Journal of Business Research 67 (2014) 2836–2844

Contents lists available at ScienceDirect

Journal of Business Research

New product adoption in social networks: Why direction matters

Oliver Hinz a,⁎, Christian Schulze b, Carsten Takac c
a
Technische Universität Darmstadt, Hochschulstr 1, 64289 Darmstadt, Germany
b
Frankfurt School of Finance & Management, Sonnemannstr 9-11, 60314 Frankfurt am Main, Germany
c
Goethe-University of Frankfurt, Grueneburgplatz 1, 60323 Frankfurt am Main, Germany

a r t i c l e i n f o a b s t r a c t

Available online 17 August 2012 Marketing managers and researchers generally agree that analyzing data from social networks and using
them to influence consumers' purchase decisions are useful strategies. However, not all social network
Keywords: data may identify the most influential customers. This empirical study of more than 300 students reveals
Social network analysis the low explanatory power of friendship networks (e.g., Facebook) and undirected-advice networks (e.g.,
Social contagion LinkedIn). Only directed-advice networks (e.g., Google+) clearly identify influential consumers. In addition,
Diffusion
the results challenge conventional wisdom that firms should target advisers assuming that they have the
Directed networks
Undirected networks
strongest influence on new product adoption. This study contradicts this common assumption and reveals
that structural equivalence drives product adoption more than cohesion because advisees' adoption pressures
advisers to purchase the product as well. Finally, the study shows the value of social network data beyond the
traditional ego-centric psychographic metrics, such as innovativeness or opinion leadership.
© 2012 Elsevier Inc. All rights reserved.

1. Introduction
Understanding new product adoption behavior is critical for both
firms and researchers striving to explain and influence consumers'
decisions. Because influencing consumers through traditional adver-
tising seems to become less effective (Trusov, Bucklin, & Pauwels,
2009; Van den Bulte & Wuyts, 2007), firms continuously seek new
ways to promote products and influence consumers' adoption deci-
sions. According to sociological research, economic behavior embeds
into the social environment (Granovetter, 1985). Social contagion af-
fects prospective customers, and some persons wield more influence
over purchase decisions than others (Godes & Mayzlin, 2009;
Goldenberg, Han, Lehmann, & Hong, 2009; Iyengar, Van den Bulte, &
Valente, 2011). Thus, more firms attempt to address individual con-
sumers directly (Algesheimer, Borle, Dholakia, & Singh, 2010) and
base targeting strategies on consumers' social influence (Hinz,
Skiera, Barrot, & Becker, 2011). For example, one tactic triggers and
influences consumer-to-consumer (C2C) communication (Hinz &
Spann, 2008; Libai et al., 2010). This approach seems promising due
to social network platforms' increasing popularity (e.g., Facebook,
LinkedIn, or Google+). These platforms offer consumers ample oppor-
tunities for brand- and product-related discussions, increasing C2C
communication.
Recent research indicates that new customers influenced by C2C
communication are more valuable to firms than customers acquired
⁎ Corresponding author. Tel.: +49 6151 167 5220; fax: +49 6151 167 2220.
E-mail addresses: hinz@wi.tu-darmstadt.de (O. Hinz), email@christian-schulze.de
(C. Schulze), carsten@takac.de (C. Takac).
by other means (Schmitt, Skiera, & Van den Bulte, 2011; Trusov et
al., 2009; Villanueva, Yoo, & Hanssens, 2008). Furthermore, greater
consumer activity on social network sites enables companies to gather
detailed information about users' social interactions and social relation-
ships. Knowing who is connected to whom is instrumental to identify
and target influential consumers and to increase new product adoption
(Bampo, Ewing, Mather, Stewart, & Wallace, 2008; Hinz et al., 2011).
