Social Media Marketing

Game Theory and the Emergence of Collaboration

verfasst von: Eric Anderson

Verlag: Springer Berlin Heidelberg

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

Preface Social media marking has been heralded as a sea change in the market- consumer relationship, but its rapid growth and rabid following among m- keters has also produced a sea of confusion. Lacking any durable framework for understanding how, why, and on what terms the consumer relationship has changed under social media, marketers pursue new venues for their newness alone – with decidedly mixed results. This book finds a theoretical framework for social media marketing in the science of game theory, with its focus on adversarial but mutually dependent relationships. Originally developed to guide nuclear brinksmanship policy during the Cold War, game theory provides the foundation for an evoluti- ary view of social media marketing. Through fascinating game theory c- cepts like the Prisoner’s Dilemma, the Stag Hunt, Self-Command, and Job Market Signaling, this study uncovers the cooperative trends that brought marketing to its present state and points the way toward marketing’s future course. I. Der Drehbuchautor und seine Rechte VII VII Vorwort Contents Chapter 1: Surviving the Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. 1 The Origins of Game Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1. 2 Game Theory, the New Media, and the NEW New Media . . . . . . . . . 7 1. 3 The Payoff Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Chapter 2: Zero-Sum Games in Traditional Marketing . . . . . . . . . . . . 13 2. 1 Zero-Sum Games and the Problem of Transparency . . . . . . . . . . . . . 14 2. 2 The Zero-Sum of Pricing Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . 16 2. 3 The Wisdom of Randomization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2. 4 Randomization and A/B Testing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2. 5 The Hazards of Entrenchment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inhaltsverzeichnis

Frontmatter

Chapter 1. Surviving the Customer

Abstract

The last decade has born witness to rapid and sweeping changes in the marketer-consumer relationship. Marketers have gained entirely new advertising and marketing platforms, but consumers have simultaneously gained an unprecedented degree of empowerment in marketing relationships, beginning in the dot-com era and culminating in the present social media era. The science of game theory, which is used to analyze mutually dependent conflicts, has particular relevance to this changing landscape, because its focus on conditions for cooperation and defection aptly describe the choices available to marketers and consumers in social media marketing. My evolutionary – as opposed to revolutionary – view of social media marketing holds that the marketer-consumer relationship can evolve toward mutual cooperation, and that an examination of digital marketing’s evolution will yield clues as to the conditions necessary for the success of social media marketing.

Eric Anderson

Chapter 2. Zero-Sum Games in Traditional Marketing

Abstract

The most basic game theory concept, the zero-sum game, describes conditions in which each gain by one player produces an equal and corresponding loss for the other. Zero-sum games have limited applicability to marketing, because marketing does produce dividends for both players when the right message reaches the right audience at the right time. But marketers have relied on zero-sum in direct marketing, especially when pricing promotions are involved. The Web has disrupted marketing zerosum strategies because of the degree of transparency it provides and the corresponding insight that consumers gain into marketing tactics. The shifting of the zero-sum equation – the minimax point – in the consumer’s favor can be seen in the rapid decline of click-through rates in banner advertising.

Eric Anderson

Chapter 3. The Prisoner’s Dilemma and the Emergence of Cooperation

Abstract

John Nash’s concept of equilibrium demonstrates how games may have sub-optimal solutions that are nevertheless stable, because neither player can improve their condition unilaterally. Advertising is inherently a sub-optimal condition for both players: marketers would prefer to win consumers without spending money on advertising, and consumers would prefer to enjoy content without being advertised to. The concept of the Prisoner’s Dilemma illuminates this condition, because it suggests that consumers and marketers could reach a more satisfying relationship if they could coordinate cooperation. Studies conducted on iterative rounds of the Prisoner’s Dilemma demonstrate this natural evolution toward cooperation and reveal a set of conditions that make cooperation possible, but they also demonstrate the fragility of cooperation and the potential for downward spirals of mutual defection.

Eric Anderson

Chapter 4. Consumer Revolt and the Rising Cost of Defection

Abstract

Consumer defection from direct-marketing tactics like traditional banner advertising has served as a catalyst for more collaborative marketing formats to evolve. Paid search advertising represents an important evolutionary step, because it involves consumers directly in assessing the quality of content and compelling advertisers to cooperate by providing relevant content. The growth in opportunities for direct consumer feedback has produced grim lessons for marketers, as consumers are able to take punitive measures against brands that defect. Instances of consumer backlash through social media, often in the form of viral videos that counter brand messaging, have produced tangible results in compelling marketers to cooperate with consumer demands. Consumers’ eagerness to punish defecting brands has both a historical basis – in marketing’s long history of defection – and a neurological basis, as individuals take pleasure in enforcing rules of engagement.

