Peer Influence (Social Media) Effectiveness … Is There Such A Thing?

by R Lunde

Peer Influence (Social Media) Effectiveness


Marketers, for some time, have believed that some customers have a disproportionate influence on others when it comes to purchase decisions. There is a growing belief, and some evidence, that contagion does exist … in other words there are customers who are influencers / opinion leaders and that they tend to influence the purchase decisions of others. [Is this true?]

Importance To Marketing Initiatives


Key questions for marketers: “How do I optimize my marketing communications MROI?” “Should I invest in Social Media / Peer Influence marketing?”

Consider … Nielsen Online estimates advertisers create slightly over 2 trillion online advertising impressions each year. People [Social Media / Peer Influencers] create about 500 billion impressions on each other about products and services each year according to a 10,000-person survey conducted by Forrester research concerning blog and social media usage habits. Internet sources state “78% of consumers trust peer recommendations when making purchase decisions, but only 14% trust advertising.” The Pharma industry dedicates, by some counts, 20% of marketing budgets to peer influence marketing.


The Challenges of Peer Influence Marketing

  1. Preliminary academic research indicates that contagion does happen … i.e. there are those who are opinion leaders, and they tend to bring other customers with them.
  2. Marketers have traditionally used “mass influencers” in mass media campaigns, [product endorsements] such as celebrities, sports stars, movie / TV personalities, academics, etc. to motivate sales based on the contagion premise. A major issue is that this approach is expensive and there, to date has been no ROI story for influencer marketing.
  3. Researchers, because of social media adoption, are now discovering “micro influencers”. Micro Influencers may not have ‘formal’ positions that validate their influences, but they can be recognized as being knowledgeable and trustworthy on specific topics. Some research indicates that they can generate three times more word of mouth communications than non-influencers. Social media such as Twitter, Facebook, LinkedIn and others have all brought a dynamic growth of information and capability that is beginning to allow for the scientific identification of patterns of influence.
  4. Research, in general, has confirmed that consumers form overall evaluations of each product using a multi-attribute screen and then choose the product with the greatest utility or satisfaction. Current analysis, however, typically assumes that one consumer’s attribute preferences and product choices are independent of the choices of others. Therefore, the ability to incorporate social interactions in multi-attribute decisions is a new and important area for research.
  5. There is a growing sense by marketers, both retail and CPG, that decisions are not just made with reference to traditional / ‘formal’ marketing. Understanding and validating informal influence networks is going to be the next stage in leveraging this understandingand establishing the incremental value of social media.