Marketing practitioners and researchers seem to agree that social
network data helps facilitate targeted marketing and influence con-
sumers' new product adoption behavior. The presumed marketing
potential of structural data from social network platforms such as
Facebook and LinkedIn is visible in these firms' high market valua-
tions. Does information about the structure of consumers' social
networks from these platforms provide sufficient information to identify
the customers who strongly influence other consumers' purchase deci-
sions? This study addresses the fundamental research question: What
types of social networks enable firms to identify and target influential
consumers?
To determine social network data's suitability to identify influen-
tial customers, the present research adopts two perspectives. First,
this study examines the explanatory power of undirected networks
for consumer product adoption and whether targeting individual
consumers using information from undirected networks offers a
promising strategy for firms. In undirected networks, relationships
are mutual (e.g., Facebook, LinkedIn), without any observable rela-
tionship hierarchy (Scott, 2000). Conversely, directed networks
allow consumers to name another contact without requiring recipro-
cation. Because directed networks (e.g., Google+) contain additional
information about who talks and who listens, they might permit

0148-2963/$ – see front matter © 2012 Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.jbusres.2012.07.005
 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
better identification of influential consumers and might help firms
target their marketing (Hinz et al., 2011).
Second, this study investigates social contagion's effect and direc-
tion. Social networks' information seeking and learning models sug-
gest that not all social contacts are equal; consumers decide whom
to consult in specific situations (Borgatti & Cross, 2003). Consumer re-
lationships that revolve around a specific topic of common interest
(e.g., cars, electronics, or fashion) may provide greater impact on pur-
chase decisions in that domain than friendships do. This study com-
pares the usefulness of friendship networks (Facebook) and advice
networks, which either focus on a specific topic (e.g., professional re-
lationships in LinkedIn) or permit various topical sub-networks (e.g.,
circles in Google +), to identify the most influential consumers.
In addition to this comparison, this study investigates which con-
sumers firms should target. Some research challenges long-accepted
truths about the importance of advisers or opinion leaders in product
adoption processes (Van den Bulte & Stremersch, 2004; Watts &
Dodds, 2007), suggesting that social contagion is better explained
by status considerations than by social learning under uncertainty.
Theory offers two competing explanations on how two consumers
(e.g., adviser vs. advisee) influence each other's product adoption de-
cisions. First, cohesion describes the popular view that an adviser
adopting a product likely exerts influence on an advisee who has
not yet adopted the product. Second, structural equivalence suggests
that an advisee adopting a product exerts social pressure on an ad-
viser based on competitive concerns who has not yet adopted the prod-
uct, because the adviser fears losing his or her social status as adviser
(Burt, 1987). Research remains uncertain about which contagion effect
dominates (see Bowler, Dahlstrom, Seevers, & Skinner, 2011). If cohe-
sion is dominant, firms should target well connected advisers and dis-
seminate information and influence many others to adopt as well. If
social pressure arising from structural equivalence is dominant, firms
should target advisees instead, because these consumers' early adop-
tion behavior exerts pressure on well-connected advisers to adopt to
preserve a certain social status (Bowler et al., 2011). This study investi-
gates whether the effect of cohesion is stronger than the effect of struc-
tural equivalence, or in other words, whether targeting advisers is
indeed more effective than targeting advisees.
Finally, this study analyzes the value of complete social network
information available from social network platforms compared to
the value of ego-centric psychographic concepts (e.g., opinion leader-
ship and innovativeness) (Katz & Lazarsfeld, 1955; Rogers, 1962,
2003). From a theoretical perspective, the comparison sheds light
on the question whether social network information is a substitute
for or a complement to traditional ego-centric concepts.
This article offers both theoretical and practical perspectives. From a
theoretical perspective, systematically analyzing the explanatory power
of two types of social networks (friendship vs. adviser–advisee) with
different degrees of information (undirected vs. directed) yields impor-
tant implications regarding the usefulness of different social networks
for social network analysis. As the empirical study shows, not all social
networks collect the same structural data and differ significantly in
their explanatory power for targeted marketing. From a theory perspec-
tive, the article investigates the strength of competing explanations for
social contagion: cohesion and structural equivalence. Again, the
empirical study's results run counter to widely held beliefs about the
processes underlying social influence among consumers. Managerially,
the article offers several important insights. Practitioners attempting to
influence consumers' new product adoption behavior based on social
network data must carefully choose their social network data—available
data might not be suitable for targeted marketing purposes. At the same
time, the findings highlight the potential benefit of social network anal-
ysis over the more traditional use of psychographic concepts. Finally, the
empirical results offer new and surprising recommendations to market-
ing managers wanting to target consumers with the greatest influence,
challenging the common belief that targeting advisers is most effective.
