Identifying Opinion Leaders for Marketing by Analyzing Online Social Networks

The impact of social networks in customer buying decisions is rapidly increasing, because they are effective in shaping public opinion. This paper helps marketers analyze a social network’s members based on different characteristics as well as choose the best method for identifying influential people among them. Marketers can then use these influential people as seeds for market products/services. Considering the importance of opinion leadership in social networks, the authors provide a comprehensive overview of existing literature. Studies show that different titles (such as opinion leaders, influential people, market mavens, and key players) are used to refer to the influential group in social networks. In this paper, all the properties presented for opinion leaders in the form of different titles are classified into three general categories, including structural, relational, and personal characteristics. Furthermore, based on studying opinion leader identification methods, appropriate parameters are extracted in a comprehensive chart to evaluate and compare these methods accurately. based marketing, word-of-mouth marketing has more creditability (Li & Du, 2011), because there is no direct link between the sender and the merchant. As a result, information is considered independent and subjective. In recent years, many researches in word-of-mouth marketing investigate discovering influential nodes in a social network. These influential people are called opinion leaders in the literature. Organizations interested in e-commerce need to identify opinion leaders among their customers, also the place (web site) which they are going online. This is the place they can market their products.  10.4018/jvcsn.2011010105 44 International Journal of Virtual Communities and Social Networking, 3(1), 43-59, January-March 2011  Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Social Network Analysis Regarding the importance of interpersonal relationship, studies are looking for formal methods to measures who talks to whom in a community. These methods are known as social network analysis (Scott, 1991; Wasserman & Faust, 1994; Rogers & Kincaid, 1981; Valente & Davis, 1999). Social network analysis includes the study of the interpersonal relationships. It usually is more focused on the network itself, rather than on the attributes of the members (Li & Du, 2011). Valente and Rogers (1995) have described social network analysis from the point of view of interpersonal communication by “formal methods of measuring who talks to whom within a community”. Social network analysis enables researchers to identify people who are more central in the network and so more influential. By using these central people or opinion leaders as seeds diffusion of a new product or service can be accelerated (Katz & Lazarsfeld, 1955; Valente & Davis, 1999). Importance of Social Networks for Marketing The importance of social networks as a marketing tool is increasing, and it includes diverse areas (Even-Dar & Shapirab, 2011). Analysis of interdependencies between customers can improve targeted marketing as well as help organization in acquisition of new customers who are not detectable by traditional techniques. By recent technological developments social networks are not limited in face-to-face and physical relationships. Furthermore, online social networks have become a new medium for word-of-mouth marketing. Although the face-to-face word-of-mouth has a greater impact on consumer purchasing decisions over printed information because of its vividness and credibility, in recent years with the growth of the Internet and virtual communities the written word-of-mouth (word-of-mouse) has been created in the online channels (Mak, 2008). Consider a company that wants to launch a new product. This company can benefit from popular social networks like Facebook and Myspace rather than using classical advertising channels. Then, convincing several key persons in each network to adopt the new product, can help a company to exploit an effective diffusion in the network through word-of-mouth. According to Nielsen’s survey of more than 26,000 internet uses, 78% of respondents exhibited recommendations from others are the most trusted source when considering a product or service (Nielsen, 2007). Based on another study conducted by Deloitte’s Consumer Products group, almost 62% of consumers who read consumer-written product reviews online declare their purchase decisions have been directly influenced by the user reviews (Delottie, 2007). Empirical studies have demonstrated that new ideas and practices spread through interpersonal communication (Valente & Rogers, 1995; Valente & Davis, 1999; Valente, 1995). Hawkins et al. (1995) suggest that companies can use four possible courses of action, including marketing research, product sampling, retailing/personal selling and advertising to use their knowledge of opinion leaders to their advantage. The authors of this paper in a similar study have done a review of related literature using social networks for improving marketing response. They discuss the benefits and challenges of utilizing interpersonal relationships in a network as well as opinion leader identification; also, a three step process to show how firms can apply social networks for their marketing activities has been proposed (Jafari Momtaz et al., 2011). While applications of opinion leadership in business and marketing have been widely studied, it generally deals with the development of measurement scale (Burt, 1999), its importance in the social sciences (Flynn et al., 1994), and its application to various areas related to the marketing, such as the health care industry, political science (Burt, 1999) and public communications (Howard et al., 2000; Locock et al., 2001). In this paper, a comprehensive review of studies in the field of opinion leadership and employing social networks to improve the marketing response is done. 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