(Stanford BUS-21)Martin Westhead

Mastering Marketing

Mindshare: Reputation and Attention

How to make money by giving things away

Overview

Motivation Non-monetary Economies

- Attention- Reputation

Quantification- PageRank- Page Views / Engagement

Conversions - Reputation -> Attention -> Money

Motivation

Why would you offer a free product?- Network effects- (Related) Mindshare

Previously talked about network effects This lecture is on Mindshare

- How mindshare markets work- Conversion of mindshare to money

Non-monetary economies

Every abundance creates a new scarcity

“In an information-rich world, the wealth of information means the dearth of something else: a scarcity of whatever it is that information consumes. What

information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention” – Herbert Simon

(Social Scientist)

Maslow’s need hierarchy

Scarcity helps us navigate abundance – and keep score

Mindshare Economies

Attention Economy - TV shows compete for this

Reputation Economy - Brand compete for this

Are these really economies?- Economics: The science of choice under scarcity –

Adam Smith

Celebrity business model

Reputation Attention Money ($$)

Make / publish content

Collect royaltiesPopular content

Convert ConvertBuild

Quantifying Reputation

“If the attention I pay to others [arrow 2] is valued in proportion to the amount of attention earned by me [arrow 1], then an accounting system is set in motion which quotes something like the social share price of individual attention.

It is in this secondary market that social ambition thrives. It is this stock exchange of attentive capital that gives precise meaning to the term “vanity fair”.

–George Franck Economist, 1999

1 2

Value connection

Attention Attention

me

Reputation: Citation Analysis

Scientific papers Authors reputation

- based on number of citations Metric: Number of references to a document

references

Internet References: The URL

Uniform Resource Locator Core technology Invented by Tim Bernes Lee (1989) IETF RFC 3986 http://<domain>/<path> Like citations, links measure reputation

- Link says: Go to this other place, leave my site- If you like it maybe you will think more of me- Ideally this exchange leaves both parties richer

Reputation: PageRank

Google’s Algorithm for ranking search results Rank of a page depends on

- The number of pages linked to it- The number of pages linked of each of those- …and so on…

PageRank is a sophisticated reference metric

hyperlink

hyperlink

Quantifying Mindshare

Measure of reputation- PageRank

Measure of attention- Page Views

Google: central bank of reputation, control:- Inflation - as the web grows- Counterfeiting – via link spam

Attention Reputation Cycle

Paid trafficUser finds site

Advertiser pays for user attention

Build

SEO and marketing

Many Economies

PageRank is the gold standard of reputation- USD of reputation currency

There are other measures in Web 2.0- Facebook friends- Twitter followers- Number of bookmarks (e.g. Delicious)

Attention and Engagement

Attention (page views)- Easy to quantify- Hard to know if action is valid

- Just because someone opened a page, did they read it?

- Easy to fake - Easy to automatically generate fake page views

- Lower value to advertisers Engagement

- Complex to quantify- Too many metrics: Facebook like, a Digg, Google+1

- Mostly action clearly valid- Harder to fake

- Need many Facebook accounts to fake Likes

- Higher value to advertisers

Engagement Measures

bounce rates, CTR, days since last visit, exit rate, entrance rate, frequency, number of new visitors, number of visitors, number of returning visitors, number of bookmarks (e.g. on Delicious), number of comments posted, number of content syndication (RSS), content contribution (adding a comment, adding a review, rating, uploading an image or video), number of repeated visitors, page views, time spent (dwell time), visits per visitors, number of tags (e.g. on Flickr), number of emailed and printed stories, number of Facebook likes, number of re-tweets, number of messages sent (instant, email), number of conversions (e.g. subscribing, buying), number of Facebook fan pages, number of search queries, common paths (e.g. from front page to mail tool then exit), external comments and reviews (for products), etc …

“User Engagement – A Scientific Challenge” -Mounia Lalmas

Summary

Motivation Non-monetary Economies

- Attention- Reputation

Quantification- PageRank- Page Views / Engagement

Conversions (R -> A ->$)