2837
2. Explaining new product adoption through social contagion and
individual psychographic concepts
2.1. Social contagion
New product adoption is an imitation process (Mahajan & Muller,
1979; Rogers & Shoemaker, 1971). This theory applies to human be-
havior in general, which depends strongly on the social environment.
For new product adoption, the social environment and social contacts
play important roles by providing and validating information about
the advantages and disadvantages of the product. Social contagion af-
fects prospective adopters, and some people wield more influence
over adoption decisions than others (Godes & Mayzlin, 2009;
Goldenberg et al., 2009; Iyengar et al., 2011). As Borgatti and Cross
(2003) suggest, the ability to access and value another person's
knowledge is a key factor in social information gathering and, ulti-
mately, social learning. Especially when mass media are omnipresent,
obtaining information is less problematic than finding trustworthy in-
formation, and the challenge is to filter overwhelming data (Coleman,
Katz, & Menzel, 1966).
For example, in a social network, friendship patterns, advice, com-
munication, and support exist among social system members (Scott,
2000). Consumers base decisions on social cues (e.g., behavior of
others) (Festinger, Schachter, & Back, 1950). Social networks gener-
ate trust, reduce uncertainty, and mitigate the information ambiguity
(Valente, 1996). Social contagion arises when proximate people use
one another to manage the uncertainty of prospective adoption
(Granovetter, 1985). What causes people to behave similarly? In ad-
dition to homophily, sociology and network theory offer two plausi-
ble explanations: cohesion and structural equivalence (Burt, 1987).
“Cohesion” refers to socialization between adopter A and potential
adopter P. As social interaction increases between A and P, A's influ-
ence more likely triggers P's adoption. When A and P discuss an
open question, such as an adoption decision, both parties align their
evaluations of the associated costs and benefits through strong com-
munication (Fischer, 1978). Structural equivalence reflects competi-
tion mechanisms instead, so A and P need not engage in direct
social interaction. Their competing social positions in overlapping so-
cial networks drive the adoption decision (Burt, 1987). For example,
competition for a certain social position increases the social pressure
on P to adopt and avoid losing social position to A. Thus, structural
equivalence and cohesion provide two (potentially overlapping) con-
cepts to explain social influence on new product adoption decisions
through the bandwagon pressure of social contagion (Abrahamson
& Rosenkopf, 1997; Sailer, 1978).
2.2. Psychographic concepts
Without information about a social networks' structure,
researchers commonly use psychographic concepts, such as opinion
leadership (e.g., Flynn, Goldsmith, & Eastman, 1994). Managers and
researchers consider opinion leadership important to new product
adoption decisions (Rogers, 1962, 2003). Opinion leadership plays a
central role in consumer behavior models and affects successful
new product strategies (Flynn et al., 1994). The expansive notion
describes the influence of some people on others' adoption decisions
(Katz & Lazarsfeld, 1955). Opinion leaders typically have greater
exposure to mass media, engage in more social experiences, and
enjoy higher socio-economic status. As a reference point for opinion
seekers, leaders spread positive or negative information about a
new product (Rogers, 1962, 2003). Recent studies show a low
correlation between the related but distinct concepts of opinion
leadership and social connectivity (Iyengar et al., 2011; Molitor,
Hinz, & Wegmann, 2011).
Psychographics also encapsulate consumers' independence with
respect to judgments and desire to seek new product information.
