What is The Network Effect?

Share this Article

Author:

Understanding the Network Effect is almost critical to the life of a marketer focusing on long tail / edge-centric models.

Here is a live example of the effect in progress.

Yesterday I wrote a somewhat controversial post on this blog. Here is the traffic that resulted:

Just to be sure, yes, it’s all traffic for one post (seen below)

The thing is — almost all of these people have never visited Green & White before. So how did they hear about the blog? Why did they choose to come?

The evidence is here:

Notice all of the gmail, yahoo, and lums squirrelmail accounts.

So what does this example have to do with marketing?

Doesn’t controversy sell? Ok seriously.

Everyone who read the post proabably forwarded it to their friends and their friends and their friends.

If this was a product, I would just have to market this to one person — and the news would spread across the social networks to where people will be diving over each other to buy the product.

Provided ofcourse, that the product is actually valuable. Scratch that .. that the story around the product is valuable.

So, the product is a blog post, but maybe the story in these emails was “This raving madman is shunning lums — all students: organize yourself in groups to march out and burn buildings until he stops because we will be destroyed unless we defend our university”

That’s a good story, and it certainly drove people here in hordes with pitchforks and silver stakes.

A good actual physical product can do the same thing: A good product will automatically create a good story around it that people would want to

  • explore for themselves to make their own opinions about
  • give them an incentive to participate in the story of the product (by either sharing with others, or refining it for themselves)

Did anyone hear about or use this software Napster? Did you know they only ever marketed that product to 50 people?

They called up 50 students in 50 fraternities in 50 universities in America. “Hey man, there’s a cool new software which lets you share music files with your buddies”. That was their total marketing cost.

How many users did they have when the illegal version was shut down — 5M? 50M?

So now you know what a network effect is — the challenge: How to make one for something not controversial.

Facebook comments:

5 Comments

  • also it might help if the target persons were willing to share this and had the technology and resources (this includes time) to do that. as in the above case all the comments probably came from people who had access to internet and had time to write a comment.

    a good example is in these days if you want some thing to spread among teenagers and young people try floating out an SMS and you will be amazed at how far it goes. off course it has to be interesting to that age group.

  • True, controversy sells. Both of these examples LUMs and Napster were kindda able to create that tide. But how does the network effect work, if you have to sell something very ordinary. How does the word of mouth support something very ordinary like a toothpaste. There a million toothpaste brands, each offer probably the same ingredients and features as the other. Ok some might create a difference by calling them toothwhiteners or toothpaste for smokers. Yet everyone knows its pretty much the same product. How does the network effect apply here. Can you quote examples of ordinary products following cheap marketing strategies like, word of mouth.

  • Asim,

    Good question, and there are a number of great examples.

    I will highlight a local success story of viral marketing: Captain Safeguard.

    What could be more commoditized than soap? Yet, Safeguard has been able to create a compelling niche.

    Now, every time a child goes to his school friend and talks about Captain Safeguard, that is marketing that Safeguard isnt paying for.

    If you look at the Safeguard campaign between October and December of 2006 you will basically be able to see the network effect in action — take a look at their “Safeguard Army” numbers.

  • yes. Safeguard has done a wonderful job. Even I used to watch that animated show. Now that is innovative marketing. my personal opinion, safeguard should be on your kudos list. The campaign was amazingly successful.

Leave a Reply


*

Recent Posts

  • Events General Mobile Apps Container Run a continuation of politically motivated apps

    Container Run a continuation of politically motivated apps

    First we had Angry Imran which brought smiles and some short lived fun for us during the election campaign. Then came Gullu Butt following the incident of Model Town Lahore, which stayed on top of charts (Pakistan play store) for quite some while. Also Gullu Butt made an update with having the famous “Aam Khaiyga” quote form Aamir Liaqat in which a character resembling Aamir Liaqt throws mangoes and the Gullu Butt character tries to catch them. Gullu butt currently has more than 100,000 Installs

    And now during this extremely politically tense situation which had the whole nation on its toes on 14th August we have another app continuing the …

    Read more →
  • Announcements Featured Startup General Meritaleem.com aims to help student make better decision regarding their future.

    Meritaleem.com aims to help student make better decision regarding their future.

    MeriTaleem.com aims to solve an age old problem for our students, where to go next?

    If you have just completed your primary school which college to pick, if you have completed your college which university to pick. There has always been lack of information or rather consolidated information regarding these questions. The best source till now has always been relatives and friends (mostly of your parents). So some uncle did CA and made a good living you should talk to him and decide, or daughter of my sister completed her medical and is practicing follow that career.

