Network Effects and Modeling
Ian Leslie’s recent Financial Times article called How The Mad Men Lost The Plot describes the marketing world for products many would consider staples of everyday American life; these are products like Coke. One of the biggest findings from this article is that the typical user of Coke, the soft drink, only buys the product once in a while. This means that most of a company’s revenue doesn’t come from the loyal customer, who buys a Coke product every day. Leslie writes that the group of light buyers don’t want to see or hear from brands that often, so a brand has to “sneak up on [the light user]”. This is one of the drivers behind a new trend emerging in the marketing and modeling world. Some brands are now requiring that, to be considered for their marketing campaign, models have to have a minimum number of social media followers. Whereas previously models were hired for their looks, today companies are incorporating network effects into their evaluation of each model. This is one of the reasons why in recent years the industry has seen the fast rise of models such as Kendall Jenner. With her millions of followers who follow her because of her lifestyle and other attributes, Ms. Jenner brings a new way to connect with light users that can help put the brands she partners with in front of more people and, therefore, drive more business to these companies.
New models entering the modeling industry now have to contend with a tipping point, a minimum number of social media followers. If the model gets fewer follower then companies want, the model is not valued as highly even if they have the right look. This is especially true when they are competing with other models that have the look and the followers. The longer that a model gets passed over and is deficient in this area the more that model loses the chance to build their portfolio and gain even more followers. Eventually, such a follower deficient model’s value decreases as time passes. On the other hand, a model that has this and the right look has the ability to land jobs that greatly help to increase their notoriety pushing their value toward Z”, z- double prime, or the value of a super model. In an article published in the digital information and news site Digital Trends, network type effects were used to predict success in the industry. Researchers in this article were able to predict the success of up and coming models based off look factors and the models social media presence and following, and out of the 8 models they predicted would be successful, at the time of the article’s publication, 6 had developed large and successful careers in the industry. Thus, this phenomenon in the modeling industry can show how network effects can change whole industries as value is derived not solely from the products functionality or a person’s look but from the amount of value other people, the public and light users, have associated with each person or item. Also, for products like Coke that need to sell large amounts to light users to meet their wall street projections, choosing models that have their own personal following helps to bring their products into contact with more potential light users and, therefore, more potential revenue sources.
Sources:
http://www.digitaltrends.com/social-media/instagram-predict-fashion-model-success/
http://www.ft.com/cms/s/2/cd1722ba-8333-11e5-8e80-1574112844fd.html
http://www.nytimes.com/2015/08/10/fashion/cara-delevingne-behati-prinsloo-social-media-activism.html
http://www.complex.com/style/2015/04/models-better-have-at-least-10000-followers-on-instagram-to-book-their-next-gig
http://www.forbes.com/sites/lydiadishman/2014/02/13/instagram-is-shaping-up-to-be-the-worlds-most-powerful-selling-tool/
https://www.yahoo.com/style/it-was-announced-on-saturday-morning-that-model-102694281417.html