It’s an unfortunate fact that the speakers at some conferences can be self-serving; few people are going to go onstage and not promote their own company, never mind admit its faults. However, when it comes to social media, it’s hard to accuse the Wharton School of the University of Pennsylvania of bias, and so an OMS keynote on the subject run by two Wharton representatives was rather informative.
(Coverage of the Online Marketing Summit 2010 continues at WebProNews Videos. Keep an eye on WebProNews for more notes and videos from the event this week.)
Researchers at Wharton recently studied user-generated content and social networks. Eric Bradlow, Vice-Dean and Director of the Wharton Doctoral Programs, and Steve Ennen, Director of the Wharton Interactive Media Initiative, then used the findings to create a presentation called "Wharton Dispels Myths of Social, Viral and Online Marketing through Cold Hard Research."
Here’s one detail that shouldn’t be buried: the academics agreed there’s value in social media marketing. They’re not advocating that advertisers stay away from Facebook, Twitter, and the like.
Indeed, a main point the two men made was that social media behavior can be indicative of buying behavior. Put another way, this means that heavy social network users are often also heavy buyers. And this correlation opens the door to an effective – if sneaky – marketing tactic, since businesses can give a lower price to their first customer and then exploit their second customer.
The theory is that as one person engages in an activity, their peers are more inclined to want to play. So an optimal approach to making iPhone apps, for example, would be to give them away until they become popular, and then start charging.
Then one other interesting thing Ennen and Bradlow had to say related to the practice of crowdsourcing. They suggested that the "wisdom of crowds" isn’t worth much, instead qualifying as an inconsistent method of producing useful ideas. Businesses might still use crowdsourcing as a sort of marketing ploy, of course, but the academics asserted that it’d be smart not to depend on it for good product concepts.