Wednesday, January 03, 2007

Viral Marketing and Growth

Alright. I've been working with RockYou for 3 months now (part-time and fulltime). Over the past month I've gotten half a dozen calls from startups looking to understand how to 'get' viral in their business models and emulate RockYou's growth on social networks, blogs, etc. Rather than repeat myself continually, I thought I'd put some of my initial thoughts down on why RockYou has been successful growing virally (this December we saw 13MM unique visitors to the RockYou site while spending $0 in marketing).

The way I see it, there are three basic drivers for viral growth within the social networking space.

1) Engagement of BOTH the user AND viewer. I can't emphasize this point enough. Too many startups, even now, focus entirely on the user of their product. While delivering significant value to users is hugely important, it does very little to help drive viral growth. Generally people are not going to become evangelists of a product. They have no time to do it even if they truly like your service/application. What you're left with is the infamous 1% rule... and with only 1% of your users (assuming you have a great product) waxing poetic on forums and through word-of-mouth, it's gonna take a hell of a long time to go viral.

Your product needs to truly engage both users AND viewers. It's the engagement with the viewer of a widget on a social networking profile that will drive viral growth. If the viewer sees something they really like, you don't need the 'user' or profile owner to evangelize on your behalf. The viewer will simply click through and get the product for him or herself. For RockYou this meant making our widgets and slideshows really stand out through transitions, themes and music. Increasingly we're doing this by making widgets more interactive as well (ala Corkboard). By making user's photos and text 'pop' on a page, not only have we captured the viewer's interest (presenting user content that they will look at regardless), we've presented the viewer with something appealing to consider for their own content. Another example are MySpace Layouts (ala Freeweblayouts). Attractive, well-designed layouts generated a lot of value to both the user, allowing them to increase self-expression online, and great appeal to the viewer. The viewer is induced to click through to the layout provider site, generating viral growth.

If your product/service has great value to users but your widget has no self-evident appeal or engagement to the viewers of that widget, simply put, there's very limited viral upside.

2) Viral products are NOVEL products. In the slideshow space, I hazard, the opportunity for viral growth by a new player is nearly non-existant. Rockyou, Slide, MySpace and Picturetrail account for over 90% of the slideshow market. Once top players capture viral growth, it's almost a self-fulfilling prophecy, since sequential growth will continue to drive increasing market share until the user population for said product is tapped. Once that's happened new players are only stealing share through incremental improvements, not generating viral growth. Think about factor #1 above as well. If a viewer sees a new product they've already seen multiple if not numerous times, the inclination for that viewer to click through and get that product is significantly reduced. Clickthrough rates are key to viral growth, and having a me-too product competing with products that already burned through the viral spiral will elicit low clickthrough. Think video players on MySpace. Do you think there's any viral growth left in the video space? I don't.

That said, if you can create a product that take elements of current offerings and make it truly new and appealing to viewers, viral growth is once again enabled. Two great examples of this are and Both have taken the well-played out concept of photo-sharing (Photobucket won that viral race) and made completely new applications for them. These applications, photos and faces within photos applied to templates to maximize a laugh, are both extremely viral. In the case of Zingfu, within 6 months they've driven an estimated 2MM users per month to their site. Novelty combined with something truly appealing to the viewer is a powerful combination.

3) Finally, almost all of the value of your product/service offering has to be FREE. If you're not providing the vast majority of value of your products for free, simply put, you won't have any viral growth. Think Google and Yahoo. Both offer users a ton of value without cost (search, mail, fantasy sports, news, etc). They charge for access to their huge base of users via advertising and also generate revenue from users via premium services. But without a truly compelling and free reason to go to Yahoo and Google, they'd have no traffic. This era of Web 2.0 is based on this concept. Offer free products to consumers to generate massive user bases which are then monetized via ads and premium content. Yahoo, Google and eBay proved that this model can be hugely successful. But you need the massive user base first.

Well there you have it. Obviously there's more stuff which I'm keeping under my hat. Would love to hear more thoughts regarding viral marketing and growth if you have them...


Anonymous Anonymous said...

Thanks Ro for the post. I think a lot of folks, including myself, will find this extremely helpful. I think we can all take a lesson from SNL's d*** in a box in terms of the effectiveness of this stuff. (Sorry if that's profane to your readers!)

12:55 PM  
Anonymous Joe Suh said...

I also appreciated the post. Viewer engagement is a tough one to think about (for me). How many clever ways can you display pictures or video?

Was wondering if I could actually bounce some of my widget ideas off of you for our social network...

6:03 PM  
Blogger Ro said...

Just email me at Joe. Would be happy to help.

10:37 PM  
Anonymous Anonymous said...

There are viral products and viral marketing. They are not the same thing.

A viral product is a product whose value increases as its user population increases. That is value to the prospect. A telephone is a viral product. A fax machine was viral. A viral product does not have to be novel. It has to be centered around a codec. One user encodes their content and then encourages another user to decode their content. The device encodes and decodes. So to the encoding person, the more decoders there are the more value they can create. This the essence of a viral product.

Viral marketing has to be novel. It can't be boring. This is the marketing communication that is supposed to be passed on from prospect to prospect, but it is the ad, not the product that is viral.

The next big thing is mobability.

1:26 PM  
Anonymous Anonymous said...

The distinction between user and viewer can be put into the terms of broadcaster and audience, or channel (user/producer) and user (viewer/consumer).

The device can be a viral product. The content can be a viral product. It's viral squared. But, the content being viral is up to the broadcaster. The device being viral is up to the vendor of the device.

In between the device and the content is the software, the scripts, the firmware, the data, the metadata. All of these layers can be viral as well, or not. Each being viral would be up to their producers. It would be left to the primary vendor to create the ecology that lets all of this happen.

You might be surprised at the number of software vendors that don't capture their increaing returns. Likewise, they skip viral, or ecologies, or support for third-parties, and they skip their double-sided markets, and metadata markets.

These oversights provide plenty of opportunities for others to sell them the idea that they need to do these things. And, beyond that, helping them make it so.

1:35 PM  

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