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We now appear to have a new annual tradition in marketing circles to add to the ritual of excited predictions for the year ahead: the latest social network everyone must join.
Peach is the latest in a long list of apps predicted to make inroads on Facebook’s supposedly - despite all the evidence to the contrary – waning dominance, joining the likes of Ello, Kleek, Secret, Tsu, Whisper and Yik Yak.
Brands are encouraged to be the first to join because early adopters are, so we're told, “ahead of the competition”.
Buffer reports that Peach has “exploded onto the scene, breaking into the top 10 Social Networking apps in the App Store”.
Quite apart from the fact that most Facebook users have long since downloaded the app (so it won’t continue appearing in the latest downloads unless people change phones and need to do so again), there’s a rather simple way of establishing whether you should abandon existing media and focus on these networks.
The late mathematician Andrew Ehrenberg introduced the NBD-Dirichlet model in 1984. Based on the negative binomial distribution, it models category and brand purchases within a wide variety of markets, demonstrating that the ratios of non-buyers to light to medium to heavy buyers are perfectly predictable.
If a brand gains in sales, the ratios move in a predictable way, and one of the key implications is the importance of light buyers to brand growth.
It’s an empirical generalisation that can also be applied to other forms of consumption behaviour, and which can also be used to understand category behaviours amongst groups of consumers.
Its relevance to Peach lies in the fact that if someone consumes a niche brand’s product or service, they’re very likely to be a heavy consumer of the category. This means they’re very likely to also consume the market leader’s product or service too.
In How Brands Grow, professor Byron Sharp illustrates how, if we know someone buys Kettle Chips (which has a low percentage share of the crisps market in the UK), they’re very likely to buy Walkers Crisps (the market leader) too.
However, if someone eats Walker’s Crisps, we can’t make any assumptions about their crisp eating habits, because they may (like most people) just be a light buyer of the category, and only eat two or three packets of crisps a year.
Similarly, if someone watches QVC, we know they’re very likely to watch a lot of TV, and will also watch ITV regularly too. However, if someone watches ITV, we have no idea which other channels they watch, or how often they watch TV.
And so, if someone uses Peach (or any other new social network), we know they’re almost certainly very heavy users of social media, and therefore use Facebook, Twitter and even Instagram too.
Similarly Instagram users are very likely to be heavier social media users who also use Facebook, but we have no idea which other social networks someone who uses Facebook will use or how often they visit them.
All of which means, if marketers can already reach Peach users on another channel, in which they can also reach millions more people in the process too, why would they focus any effort on marketing through a niche network?
As Jerry Daykin noted in an article explaining why marketers shouldn’t quit Facebook in The Drum back in 2014, “reaching a bigger percentage of a smaller number of people still means reaching a small number of people”.
It doesn't always pay to be first.
Gareth Price is head of research and insight at The Social Partners
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