We examine how firms can create word of mouth peer influence and social contagion by incorporating viral features into their products. Word of mouth is generally considered to more effectively promote peer influence and contagion when it is personalized and active. Unfortunately, econometric identification of peer influence is non-trivial. We therefore use a randomized field experiment to test the effectiveness of passive-broadcast and active-personalized viral messaging capabilities in creating peer influence and social contagion among the 1.4 million friends of 9,687 experimental users. Surprisingly, we find that passive-broadcast viral messaging generates a 246% increase in local peer influence and social contagion, while adding active-personalized viral messaging only generates an additional 98% increase in contagion. Although active-personalized messaging is more effective per message and is correlated with more user engagement and product use, it is used less often and therefore generates less total peer adoption in the network than passive-broadcast messaging.
Aral, Sinan and Walker, Dylan, "Creating Social Contagion through Viral Product Design: A Randomized Trial of Peer Influence in Networks" (2010). ICIS 2010 Proceedings. Paper 44.