    The fact that online presence of our existing universities are limited and not …

    Read more →
  • General Mobile Apps Eccentria Technologies launches an app which shoots to the top of the charts

    Eccentria Technologies launches an app which shoots to the top of the charts

    Whoa!! this was quick so Eccentia technologies launched an app a few days ago called “Ajj Kia Pakaen” or what to cook today and today it has reached the top of charts for Pakistani Stores on iTunes and google play store.

    “Ajj Kia Pakaen” is the most common question asked at every house hold in the morning. The ladies of the family have a hard time deciding what to cook for the day. The app has a fun interface and is simple to use, you fire it up, and it gives you an option of what to cook for the day, if you like the option you can check the …

    Read more →
  • Coffee Session General Marketing/Adv Rise of facebook marketing in Pakistan

    Rise of facebook marketing in Pakistan

     

    Until a few years back we used to have closed groups and forums, which gathered the like minded people and anyone targeting the online audience would tap into that forum and market his/her services. So PakGamers , PakPassion initially even PakWheels used to be driven by members talking about what they loved, people used to create marketing and sales opportunities from within those discussions (so you could get a good router cheap or a gaming PC etc).
    The advent of facebook changed all that, most of the forum goers moved to the new social media. It also made a very attractive market place for some one who does not …

    Read more →
  • General Getting back

    Getting back

    I  have been out of blogging for a long long long time, a lot of things happening on personal front (including a little startup I have ben doing my self). However during my absence I met a lot of people who had followed GreenWhite at its peak, read the articles regularly.

    I had hope there would be some one else who would come ahead and cover everything going on and around us in the local tech world. There are some guys doing a great job, but for some reason I still could not find one source where I can go and read about everything, so my routine usually is to …

    Read more →
  • General Mobile Apps Software & I.T. GeniTeam launches official app for Pakistan Idol

    GeniTeam launches official app for Pakistan Idol

    GeniITeam has successfully launched an official app for PakistanIdol. This is one of the first collaboration between a reality game show and a local app development company. I am sure a lot more would follow. Previously we have seen seenreport becoming the basis of mostly all channels citizen reporting system (Like Geo Dost). This is a healthy sign and with the advent of 3G round the corner it should become a business generator for our local firms.

    App allows you to follow the contestants that you like, promote them, comment on live feedback on an episode. It offers official content from the show since it is developed with partnership with …

    Read more →
  • General 10Pearls and National Geographic Release A Geography Challenge App

    10Pearls and National Geographic Release A Geography Challenge App

    10Pearls, one of the leading Pakistani IT companies, has recently added another feather to its cap. This time, in partnership with National Geographic, 10Pearls has released the new and improved GeoBee Challenge App – an interactive app to challenge and grow the geographic knowledge of the users.

    Each year thousands of schools in the United States participate in the National Geographic Bee using materials prepared by the National Geographic Society. The competition is designed to encourage geography in the classroom, ignite student interest in the world around them, and increase public awareness about geography. Schools with students in grades four through eight are eligible for this entertaining and challenging test …

    Read more →
  • General 10Pearls Spins Off Game Plan8

    10Pearls Spins Off Game Plan8

    It’s heartening to see that Pakistani IT companies have now started to diversify themselves into non traditional areas, and are competing with global players in areas such as gaming. We have received information that 10Pearls, one of the leading  mobile and enterprise web development services companies in Pakistan, has spun-off a separate entity focused solely on developing and publishing casual mobile games.  The new entity, Game Plan8, will focus on creating 2D and 3D games for the iOS, Google Android, Kindle, Facebook and other platforms. Details can be seen on the company’s official press release at http://www.prweb.com/releases/2013/12/prweb11428177.htm

     …

    Read more →
  • General Telecom CCP Gives Guidelines Against Telecom Companies’ Deceptive Marketing

    CCP Gives Guidelines Against Telecom Companies’ Deceptive Marketing

    If only were there two things when it comes to the law, firstly the fear of breaking it and by passing the legal authority, and secondly, implementation of the law given full dedication, there would have been less competency and dishonesty in business and society. However, keeping good faith, the Competition Commission of Pakistan (CCP) has put forward “Deceptive Marketing Guidelines” which will maintain the Section 10 of the Competition Act, 2010. In order to enforce this part of the law and stop anti-competitive conduct on part of the telecom companies in advertising, the guidelines have been shared with Pakistan Telecommunication Authority (PTA) and other concerned telecommunication sector members, in …

    Read more →