Executive Summary
The diffusion of an innovation is governed by, among other things, word of mouth. In social systems, growth processes are considered strongly influenced by people who have large number of ties to other people. In the social network literature, such people are called influentials, opinion leaders, mavens, or sometimes hubs. Furthermore, when the marketing literature addresses such people, the focus is typically not on how they influence the overall market but rather on either assessing their influence on people they are in direct contact with or identifying their characteristics.
Broadly speaking, influential people are believed to have three important traits: (1) They are convincing (maybe even charismatic), (2) they know a lot (i.e., are experts), and (3) they have large number of social ties (i.e., they know a lot of people). In this article, the authors focus on the third trait and present empirical findings on these “social hubs”—that is, people who maintain a large number of ties to other people—and their influence on the overall process of innovation adoption.
The authors argue that social hubs adopt sooner than other people not because they are innovative but rather because they are exposed earlier to an innovation as a result of their multiple social links. They examine this argument using an existing mapped network and data on multiple diffusion processes. They find that though social hubs have a higher absolute adoption threshold (and, thus, in a sense are less innovative than nonhubs), they adopt sooner because their exposure to those who have already adopted exceeds their threshold sooner than less connected people.
The authors then show that social hubs significantly accelerate the diffusion process. They further distinguish between innovator and follower hubs and show that the former influence mainly the speed of adoption in a network, while the latter influence mainly the number of people that eventually adopt the innovation. This difference is consistent with dual market theories: Innovative hubs adopt sooner and initiate the adoption process. Thus, if from some reason they adopt later, the entire process will start later. However, innovators are not trusted by the majority, so innovative hubs have less influence on market size. In contrast, follower hubs influence people in the main market to consider adoption. Thus, although their influence on the speed of growth is small, they have a strong influence on market size. The authors also show that a small sample of hubs can be used to make an early forecast of the entire diffusion process.
On the basis of these findings, firms would benefit from collecting information on social hubs and identify as many hubs as possible. They can use these hubs as a sample for early prediction of success versus failure or as a target for direct marketing. If the product is innovative, it would be more important to identify follower hubs that can expose it to the main market. However, if the product is incrementally innovative, innovative hubs may be more useful in making the diffusion faster and thus increase the net present value of revenues.
Biography
Jacob Goldenberg is Associate Professor of Marketing in the School of Business Administration at the Hebrew University of Jerusalem and a visiting professor in the Columbia University Business School. He received his PhD from the Hebrew University of Jerusalem in a joint program of the School of Business Administration and Racach Institute of Physics. His research focuses on creativity, new product development, diffusion of innovation, complexity in market dynamics, and social network effects. He has published in journals such as Journal of Marketing, Journal of Marketing Research, Management Science, Marketing Science, Nature Physics, and Science. In addition, he is an author of the book creativity in product innovation published by Cambridge University Press.
Sangman Han is Professor of Marketing in the School of Business Administration at SungKyunKwan University in Korea. He received his MBA from Stanford University and PhD in Marketing from Columbia University. His research interests focus on social network, diffusion of new products, and complexity in market dynamics. He has collaborated with many companies in high-tech industry. His work has been published in journals such as Journal of Marketing Research, Journal of Retailing, Physica A, Korean Journal of Marketing, Korean Journal of Consumer Research, and Korean Marketing Review.
Donald R. Lehmann is George E. Warren Professor of Business at Columbia University Graduate School of Business. He has a BS in Mathematics from Union College and an MSIA and PhD from the Krannert School of Purdue University. His research interests include modeling choice and decision making, meta-analysis, the introduction and adoption of innovations, and the measurement and management of marketing assets (customers and brands). He has taught courses in marketing, management, and statistics at Columbia and has also taught at Cornell, Dartmouth, and New York University. He has published in and served on the editorial boards of Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Management Science, and Marketing Science and was the founding editor of Marketing Letters. In addition to numerous journal articles, he has published several books, including Market Research and Analysis, Analysis for Marketing Planning, Product Management, Meta Analysis in Marketing, and Managing Customers as Investments. Professor Lehmann has served as Executive Director of the Marketing Science Institute and as President of the Association for Consumer Research.
Jae Won Hong is Assistant Professor of Marketing in the School of Business Administration at Dongseo University in Korea. He received his PhD in Marketing from SungKyunKwan University. His research focuses on high-tech marketing and customer satisfaction management. He has published in journals such as Korean Journal of Consumer Research and Korean Marketing Review. He has many years of industry experience as a consultant at DaeWoo Economic Research Institute in Korea.
Journal of Marketing, Volume 73, Number 2, March 2009
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