Behavior Under the Planning Microscope, Part 2: Social Network

Last time, I looked at behavior in terms of viral marketing. Today, we’ll look at social networks.

Most of us belong to at least one online social network. Whether it’s poster-boy site MySpace, old-school Friendster (remember that one?), or any one of the plethora of social networking sites, the so-called online social network takes on various formats and shapes with diversifying vertical (niche) and horizontal (broad) audiences.

Over 300 social networks have started up over the past two years. According to Hitwise, MySpace officially beat out Yahoo Mail and Google in terms of aggregating total U.S. Web traffic last July.

EMarketer forecasts that worldwide advertising spending on social networks will exceed $2.5 billion by 2010, the equivalent of 6.3 percent of the projected total online ad spend. Sure, Rupert Murdoch’s darling, MySpace, currently claims the lion’s share of online ad spending in social networks (with over 50 percent share of spending in 2006), but we’ve already seen other domestic and international players aggressively chipping the shares away.

Social networks are hot. So what? Aside from an ability to have the viral multiplier effect and tipping point like social computing power, what are the human behaviors that fundamentally power the formation of social networks, and what are their long-term implications for planners?

The Essence of Social Network

As group animals, humans have an innate tendency (and need) to connect with others. We live in a society where no one can truly isolate himself and live alone. Instead, we balance our individuality with group-based identity to achieve a state of social equilibrium.

Social networks have been around since the beginning of human civilization. One can argue any community-based group is a social network. These communities can assume the shape of blogs, wikis, consumer-generated content (YouTube, for example), product review sites, even e-commerce sites like and eBay, so long as they facilitate and encourage social interaction between users and share a common purpose or vision.

Though the new Web standards are quickly migrating toward a 2.0-type interaction complexity (meaning regardless of the site’s genre, all sites are gaining similar navigation tools and functions), the essence of a social network could be summarized with Adam Smith’s social theory of truck, barter, and exchange.

A social network, at its essence, is a community, a place where people can come together and create relationships with one another and lawfully express themselves freely. The feeling of belonging and the need for self-validation are at the heart of this community experience.

The Basic Human Need for Social Currency

From childhood to adulthood, we all have different social currencies that represent our identities and self-worth. Academically speaking, social currency is “the reputation score an individual or entity acquires in a particular social network that credibly reflects their value in that network.” Social currency ultimately reflects one’s reputation and image value (both monetarily and socially).

Reputation systems are a critical element of social development cooperation because they’re individually formed on a personal basis and meant to evaluate whether a society member can be trusted and accepted or not. Consider eBay’s seller rating system. It essentially creates a trust system that not only reflects traders’ level of trust and integrity but also create each individual’s status and identity within the social network.

Since identity is formulated by one’s relationships with his social networks, one’s identity is closely tied to social roles and reputations in these networks. Humans have an innate propensity to evaluate others and to be evaluated. Social currencies provide us with the self-value we seek to function as members of the community, one of the most fundamental motivations behind behaviors.

Social currencies play an important role in a society’s ability to navigate between chaos and order, between innovation and stagnation.

What Does It Mean for Planners?

CRM used to stand for customer relationship management. However, with the rise of social computing and networks, many forward-thinking companies are shifting their focus to the new CRM: community relationship management.

Although social networks can be viewed as a powerful vehicle to reach audiences in a maven-like way, their true power lies in their ability to create change. This doesn’t mean every media plan needs to have a social network component, but it does mean that for every initiative, planners should consider the community impact it can create.

In a commoditizing industry like media, we must ensure clients’ marketing investments go beyond surface value (i.e., hard assets received in trade) and capitalize on tacit value (i.e., latent social impact) in the long term. Every media solution should be designed to contribute to a grander change in society endorsed by the brand. This means in planning, social networks shouldn’t be seen as a destination but rather a critical component of the communal journey.

In part three: consumer-generated content.