In the Malcom Gladwell best selling book ‘The Tipping Point’, Gladwell identifies types of people who have the power to influence others so much so that the opinion, views or ideas held by whole communities or societies can be changed. He uses names such as Innovators, Early Adopters, Connectors and Mavens to point out shared traits between the people who fall into these groups and possess this power.

In theory, every time a marketer wants to sell a new product, all they need do is distribute information about the product, whether contained within an advert, press release or free sample, and target the influential few who will pass on the message to the masses.

In reality however finding these groups of people is not always so easy.

Enter into the picture a dozen or so Nordic intellectuals with PhD’s from Helsinki University of Technology, specializing in data analytics and you have Xtract. A company that has developed mathematical algorithms to analyze social networks and identify the type of people who are the central focus of online communities and have the ability and wherewithal to ‘spread the word’ about ‘cool’ new products.

Talking to AdMarkTech, Jouko Ahvenainen, Chief Strategy Officer & Co-founder of Xtract stated “The social network analytics is something that we have developed since 2004, before there were any social networking services on the Internet. When we talk about social network, we don’t mean only Facebook or MySpace. We can analyze all data that describes how people interact with other people. We have done solutions for many telephone companies, especially mobile operators. Interactive data including how people make calls, send messages and how they forward advertising. The normal calls are actually a very important source of data. Regarding Internet communities we can analyze where people can send one to one messages, belong to discussion forums and make comments and how people interact with other people. The behavioral and the social network analytics is a factor with much more than ‘who are your friends on Facebook’.”

By defining and identifying ‘Alpha Users’, Xtract analytic technology can provide advertisers with a much clearer picture of their target audience. Defining ‘Alpha Users’ as a human networking hub and someone who loves to communicate and share new technology with others, Xtract’s analysis affords advertisers with a more educated and informed method of behavioral targeting. Xtract’s products can find Alpha Users and Communities among hundreds of millions of users in Internet or Mobile, and profile all customers and communities.

According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents. In addition online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. (“Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape,” Jupiter Research, March 2007). With these statistics in mind, here are some case studies provided by Xtract:

Targeted Mobile Advertising

Customer

• European Directories, Fonecta the leading telephone directory and content company

Service

• Fonecta Finder is an SMS information inquiry service
• In addition, the users receive a mobile coupon from a third party advertiser

Challenge

• To deeply understand customers, their behaviour patterns and their profiles
• Optimize relevancy of targeted ads to the customer

Automated Solution

• User segmentation with fully automated customer profiling

Used for:

• Targeting SMS marketing, including Fonecta’s own and external campaigns
• Measuring the effectiveness of SMS marketing in different segments
• On-line personalization of SMS messages
• Understanding and developing the customer behaviour

Results

• Over a period of three months, Fonecta ran over 10 third party advertiser campaigns using Xtract’s solution for targeting
• These campaigns received in average 30% better response than previous similar campaigns
• Average ad price from 11 cents to 20 cents

Monetising Digital Communities

Customer

• A magazine publication in Finland & one of the country’s most popular web site for the teenage

Objectives

• To know and understand the people using the web site
• To bring more subscribers of the magazine on site
• To add new magazine subscribers from the online subscriber and visitor base
• To make the web site profitable by utilizing online information for marketing to advertisers

Solution

• Phase 1: identified the most influencing users of the site, the Alpha Users, using advanced social network analytics. These made up 2% of the whole online subscriber base.
• Phase 2: the community analyses. Identified 9 web communities based on online and
• demographic data of the magazine subscribers. Created specific profiles of the whole subscriber base.

Results

• With accurate and current customer profiles customer is able to better target and be more effective in the marketing campaigns and become more efficient with their marketing spend.
• Involvement of the Alpha Users on focus groups and engaging them in creating content and actively promoting the publication in the communities around them.
• By knowing better the profiles of the users, the magazine is able to improve also their banner advertising with higher response rates. They can also charge higher premium for it too.

New Customer Acquisition

Customer

• A UK based telecom company that offers broadband, fixed line and prepaid mobile connections.

Challenge

• To increase the number of subscribers in a highly competitive saturated market where customer acquisition is a top priority of all players.

Solution

• Identifying Alpha Users within the network
• Test viral campaign: Member-get-member
• After the run of the campaign through the Alpha Users, we measured and compared the number of new customers acquired to the previous methods.

Results

• The customer acquisition grew by 25% compared to 4% with using previous marketing methods.