Do friends influence purchases on a social network?

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The findings identified within the data set three main groups of users, which I refer to as the Normals, the Joneses, and the Hipsters. These findings are consistent with the middle-status conformity thesis, a sociological phenomenon that segments individuals into three groups on the basis of status within the community.

 The Normals

These individuals represented 48 percent of the study group. These users had the least amount of activity on Cyworld. They visited other users' pages the least (low outdegree) and also had the least amount of other users visiting their pages (low indegree). The Normals showed zero social influence on buying decisions, resulting in a zero impact on sales.

 The Joneses

These individuals represented 40 percent of the study group. They showed a moderate level of activity on Cyworld in terms of time on site, indegree, and outdegree. The Joneses showed a "keeping up with the Joneses" behavior by purchasing items that friends within their network purchased in the past. The study found a positive social effect on the Joneses' buying behavior that resulted in a 5 percent increase in sales for this group.

The Hipsters

These individuals represented 12 percent of the study group. These users showed the highest levels of activity on Cyworld in terms of time on site, indegree, and outdegree. The Hipsters showed a 14 percent negative effect on buying behavior as a result of social influence. The study postulates that, "To maintain distinctiveness, these users tend to reduce their purchases of items when they see their friends buying them."

s:inc.com