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Viral Recommendations Have Natural Limits

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Whether cruising around social networks or shopping online, I do pay attention to friends' recommendations -- ranging from the newest restaurant, to the hippest shoes and most effective plumber. My social circle influences my interests and purchases, and I find myself often passing on suggested links to others or checking out something mentioned to me.

But how effective are friends in actually closing the sale? In a recent study, The Dynamics of Viral Marketing (log-in required), researchers set about trying to debunk the lore of viral marketing. It turns out that each friend can influence me at first, but then loses her impact on my clicks or purchases. After a while, I'm likely to ignore her links altogether.

As marketers, this translates into our needing a constant supply of new recommenders. Sheer volume of shared links does not necessarily correlate with conversions. Based on the study, we may be heading into new territory from what we have seen in the past. Search marketing typically succeeds by having links distributed and exposed as widely as possible. Apparently, asking “related others” to recommend and link for you does not always result in a sale.

There are other dynamics involved in actual person-to-person recommendations and their effectiveness. Just a few of the study's findings concluded that:

* People like to initiate recommendations, with 94% having sent a link prior to receiving one.
* People have sway over some friends, but not all. When an individual sends out more recommendations, conversions decline.
* If more people recommend a product to an individual, it increases conversion at first. There is saturation, however, if too many people send links.
* Influence varies by product type, though more expensive products have higher conversions.

Viral recommendations do still work, and can be an effective way to get the word out about a new product or offering. Beyond the old “send to a friend,” they are even more potent on social sites as the links linger for all to see and share. We simply need to readjust our expectations about possible outcomes.


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