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Chapter 10 E-commerce: Digital Markets, Digital Goods 425

Social E-commerce and Social Network Marketing
Social e-commerce is commerce based on the idea of the digital social graph.
The digital social graph is a mapping of all significant online social relation-
ships. The social graph is synonymous with the idea of a “social network” used
to describe offline relationships. You can map your own social graph (network)
by drawing lines from yourself to the 10 closest people you know. If they know
one another, draw lines between these people. If you are ambitious, ask these
10 friends to list and draw in the names of the 10 people closest to them. What
emerges from this exercise is a preliminary map of your social network. Now
imagine if everyone on the Internet did the same, and posted the results to
a very large database with a Web site. Ultimately, you would end up with
Facebook or a site like it. The collection of all these personal social networks is
called “the social graph.”
According to small world theory, you are only six links away from any other
person on earth. If you entered your personal address book, say 100 names, on
to a list and sent it to your friends, and they in turn entered 50 new names of
their friends, and so on, six times, the social network created would encompass
31 billion people! The social graph is therefore a collection of millions of per-
sonal social graphs (and all the people in them). So it’s a small world indeed,
and we are all more closely linked than we ever thought.
Ultimately, you will find that you are directly connected to many friends and rel-
atives, and indirectly connected to an even larger universe of indirect friends and
relatives (your distant second and third cousins, and their friends). Theoretically,
it takes six links for any one person to find another person anywhere on earth.
If you understand the inter-connectedness of people, you will see just how
important this concept is to e-commerce: The products and services you buy
will influence the decisions of your friends, and their decisions will in turn
influence you. If you are a marketer trying to build and strengthen a brand,
the implication is clear: Take advantage of the fact that people are enmeshed
in social networks, share interests and values, and communicate and influence
one another. As a marketer, your target audience is not a million isolated people
watching a TV show, but the social network of people who watch the show, and
the viewers’ personal networks. Table 10.7 describes four features of social com-
merce that are driving its growth.
In 2012 and 2013, one of the fastest growing media for branding and market-
ing is social media. Expenditures for social media marketing are much smaller
than television, magazines, and even newspapers, but this will change in the
future. Social networks in the offline world are collections of people who volun-
tarily communicate with one another over an extended period of time. Online
social networks, such as Facebook, MySpace, LinkedIn, Twitter, Tumblr, and
Google+, along with tens of other sites with social components, are Web sites
that enable users to communicate with one another, form group and individ-
ual relationships, and share interests, values, and ideas. Individuals establish
online profiles with text and photos, creating an online profile of how they want
others to see them, and then invite their friends to link to their profile. The
network grows by word of mouth and through e-mail links. One of the most
ubiquitous graphical elements on Web sites in 2012 is Facebook’s Like button,
which allows users to tell their friends they like a product, service, or content.
Facebook processes around 50 million Likes a day, or 1.5 billion a year.
While Facebook, with 150 million U.S. monthly visitors, receives most of the
public attention given to social networking, the other top four social sites are
growing very rapidly with the exception of MySpace. LinkedIn has grown 58
percent in 2012 to reach 40 million monthly visitors; Twitter grew 13 percent

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