• by Tanya Gazdik , October 12, 2010

A new study shows that consumers are more likely to show interest in a product if they see that it is already very popular.

The research, from Oxford University, shows that consumers have a herding instinct to "follow the crowd" once a clear winner is established. However, this instinct appears to switch off almost entirely if the product fails to achieve a certain popularity threshold.

The findings have implications for the retail online world. Online book retailer Amazon and the online DVD rental service Netflix already allow their users to rate the products, and as a consequence, influence their future popularity. The study concludes that while some books and films are highly advertised by their producers, that element is only a small fraction, leaving the great majority of books and films exposed to the forces of social influence.

The study is based on an analysis of how millions of Facebook users adopted software, known as apps, to personalize their Facebook pages. The researchers analyzed data that tracked 100 million installations of apps adopted by Facebook users over two months in 2007. The data allowed researchers to observe on an hourly basis the rate at which 2,700 apps were installed by 50 million Facebook users.

They discovered that once an app had reached a rate of about 55 installations a day, its popularity then soared to reach stellar proportions. A typical app was installed by 1,000 users, but the most popular app "Top Friends" was in a different league, being adopted by almost a fifth (12 million users) of the entire Facebook population.

The study concludes that social influence had a key role in whether apps became flops or hits. Crucially, when the data was monitored in 2007, Facebook friends would always be notified if one of their online friends adopted a new app. All Facebook users could also see a list of the most popular apps -- similar to bestseller lists -- so they knew how the "global" as well as their "local" community of Facebook friends rated the apps.

The analysis reveals a very interesting new finding, says senior researcher Felix Reed-Tsochas, from Oxford University's Institute for Science, Innovation and Society at Saïd Business School.

"Users only appear to be influenced by the choices of other users above a certain level of popularity, and at that point popularity drives future popularity," Reed-Tsochas says in a release. "Below this threshold, the effects of social influence are imperceptible. Because popularity seems to depend mainly on the choices of other users in the community, rather than intrinsic characteristics of the applications themselves, it does not appear possible to predict which applications will succeed and which will fail ahead of time."

Social influence may emerge spontaneously in a wide range of online environments, and these findings could tell us something about the way we behave in the offline world too, Reed-Tsochas says.

"There has been a lot of research into the spread of ideas and products," he says. "Previously, we have only been able to track the spread of successful innovations, and then only among a small set of potential users. Our research in the virtual world of online social networks is the equivalent to moving from a fixed telescope that lets us view a restricted number of stars to having a complete map of all the stars in the universe."