2838 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844

Two well-established constructs capture consumer innovativeness:
consumer independence of judgment making (CIJM) and consumer
novelty seeking (CNS) (Manning, Bearden, & Madden, 1995). People
differ in their level of reliance on others for information and assis-
tance in new product adoption decisions. Early adopters typically do
not rely on others' opinions. In theory, high CIJM people take product
adoption risks without confirmatory information seeking from social
systems and they adopt new products early (Midgley & Dowling,
1978). In contrast, CNS represents consumers' motivation for ob-
taining information about new products. Uncertainty surrounding a
new product adoption decision diminishes as new information be-
comes available. High CNS people tend to adopt new products sooner
than low CNS people (Hirschmann, 1980).
3. Method
To measure social contagion in new product adoption behavior, this
study draws on concepts from social network analysis and traditional
psychographic constructs. Interpersonal relationship data help explain
the information flow through social networks and the social influence
processes. Psychographic metrics capture consumers' attitudes toward
new product adoption and their self-assessment of their influence
over their peers. Previous research indicates that these two approaches
yield significantly correlated results. Opinion leaders typically are high-
ly connected people; however, they also reflect different perspectives,
as some studies show a rather low correlation (e.g. Iyengar et al., 2011).
This study also distinguishes between friendships and adviser–ad-
visee relationships. Friends tend to look out for each other in many
situations, whereas advisers support their advisees in specific areas
and with specific tasks. In the adviser–advisee relationship, A could
be an adviser for B for technology adoption, while B could be an ad-
viser for A for medicine.
3.1. Undirected and directed networks
The most common representation of social structures' formal
properties is the sociogram (Fig. 1), a graphical diagram in which in-
dividuals appear as nodes (see A–E) and social relationships appear as
lines or arrows. Networks in which the relationship's direction is im-
portant are directed networks (Scott, 2000). Direction results from
asymmetric relationships. For example, one person names the other
as a friend or adviser, but not vice versa. In an advice network, an
arrow indicates “follows the advice of” and thus moves from the ad-
visee (e.g., B) to the adviser (C). In contrast, in undirected networks
all relationships are symmetric: if A is C's friend then C is A's friend.
Some networks inherently are undirected (e.g., colleagues), and
others are directed (e.g., child–parent). For friendship and advice net-
works, the distinction is unclear. Friendships should be symmetric;
yet B might consider C a friend, even if C does not feel the same
way about B. Similar asymmetry holds true for advice networks. To
discover a social network's direction, the data must be available. For
example, measuring friendships only after both parties agree to
their recording cannot reveal asymmetric friendships. Subsequent anal-
yses need to rely on less informative undirected data, even though the
underlying social network structure actually might be directed.
3.2. Determining centrality
Social network centrality relies on a global or local perspective
(Bavelas, 1950). A globally central consumer maintains a position of
strategic significance in the network's overall structure; however, local
centrality applies to consumers with many social connections within
their immediate environment (Scott, 2000). This study applies mea-
sures of local centrality because the immediate environment of con-
sumers should be most influential for new product adoption decisions.
Depending on the network type (directed or undirected), calculating
network metrics relies on established methods from mathematical
graph theory (Barnes & Harary, 1983; Scott, 2000). To determine a
consumer's position in the local social network, this study applies the
metric of degree-based centrality. Specifically, in undirected networks,
the degree of consumer i indicates the consumer's number of social con-
nections (see Fig. 1). To calculate the degree, let cij equal 1 when a con-
nection exists between i and j. Then, the degree of i is as follows:
degreei ¼ ∑ cij :
i≠j
Directed networks indicate different numbers of incoming and
outgoing arrows. The number of incoming arrows to a point is the
indegree. In turn, aji takes a value of 1 if an arrow moves from point
j to point i. Then, the indegree of i is as follows:
indegreei ¼ ∑ aji :
j≠i
For social network analysis, indegree reveals the number of people
who considers a certain person their friend or adviser. In Fig. 1, B has
zero indegrees; A, D, and E each have one; and C has two. Incoming
arrows indicate appreciation, authority, or valuation as determined
by other network members. A person with a high indegree tends to
emerge as an expert, adviser, or socio-metric opinion leader (Van
den Bulte & Wuyts, 2007; Wassermann & Faust, 1994).
