3. 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
4. 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)
5. Maslow’s need hierarchy
• Creativity
• Personal accomplishment
Self
Actualization
• Need for respect, reputation
• Respect for others
Self-Esteem /
Ego
• Professional and personal
relationships
• Need for love and belonging
Social
• Secure
• Protection from theft,
violence, instability
Security / Safety
• Basic survival
• Food, clothing shelter
Physiological
7. 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
9. 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
11. 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
12. 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
13. 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
15. 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)
16. 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
17. 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