Eric Anderson

Chapter 5. Sustaining Marketer-Consumer Cooperation through Coordination Games

Abstract

Previous chapters have demonstrated that both marketers and consumers would choose more cooperative strategies if they could sustain and coordinate them. Coordination game concepts can be used to analyze this potential. Disarmament agreements in the Cold War exemplify coordination games at work; both sides have a built-in incentive to cooperate, but they must provide reassurances to the other side in order for the agreement to be trusted. The concept of the stag hunt, in which hunters reap richer rewards by coordinating their actions, describes some of the opportunities available in social media. My own concepts of the “exposed flank” strategyand the “neutral ground” strategy describe methods used effectively by marketersto signal and sustain cooperation with consumers in social media marketing.

Eric Anderson

Chapter 6. Crowdsourcing and Schelling’s Theory of Self-Command

Abstract

Coordination games require a degree of self-restraint; marketers face a natural temptation to defect in the interests of short-term gains. Thomas Schelling’s concept of self-command provides a potential antidote; a player compels themselves to cooperate by setting conditions that make defection costly or difficult. Successful self-command often involves enlisting a group in the enforcement of norms; brands have done so by opening themselves up to consumer feedback on blogs, but the more dramatic use of self-command occurs in the phenomenon known as crowdsourcing. In crowdsourcing, marketers solicit direct collaboration with consumers in identifying and developing brand assets, customer service features, and even products. Crowdsourcing must operate within certain rules of engagement in order to be succcessful, but it has the potential to be transformative in marketer-consumer relationships.

Eric Anderson

Chapter 7. Content Popularity and Spence’s Theory of Costly Signaling

Abstract

The economist Michael Spence’s groundbreaking work on costly signaling in the job market demonstrated how advanced degrees could serve as an accurate signal of candidate ability, because more qualified workers could acquire the costly signal at lower cost than unqualified ones. External forces, like the proliferation of MBA programs, can devalue a costly signal over time. Marketing is undergoing such a shift in its signaling system. In traditional advertising, the high cost of media exposure signals legitimacy, irrespective of content. But the Web itself has introduced disruptions into this traditional costly signal, as entities like Google have made the popularity of content a condition of exposure. Social media marketing extends popularity-based signaling into a systemic form, in which marketers must learn new rules for gaining exposure. This has provided new opportunities for upstart brands, as well as significant disruptions and adjustments for many traditional brands.

Eric Anderson

Chapter 8. Kapferer’s Prism and the Shifting Ground of Brand Identity

Abstract

Since the concept of branding first came into vogue in the 1990’s, its practitioners have insisted that brand relationships are inherently reciprocal, and that the brand identity itself exists in the collaboration of marketers and consumers. But in practice, brand definition has largely been in the hands of marketers and has been transmitted through one-way vehicles like advertising. The social media arena provides the first practical means of true collaboration between marketers and consumers on brand definition. Just as human identity is increasingly defined by social relationships played out in virtual space, brand identity is increasingly defined by a decentralized set of networked perceptions and feedback mechanisms. Jean-Noel Kapferer’s Brand Identity Prism, which holds that brand identity occurs in a nexus between corporate image and consumer perception, forms the basis for examining the profound shift in the power dynamic toward crowd-based brand identity. Consumers now exert far greater authority over brand perception in the myriad brand conversations taking place in social media, challenging the predominance of well-financed and distributed brand campaigns.

Eric Anderson

Chapter 9. Maxwell’s Demon and the Dwindling Supply of Consumer Attention

Abstract

The physics concept of Maxwell’s Demon provides an apt metaphor for the increasing demands on consumer attention levied by social media participation; consumers must continually sort relevant and irrelevant content and connections in order to make their participation worthwhile. As more marketers participate at a greater volume in social media, they face the threat of consumer exhaustion; how much of their dwindling supply of attention will consumers devote to brands? The Volunteer’s Dilemma, in which players must set aside their short-term interests for the long-term good, illuminates this question. Marketers’ increasing demand for quantifiable results can create a perverse incentive to maximize short-term gains, at the risk of alienating consumers in a cooperative arena. The use of “counterreinforcers” that hold marketers accountable to acceptable rules of engagement may prevent mutual defection.

Eric Anderson

Backmatter

Titel: Social Media Marketing
verfasst von: Eric Anderson
Verlag: Springer Berlin Heidelberg
Electronic ISBN: 978-3-642-13299-5
Print ISBN: 978-3-642-13298-8
DOI: https://doi.org/10.1007/978-3-642-13299-5