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You may be asking yourself, “This research around adoption curves is all fine and interesting but how does it apply to digital marketing?”

Great question. Let’s walk through it with a real-world example from Apple.

Apple’s Brand Ecosystem

Rogers outlined five characteristics that influence a person’s decision to adopt or reject an innovation.

Here’s how Apple plays off this brilliantly (From Diffusion of Innovations).

1. Relative Advantage – How improved an innovation is over the previous generation.
   For example, is the new iPad that much better than the previous? Over a laptop? Over a Microsoft or Amazon product?
2. Compatibility – The level of compatibility that an innovation has to be assimilated into an individual’s life.
   In short, how hard is it to integrate this into my daily life? An iPod is very easy to integrate as Steve Jobs famously said when introducing it to the world, “A thousand songs in your pocket.”
3. Complexity – If the innovation is too difficult to use an individual will not likely adopt it.
   Consider touchscreen interfaces vs. multiple menus: We’re in a hurry. We’re lazy. We don’t want to think. Tap a button and experience an app – an iPhone is so intuitive toddlers can quickly use them.
4. Trialability – How easily an innovation may be experimented with as it is being adopted. If a user has a hard time using and trying an innovation this individual will be less likely to adopt it.
   Is there a sandbox to try it out in first? Think of the Apple retail store experience which is specifically designed to get users interacting with all the devices in a casual way.
5. Observability – The extent that an innovation is visible to others. An innovation that is more visible will drive communication among that person’s peers and personal networks and will in turn create more positive or negative reactions.
   Consider the ubiquitous white headphones that drove the original print campaign for Apple and showed off to the world how that person was listening to an iPod.

Twitter’s Adoption vs. Awareness paradox

Note: Awareness and adoption are two distinct metrics and it’s important as a digital marketer not to confuse the two.

While awareness is important, it is adoption of a solution that drives an economic engine as it can be monetized. People can know about an iPod but it’s the act of them adopting the device into their lives by buying the product and content on iTunes that makes Apple so profitable.

It’s also worth noting that adoption can mean many things in digital – subscribing to an email newsletter, liking a brand on Facebook, following on Twitter/Instagram, or grabbing an RSS feed. It’s more commonly referred to as “engagement” and we’ll cover the nuances of this later in the Strategy and Measurement sections.

Which One Are You?

Tying Metcalfe and Moore’s Law Together

Let’s take a brief second to understand how these two laws overlap in a real-world example to better understand the implications for the case of traditional print media. We now know that both Metcalfe’s and Moore’s Laws are exponential in nature which, to drastically simplify, means they increase very quickly in a short amount of time.

Craig’s List

In 1995, Craig Newmark began sending emails to a list to friends featuring events in the Bay Area. By 1996, he had moved to make the emails a web-based service. At that time, server space was very expensive to rent so the site was initially limited in the cities it would support. As word of mouth grew, more people started using the website and the demand for the service took off.

Here is where Metcalfe’s Law comes into play – the more people that join the network, the network becomes exponentially more valuable. If nobody used Craig’s List, it would have quickly died off and been buried in the graveyard of web properties following the dot com bust in the early 2000s. But the site was incredibly useful (albeit ugly) and people flocked to it in droves. 

So for a digital property to grow very fast, it has to have the ability to do what technologists call “scale”. Scaling means the technology or company can handle massive growth in a short amount of time. For websites it often refers to the ability of a digital property to handle traffic where more and more users are accessing and uploading content. (You may remember the scene from the movie The Social Network where Mark Zuckerberg screams at his partner, “Facebook doesn’t crash!”).

When sites’ crash they come under tremendous loads of traffic and in short it zaps the servers ability to serve up content. Twitter for example has had numerous problems in this area when major news events break and has resulted in its infamous “Fail Whale” being shown on the site.

Moore’s Law to the Rescue

What Moore’s Law does is step up and help companies afford to scale. As we covered, consumers get better technology for less cost since the infrastructure doubles every two years. In the example of Craig’s List, we see that the cost to host and serve up content falls very quickly. Which means that new users can continue to join the network in greater and greater numbers.

The cost to the entity offering the service does not necessarily increase in direct relation to the number of users joining. If your marketing a web service or company these are good problems to have.

So, these two laws are critical to intelligently discussing digital marketing.

The pace of change will not slow down. Instead, it will get faster thanks to Moore’s Law. It will lead to more and more smarter devices connected to the web. Whether your digital property grows exponentially or not will owe a huge debt to Metcalfe’s Law. If nobody was posting on Craig’s List there would be no value in going on the website (i.e. network).

