Sunil Gupta

11 Results

 

Users Love Ello, But What’s the Business Model?

Social network upstart Ello is generating terrific buzz among users, but can it's ad-free approach compete against Facebook? Professors John Deighton and Sunil Gupta provide insights into what drives social media success. Open for comment; 0 Comments posted.

Separating Homophily and Peer Influence with Latent Space

People are often more willing to try new things when they see others doing so. This phenomenon, which academics call "social influence", has a profound impact on many aspects of customer decision-making and marketing. For example, social influence affects consumers' willingness to take up new technologies, adopt and use social networks, and ask their physicians for particular prescription medicines. Marketers are thus eager to understand how and to what extent social influence affects people's consumption decisions. To date, however, it has been difficult to pinpoint the effects of social influence, as researchers have struggled to separate it from a simple fact that like-minded people tend to enjoy the same things, per the adage "Birds of a feather flock together." The authors use the field of mobile app adoption in Japan to examine this problem. Japan is an ideal testing ground because approximately 80-85 percent of all page views occur through mobile. In addition, mobile apps are often social in nature, especially those that are linked to a social network platform. The authors devise a new method to assess social influence by controlling for other factors that usually complicate the picture. Overall, the findings show that peer usage accounts for more than a quarter of all mobile app adoptions. The paper also highlights a risk that firms could overestimate social influence by 40 percent on average, even up to 100 percent in certain cases. The authors' method helps overcome this risk. Read More

A Smarter Way to Reduce Customer Defections

Companies can't afford to lose hard-won customers, but in truth some are more important to keep than others. Recent research by Sunil Gupta and Aurélie Lemmens explains how to find them. Closed for comment; 4 Comments posted.

Managing Churn to Maximize Profits

Customer defection or "churn" is a widespread phenomenon across a variety of industries. As customer acquisition costs continue to rise, managing customer churn has become critically important for the profitability of companies. This paper provides a novel method for determining which customers to target in order to maximize the profit of a retention campaign. The authors developed a binary classification method that uses a gain/loss matrix, which incorporates the gain of targeting and retaining the most valuable churners and the cost of incentives to the targeted customers. Results show that this approach leads to far more profitable retention campaigns than the traditional churn modeling approaches. In addition, the additional profits come at no cost for companies. The implementation of the retention campaign is unchanged, only the composition and size of the target group changes compared to traditional approaches. Read More

Solving the Search vs. Display Advertising Quandary

Internet advertising was supposed to make it easier for marketers to measure the impact of their ad buys. But a basic question remains: Do search ads or do display ads create more customers on the web? Research by Professor Sunil Gupta. Closed for comment; 8 Comments posted.

Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising

The introduction of online metrics such as click through rate (CTR) and cost per acquisition (CPA) by Google and other online advertisers has made it easy for marketing managers to justify their online ad spending in comparison to the budgets used for television and other media. However, these metrics suffer from two fundamental problems: (a) they do not account for attribution, since they give credit to the last click and ignore the impact of other ad formats that may have helped a consumer move down the conversion funnel, and (b) they ignore the dynamics, since they only account for the immediate impact of ads. As firms spend more of their ad dollars on online search and display, managers and researchers alike recognize a need for more careful attribution adjustment that takes into account the journey consumers follow before conversion as well as account for the impact of ads over time. In this paper, the authors use time series models to infer the interaction between search and display ads and also capture their impact over time. Examining data from a bank that used online advertising to acquire new customers for its checking account, the authors found that display ads have a significant impact on search applications, as well as clicks. The majority of this spillover was not instant, but took effect only after two weeks. On the other hand, search advertising did not lead to an increase in display applications. However, search ads showed significant dynamic effects on search applications that made them very cost effective in the long run. Read More

Social Network Marketing: What Works?

Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook. Read More

Do Friends Influence Purchases in a Social Network?

In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors. Using a unique data set from Cyworld, this study empirically assesses if friends indeed influence purchases. The answer: It depends. Findings are relevant for social networking sites and large advertisers. Read More

Solving the Marketing Resources Allocation Puzzle

Television spots, word-of-mouth, viral ads. Marketing managers have more options at their disposal than ever before. But how to decide? Harvard Business School professors Sunil Gupta and Thomas Steenburgh offer a way for managers to conceptualize the most effective approach. Read More

Allocating Marketing Resources

Deciding how to allocate marketing resources is particularly difficult because decisions need to be made at many different levels—across countries, products, marketing mix elements, and different vehicles within elements of the mix (e.g., television versus the Internet for advertising). With the increasing availability of data and sophistication in methods, it is now possible to more judiciously allocate marketing resources. In this paper, HBS professors Gupta and Steenburgh discuss a two-stage process where a model of demand is estimated in stage-one and its estimates are used as inputs in an optimization model in stage-two. The researchers propose a matrix with three approaches for each of these two stages, and discuss the pros and cons of these methods. They highlight each method with applications and case studies to present rigorous yet practical approaches to making marketing resource allocation decisions. Read More

How Do You Value a “Free” Customer?

Sometimes a valuable customer may be the person who never buys a thing. In a new research paper, Professor Sunil Gupta discusses how to assess the profitability of a customer in a networked setting—a "free" customer who nevertheless influences your bottom line. Read More