Posted by [Part 2 of 4: Game theory & social media: Part 1, Part 3, Part 4]
In part 1, we saw how people love to play games. Game theory was first recognised in 1928, by John Von Neumann’s paper which was about two people playing a game together with only one winner (known as: two person game-zero sum).
If we apply game theory to social media marketing, we could say that the customer and the marketer are playing a two person game, zero sum – winner takes all. Before social media, this might have been the case, for customers believed that shops were acting in their own self interests and so they, the customer, did too. Everyone was out to get what they could. In reality though, the relationship is more of a win-win: Without the marketer, the customer might not learn about the product on offer and not buy or benefit from the product, and without the customer, the marketer doesn’t have a job at all.
Playing your customer
In his book, Social Media Marketing, Eric Anderson describes the marketer-customer as a two-way mutually dependent conflict and, points out that in the world of marketing everything is described combatively. There are marketing campaigns, killer apps and dead lists, which fit with game theory: Two parties with opposing and mutual interests both engaged in winning the outcome of combat.
For if the customer doesn’t engage and play the game then, they effectively kill the product, or even the market the product exists in. More worryingly for a marketer, if a customer engages and is an influencer, this customer with a few well placed tweets and reviews on a social computing site (their blog, Amazon, Goodreads) can begin a campaign which can sink a product. On his blog, Nathan Bransford describes how books have been effectively killed prior to publication due to bad reviews on Goodreads.
A nice equation given by Kyle Wong on Forbes describes what an influencer does as follows:
Influence = Audience Reach (# of followers) x Brand Affinity (expertise and credibility) x Strength of Relationship with Followers
Influencers have immense power to kill or create sales, which is a totally new thing in marketing. This is potentially such a powerful way to sell to millions across the globe, especially amongst certain demographics – mums, millennials – that many companies view social media marketing as the only way to market nowadays. They know that they must, like influencers, build relationships with their customers. One way to do this is by creating content.
Playing your competitor
In a great blog on coschedule.com, Julie Niedlinger, describes how game theory approaches to creating content can help marketers decide whether their strategy (another military word) is appropriate with the competitors and with their customers.
Niedlinger advises marketers to take a moment, before reacting to comments that potential customers will leave on blogs, in order to ask whether there is a game going on. If so which game? And most importantly, are the rules clear? Once they are then and only then should a marketer make a move.
Secondly, she looks at competitors producing a similar blog of content rich potentially market cornering information and asks what is the next move? Do you steal their writers? Mimic them? Join forces? Or, follow trends in an effort to win their share of the market.
It is important to know your game, it’s rules, and the moves you should be taking.
In part 3, we will look at specific game theory theories and see what moves and games we could play.
[Part 3]
8 comments