth Marketing Association reports that

Answer 14

one-third of marketers either have run or plan to run campaigns in which samples are seeded with customers, and three-quarters either have used or plan to use consumers to start spreading WOM.

Question 15

What makes viral marketing so popular? This is due to two key assumptions:

Answer 15

1) Information from a social source (e.g., a friend) is more influential than when it comes directly from a company.
2) The cost of reaching and converting a consumer segment is lower with social media channels than with traditional channels.

Question 16

Once you decided that launching a VMC would be optimal in the context of your product, the first question you would need to address is…

Answer 16

…who you should select as initial seeds.

Question 17

it is important to include both __ __ an __ in your group of seed customers.

Answer 17

social hubs and pumps

Question 18

it is important to add as additional criteria for seed selection such impact-driving consumer characteristics as being a

Answer 18

product category expert, being passionate about the product, and/or being easy to relate to.

Question 19

Is it enough to select the right seeds for your VMC to be successful?

Answer 19

Only if the barriers to activation are very low.

Question 20

marketing interventions are needed to “nudge” seeds to spread product-related information, even for social pumps. Such interventions usually involve a combination of two categories of incentives…

Answer 20

…extrinsic and intrinsic.

Question 21

Extrinsic incentives

Answer 21

typically involve offering some material or monetary rewards in exchange for seeds performing a certain set of agreed-upon actions, usually associated with creating product-related content and sharing it.

Question 22

Intrinsic incentives

Answer 22

are designed for triggering seeds’ intrinsic motivation for performing various tasks facilitating information flow over their social connections (and benefiting the company behind VMC). The tasks should be designed so that they tap into consumers’ needs and desires. Such needs may include relatedness (need to interact with people with similar interests), purpose (feeling needed), and status (need to feel superior to others).

Question 23

Note that while it is possible to combine extrinsic and intrinsic rewards in one campaign, the research found that when applied to tasks that require creativity (e.g., generating original product-related content)…

Answer 23

…extrinsic rewards often harm intrinsic motivation.

Question 24

Finally, it is important to put together a schedule of providing various incentives throughout the campaign. If all (or most of) incentives happen to occur within a short time period, then…

Answer 24

…seeds will likely stop creating and disseminating product-related information after that period ends.

Question 25

Research shows that WOM on topics related to but different from a focal product might also…

Answer 25

…be affected.

For example, a VMC for Chanel lipstick in which seed consumers receive a sample product and post reviews about that product in an online community might affect the amount of WOM generated in that community about other Chanel products (i.e., spillover effects with respect to WOM about the same brand’s products in other categories) and/or about competing products (i.e., spillover effects with respect to WOM about other brands’ products in the same category).

Question 26

WOM about a focal product among consumers in one segment could spill over to affect…

Answer 26

…WOM among consumers in other segments.

Question 27

The use of __ is becoming increasingly important in the music industry, and we are now seeing more and more artists relying on them.

Answer 27

superfans

Question 28

We had also seen artists trusting their superfans so much that…

Answer 28

…they avoid traditional marketing/advertising/publicity when releasing new albums, and instead just announce a new release on social media.