Predicting Individual Behavior with Social Networks

• Published in: Marketing science (Providence, R.I.) R.I.), 2014-01, Vol.33 (1), p.82-93
• Main Authors: Goel, Sharad, Goldstein, Daniel G.
• Format: Article
• Language: English
• Subjects: Advertising campaigns; Analysis; Behavior; Behavior modeling; computational social science; Customer services; Customers; Demography; electronic commerce; homophily; Human acts; Human behavior; Internet advertising; Marketing; Online social networking; Predictions; product; Purchasing; Social influence; Social networks; Studies; targeting; Television advertising; Theory and Practice in Marketing Conference Special Section
• ISSN: 0732-2399; 1526-548X
• DOI: 10.1287/mksc.2013.0817

With the availability of social network data, it has become possible to relate the behavior of individuals to that of their acquaintances on a large scale. Although the similarity of connected individuals is well established, it is unclear whether behavioral predictions based on social data are more accurate than those arising from current marketing practices. We employ a communications network of over 100 million people to forecast highly diverse behaviors, from patronizing an off-line department store to responding to advertising to joining a recreational league. Across all domains, we find that social data are informative in identifying individuals who are most likely to undertake various actions, and moreover, such data improve on both demographic and behavioral models. There are, however, limits to the utility of social data.In particular, when rich transactional data were available, social data did little to improve prediction.