Can the Market Decide Influence in Social Media?

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by: Matt Rhodes

Over the weekend I wrote about Ian Schafer, who sold advertising space on his Twitter feed for a month on eBay; the item closed at $1,082.01 (see post here). This experiment interests me for a couple of reasons:

  1. Ian’s Twitter feed is followed by 520 people and so this works out at about $2 per person the advertising will reach over the month
  2. The advertising space was sold by auction and there was considerable competition for it. The final price appears to be one that the bidders felt appropriate and as such represents the market value of this advertising space

On one hand I was surprised by the relatively low fee paid for the advertising – with Twitter, people with similar interests and background tend to follow each other. So I’d expect Ian’s followers to be a fairly discrete group and one that could suit really targeted advertising. But the auction on eBay was open and included a number of bidder, so it may be that this is a fair price.

So, an open auction sold off advertising space that would effectively reach an individual’s social network. If we believe that this is a fair indicator of value of this space then it could be that this value is in fact the current true market value of advertising to Ian’s social network on Twitter. In other words this value is a reflection of the influence Ian has.

I’d love to repeat this experiment with a range of other users, or indeed on other social networks. Flooding the market in this way would, of course, have an impact on the prices paid, but it would be the relative prices that interested me most. There is much talk about measuring influence in social networks, and to me allowing the market to decide a fair price for advertising on somebody’s page would be an interesting proxy for such measurement.

The more influential somebody is, the more people that will follow them, the more those that follow them will return and the more trust they will put in what they see there. The price that somebody is willing to pay to be associated with such a person, and with their social media presence, could be an interesting commentary on the influence people believe they have. Letting the market decide the (relative?) value of somebody’s presence and contacts in social media could allow us to start to understand influence.

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