Analogously, the outdegree of point i is the total number of nodes
to which i points:
outdegreei ¼ ∑ aij :
j≠i
In Fig. 1, the outdegrees equal zero for nodes D and E, one for A
and B, and two for C.
This study extends the general definition of degree by introducing
adopter-filtered degree, or the number of arrows connecting consum-
er i with others who already adopted. Let cij equal 1 if a connection
exists between points i and j, and let θj equal 1 if person j already
adopted (0 if not). Then, the adopter-filtered degree of i is as follows:

B D
A C
Fig. 1. Sociogram.
af:degreei ¼ ∑ cij θj :
i≠j
Similarly, adopter-filtered indegree signifies the number of incom-
ing arrows from consumers who already adopted (i.e., the number of
advisees adopting a certain product). The adopter-filtered outdegree
measures the number of outgoing arrows. In an advice network, these
arrows signify the number of advisers who adopted the product. Let
aji take a value of 1 if a connection exists from point j to point i, and
let θj equal 1 if person j already adopted (and 0 if not). Then, the
adopter-filtered indegree and outdegree metrics are as follows:
E
af:indegreei ¼ ∑ aji θj and af:outdegreei ¼ ∑ aij θj :
j≠i j≠i
 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
3.3. Controlling for individual psychographics
The opinion leadership scale consists of six items related to opin-
ion leadership (OL) and six items related to opinion seeking (OS)
(Flynn, Goldsmith, & Eastman, 1996; King & Summers, 1970). This
study also operationalizes two aspects of innovativeness: CIJM and
CNS. These two reflexive constructs use scales that comprise six and
eight measurable items, respectively (Manning et al., 1995).
4. Empirical study
4.1. Setting
This study focuses on social networks in secondary schools, fol-
lowing Wassermann and Faust's (1994) assertion that the greatest
share of social interaction occurs among students from the same
grade in the same school, due to everyday personal contact. Focusing
on students, the present study can pinpoint social contagion effects
with particular clarity and avoids unsuitable boundary specifications
that can harm empirical studies. However, this approach bears the
risk of overestimating the absolute social network impact if students
are more susceptible to social influences than the general adult pop-
ulation. In contrast, relative impacts should not be adversely affected.
4.2. Questionnaire design
A questionnaire collected information about students' social net-
work, adoption behavior toward specific products, psychographic
metrics, and some demographics. The questionnaire includes four
sections. First, students responded to psychometric questions about
latent constructs, such as opinion leadership (OL) and opinion seek-
ing (OS), on seven-point Likert scales (1 = “strongly disagree,” 7 =
“strongly agree”; see Flynn et al., 1996). The first section also contains
the latent CIJM and CNS constructs (Manning et al., 1995). Second, the
questionnaire elicited sociometric data with a fixed-choice method
(Wassermann & Faust, 1994). To distinguish different types of rela-
tionships in secondary school social networks, this study focuses on
friendship and advisory relationship networks. Participants named
up to eight fellow students they considered friends and eight fellow
students they considered advisers with respect to consumer electron-
ics products. Third, items on adoption behavior toward Microsoft's
Xbox, Sony's PlayStation 3, Nintendo's Wii, and Apple's iPod followed
the interview guidelines of Coleman et al. (1966). One question elic-
ited whether the respondent already adopted the product; if so, the
respondent indicated the date of purchase. If not, the respondent
reported individual intention to buy that product in the next six
months (seven-point scale, 1 = “very unlikely,” 7 = “very likely”;
Davis, 1989). Such self-predictions (behavioral expectations) are
highly accurate predictors of future behavior (Sheppard, Hartwick,
& Warshaw, 1988; Warshaw & Davis, 1985). Fourth, participants pro-
vided demographic information.
