Wednesday, 29 April, 2009

Why viral hasn’t killed everything yet

Viral Marketing is upon us. Which means TV, radio and print should be dead. Because viral is free. HLL, P&G, Coke and LG should feel very unwell as well, because their market dominance depends a great deal on their deep media buying pockets.

Neither of the catastrophes have come to pass, yet, though they may be nearby.

Then again they may not. Why? Because the numbers don’t paint too rosy a picture.

A primary criterion for the success of viral – or for that matter, any form of marketing – would be its power to ‘infect’ a sufficient number of buyers in a reasonable time. Not forwarders alone, but buyers.

Let’s do a little thought experiment to understand where we’re heading. Lets say you need to sell 1,000 widgets. You have a conversion of 0.1%: You have to tell a thousand guys to sell a widget. Which means to sell a thousand, you need to ‘infect’ a million.

Ok, you start by sending out an email or SMS to 1,000 fellows. They’re your core, who’ll infect the 1st circle; who, in turn, will infect the 2nd circle, and so on.   

What’s the multiplier, that is, how much larger than is the n+1th round than the nth round? Let’s say the multiplier is some random number between 1 and 2.

So how many rounds do you need to ‘infect’ your million?

I repeated the experiment 80 times. The average (no of rounds) came out 17.02 (excluding the starting blast; st dev = 2.16). That’s a lot of rounds, a lot of time, very little control, and plenty of risk, isn’t it? (Here is the math:

Oh, we can try this with larger multipliers. Doubtlessly, someone’s already done that. But what matters is what we get in the real world, where everyone’s already unleashed their viruses, and everyone’s trying to get a life.

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