Tag Archives: economist

Behavioral effects of Social Media Networking websites

Ever wonder why people post on the wall on Facebook rather than sending direct e-mail?  It is because people want to be visible and to be  recognized.  This is an example of online social grooming behavior.  Social grooming offline consists of exchanging pleasantries and small talk with people.  Social grooming amongst friends consists of checking-in (e.g. what’s up? what’s going on?, etc.)

On Facebook, there are applications such as online quizzes that reveal people’s interests to others, these are interactive, in which friends can comment and share the results to others.  These activities are mostly used by Generation Y as a way of self-expression.  The “about me” sections on Facebook and MySpace as well as the decoration of their profiles on MySpace are other examples of individuality and self-expression.  Generation X is the fastest growing demographic on Facebook, because of the need to reconnect to old acquaintances, and is driven by the curiosity about the status of former high school and college friends.  Gen Xers tend to use it as a social utility to communicate with the past versus Gen Yers who use it to strengthen with their current friends and acquaintances.

Ever wonder how some people on Facebook have over 500 friends? Is it even possible they have too many of them? It takes much mental computation to keep track of all of them.   There is a number called the Dunbar number, which states that most people cannot keep track more than 150 friends.  Even though we are more connected more than ever, it does not necessarily mean we have better connections with them. We continue to keep in contact with a select few number of friends.  According to this article in the Economist, the statistical breakdown for men versus women in the number of friends are the following:

Thus an average man—one with 120 friends—generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall”. An average woman is slightly more sociable, responding to ten. When it comes to two-way communication such as e-mails or chats, the average man interacts with only four people and the average woman with six. Among those Facebook users with 500 friends, these numbers are somewhat higher, but not hugely so. Men leave comments for 17 friends, women for 26. Men communicate with ten, women with 16.

An issue that may arise is if one does not want to continue to communicate with some acquaintances  online on Facebook, MySpace and other social media networks or offline.  The difference between online and offline friend behavior, is that offline, meeting people occurs in a short period of time, afterwards, you may not see them again.   Online once you add a friend, “unfriending” them becomes politically onerous.

How has the recession affected brand strategy?

Many advertisers and marketers position their brand message to Maslow’s higher order needs (e.g. the need for belonging, esteem, self-actualization) on the pyramid.   Has the message changed as a result of the recession?

Mr. John Gerzema, author of Brand Bubble argued that because of the recession we need to embrace the lower order needs (e.g. the needs for safety and physiological protection) on Maslow’s hierarchy.  Fear and uncertainty are on the rise.  The marketers that will have a competitive advantage from this recession will replace passion with compassion.  Evidence of this includes Hyundai’s current campaign called Hyundai Assurance, which lets any Hyundai owner walk away from their lease or loan on a new Hyundai vehicle, if they lose their job within 12 months of the purchase.  In the first quarter of this year, the entire automotive industry in the US was down 38.4% between March 2009 YTD versus March 2008 YTD.  While Hyundai’s sales were up 0.7% during that same period.

There are a few businesses that have succeeded in the recession. Evidence is apparent with the Match.com, The Economist Magazine, LoveFilm and MTV.  In these four case studies, all are able to adapt to people’s interests as a result of people cutting back in their budgets.  The most compelling case study is with The Economist.  Its rich content about the recession and the banking crisis certainly appeal to people, but in my opinion,  it is its creativity in leveraging different media such as its podcasting, online content, magazine content and its educational guides on various subjects such as advertising that help differentiate this magazine with others.