A study design pretest included 15 respondents who participated
in personal, face-to-face interviews. These interviews aimed to reveal
any comprehension problems with the questionnaire (Presser & Blair,
1994) and helped identify and eliminate any ambiguities.
4.3. Construction of social networks
The calculation of the network metrics relied on sociometric
choice data (Section 3.2) and the friendships and advice relationships
that students reported (Section 4.2). Table 1 shows the resulting four
social networks.
The two undirected networks (one friendship, one advice; net-
works I and II in Table 1) resulted if student A named student B as
one of his or her top eight friends or advisers, in which case a bidirec-
tional arrow connects A and B by definition. Because relationships in
2839
Table 1
2 × 2 matrix of evaluated social networks.
Friendship network Advice network
Undirected network I II
Directed network III IV
undirected networks are reciprocal, the arrow is bidirectional regard-
less of whether B also named A. In the two directed networks (one
friendship, one advice; networks III and IV in Table 1), uni- and bidi-
rectional relationships differ. If A names B as friend or adviser, an
arrow from A to B enters the network. However, the arrow becomes
bidirectional only if B also names A. The directed‐networks' creation
also requires consideration of purchase timing. If one consumer adopts
before another, influence can only work in one direction. Applying this
constraint on the direction of social influence (see Section 3.2) in the
subsequent analyses should improve network data quality (Hinz &
Spann, 2008).
The students' social relationships, indicated by surveys, thus serve
as a basis for discerning undirected and directed networks of friend-
ship and advice (2 × 2 matrix, four networks total; see Table 1). The
study analyzes these networks with the social network modeling pro-
gram Pajek (Nooy, Mrvar, & Batagelj, 2005).
4.4. Data validity
Students in two secondary schools—one mixed gender and one all
girls—took the survey during regular class time and under their
teachers' supervision, which resulted in high response rates, partici-
pant attention, and accuracy. The schools' principals allowed distribu-
tion of the survey to all students in the two highest grades and
provided lists of names that helped ensure both the completeness of
the survey coverage and the proper coding of the network relation-
ships. The authors interviewed students who were not present for
the initial survey in the subsequent week and ultimately obtained re-
sponses from 342 of the 365 potential participants (94% response
rate). The participants were 281 female and 53 male students, aged
15–20 years, with more than 90% in the age range of 17–19 years.
The coding phase treated invalid responses (e.g., a claim of pur-
chasing a PlayStation 3 in 2005, though this device became available
for sale only in 2007) as missing data. Thus, 92% of all nominated
friends/advisers in the second survey section could be identified in
the sample. Only eight percent of reported social network relation-
ships were treated as missing.
An exploratory factor analysis assessed the psychometric proper-
ties of the measures for the latent psychographic constructs: OL, OS,
CIJM, and CNS. All scales are reliable. The mean scores for OL are sim-
ilar to those reported by the construct authors; mean scores for OS
range slightly above previously reported values. For both constructs,
the observed standard deviations are less than those that Flynn et
al. (1996) report, supporting the results. Mean scores for CIJM are
consistent with expected values (see Manning et al., 1995). Although
the mean CNS scores lie below the expected values, they remain
within the range of reasonable results.
The Cronbach's alpha values (standardized items) are .73 for OL, .87
for OS, .86 for CIJM, and .90 for CNS, all greater than the recommended
level of .7 to support scale reliability (Nunnally & Bernstein, 1994). As
Churchill (1979) and Bagozzi and Phillips (1982) propose, this present
study uses the sum of the indicator scores as aggregated scales for
each construct (see also Flynn et al., 1996; Manning et al., 1995).
A post-hoc partial correlation procedure with a marker variable test-
ed for common method bias. The smallest positive value in the matrix of
variable correlations functioned as a proxy for common method vari-
ance. The partial correlation adjustment reveals that zero-order correla-
tions that were statistically significant remain significant, so a common
2840 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
method bias is not a concern (Malhotra, Patil, & Kim, 2007; Podsakoff,
MacKenzie, Lee, & Podsakoff, 2003).