What caught traditional print newspapers flat footed was how quickly people pulled away from posting classified ads in their daily paper. It was just faster, easier, and cheaper to sell stuff on Craig’s List. In addition, you can post a picture in color – all for free. This shift completely caught the newspaper industry off guard and a legacy revenue stream that had been constant for decades dried up almost overnight. The ease of use and usefulness of Craig’s List makes it an irresistible network to join (thanks to Metcalfe’s Law) as it provides tremendous value for linking up buyers and sellers and does this for free (thanks to Moore’s Law). Both of these value propositions are directly linked back to Metcalfe and Moore.

If you’re following along what jumps out at you as the major challenge with getting traction on a digital property? You should be thinking value propositions and rest easy knowing Moore will help you scale.

The sting of the early stages of Metcalfe’s Law

As you can probably guess, getting early consumers to join and participate on a network is incredibly difficult. Do not underestimate how hard it is to earn people’s attention and provide an ongoing return on investment of that simple gift.

Fortunately, a social scientist that grew up in the Depression and started studying seed farmers provides us a good outline for combating the early sting of Metcalfe’s Law and getting it to work in our favor.

Moore’s Law and Growth of Technology

Why Social Networks Are So Hard for Marketers

The conundrum of launching a network is how do you get early users (i.e. customers) to join when you have so few on the network? In short, every purchaser of technology in the 20th century (and for most of time) has had to ask themselves, “Is this thing really worth the hassle of signing up?”

Imagine how hard it would be to sell the first telephones when hardly anyone else can use it. It takes a special demographic to be an initial buyer of such a disruptive technology. But as more and more people buy a telephone (and thus join the network) it becomes increasingly important for non-users to own one as well. After all, the value in joining a network is the experience of the interactions with other users that occur by being on one network.

How to Build a Network

Back to marketing the first telephones: As a marketer, you’d maybe position the product on user cases that they need a telephone to connect with loved ones. Or for emergencies. Or to do business. These special cases start to represent strong value propositions for a new user to adopt the technology.

Note: This is very important. If the network can establish brand dominance, it will over time literally force users to join if they want to interact with other users. The power of the network becomes too strong to resist adoption and literally pulls users in if they want to communicate with their social circle. (Facebook has executed brilliantly on this fact.)

Therein lies the strong impetus for a new user to join the network and is essentially what Metcalfe’s Law is all about – that the number of unique connections in a network due to the number of nodes can be roughly expressed mathematically as n(n-1)/2.

Which means:

• Two telephones can only make one connection: 2((2-1)/2) = 1. So the “value” is roughly one. Not much right?

• But five telephones can make ten connections. 5((5-1)/2) = 5*2 = 10

• And Twelve can make 66 connections. 12((12-1)/2) = 12(6.5) = 66

If we were to plot these numbers, we would start to see some interesting growth…

Notice how the number of nodes being added (telephones in this example) grows at a fairly predictable clip over time? A mathematician would call it linear growth.

But the connections representing value in red, while growing at a fairly steady rate at first, all the sudden increase very quickly over time despite the fact that the number of telephones being added is nowhere near as rapid.

Key Concept: So with just a few more nodes added, the network suddenly becomes way, way more valuable due to all the connections created exponentially thanks to Metcalfe’s Law.

This is what mathematicians call exponential growth and is at the heart of how things like Facebook can go from 0 users to 800 million in only seven years. (It’s also the classic “hockey stick” chart that every starry-eyed web entrepreneur puts into their business plans to pitch to venture capitalists.)

And this growth is incredibly difficult to achieve.

Let’s compare Facebook’s growth against the above chart example for telephones – do you see the obvious overlap of Metcalfe’s Law visually?

Here in this example, we can use minutes spent on a social network as a proxy for measuring the value of that network. We see that Facebook bumps along at a fairly linear rate from June to September in 2008. Than it starts to climb as more people join the network. In June 2009, it takes off and does not slow down in its quest to dominate our time against all other social networks.

This is Metcalfe’s Law in action.

Source: Comscore

While room for debate remains on whether Metcalfe or Reed’s Law is correct when applied to the web, the big idea to keep in mind is that networks can scale to large numbers very quickly – commonly referred to as exponential growth. The near instantaneous nature of the Internet is what helps make this exponential growth possible. We’ll come back to this later when we discuss viral marketing and why things spread across a network very quickly but now you understand how.

It is worth noting that Metcalfe’s Law is not an absolute perfect law. The “value” of the network is highly dependent on the user’s pain points but nonetheless it represents a good rule of thumb to consider when considering ramping up an online community and staying motivated when the growth does not immediately happen. If we look at the chart, we see quite a bit of time where the value and the connections barely climb at the same rate. This linear growth was true even for Facebook up until roughly June 2009.

Perhaps there is no better ironic example of network theory than that of grandparents who grew up with a young technology called the telephone and are today joining Facebook to communicate with their grand kids.