4.5. Characteristics of resulting social networks
The sociometric choice data enable social network construction
depicting students' relationships. For example, the directed-advice
network (network IV in Table 1) contains 334 nodes for the valid
data sets, with 873 directed-advice relationships depicted by arrows.
For readability, Fig. 2 only depicts a subnetwork with 190 nodes and
501 arrows, based on the two-dimensional Fruchtermann–Reingold
algorithm (Fruchterman & Reingold, 1991; Nooy et al., 2005), with
limited manual modifications. The colored nodes indicate students'
grade level: blue for 13th grade, red for 12th grade. Few adviser refer-
rals occur between grades, but many referrals exist within each grade.
Of the 334 students, the self-reported consumer electronics product
ownership measure indicates that nine own a Microsoft Xbox, nine own
Sony PlayStation 3 consoles, 25 own a Nintendo Wii, and 97 own Apple
iPods. In addition, 213 students own none of the products, 105 own one,
and 16 own two or more. For all four products, the study asked the
non-adopters for their purchase intentions. Fig. 3 illustrates the collect-
ed data for the iPod advice network: red nodes represent iPod owners,
yellow nodes refer to students with a high intention to adopt (score of 4
or higher on the seven-point Likert scale), and gray nodes refer to stu-
dents with a low intention to adopt (score of 3 or less).
Figs. 2 and 3 illustrate that adviser relationships are largely not re-
ciprocal—if student A names student B as his or her adviser, only 31%
of all cases does student B also name student A as an adviser. As a re-
sult, only 271 bidirectional relationships occur in the total advice net-
work. In contrast, the directed-friendship network (network III in
Fig. 2. Sociogram for social network of mutual advice.
Table 1) shows 63% reciprocal relationships, similar to the 70% order
of magnitude that Kratzer and Lettl (2009) report among younger
children.
4.6. Statistical analysis
A repeated measures analysis of variance (ANOVA) includes inten-
tion to adopt (ITA) as the dependent variable; network metrics as in-
dependent variables; and psychographic constructs, gender, and age
as control variables. The students' grade is not a control variable, be-
cause grade in school is strongly correlated with student age (Pearson
ρ = .621, p b .001), and age should be more useful for comparisons
with other studies. Adopters earned a maximum ITA score of seven;
otherwise, self-reported intention to adopt provided the ITA value.
Another repeated measures ANOVA, with both treatment-varying
(ITA) and treatment-invariant (mixed effects) covariates, accounts
for the within-subject correlation of the four dependent variable
scores for a student's intention to adopt the four products. A Wald
test analyzed the covariance distribution (assumed different for
each product) for all ANOVA models.
4.7. Results for undirected networks
The first analysis focuses on undirected networks (I and II, Table 1)
and thus deliberately disregards information on direction that is
available for this study but might not be available in many real-
world situations. The resulting friendship network is comparable to
Facebook, where directional information on the relationships is missing.
Similarly, the undirected-advice network is comparable to LinkedIn. Ex-
tant literature offers no predictions on whether undirected-friendship
 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
Fig. 3. Sociogram for mutual advice with intentions to adopt the iPod.
or undirected-advice networks are better suited to identify influential
consumers. The hype and hope around social network platforms
such as Facebook suggest, however, that practitioners widely believe
that friendship data help them target influential consumers. Study re-
sults show the number of adopters in a personal social network
measured by the adopter-filtered degree (af.degree, see Section 3.2)
significantly and positively impact the ITA. The estimated coefficient
for the undirected-advice network is .325, approximately five times
greater than the value in a corresponding model based on friendship net-
works. Furthermore, the af.degree's significance clearly increases in the
advice network model as well as the improved log-likelihoods of the
advice model. Table 2 summarizes the results. These findings suggest
undirected-advice networks (e.g., LinkedIn) outperform undirected-
friendship networks (e.g., Facebook) with respect to explanatory
power. These findings are somewhat surprising. The evidence suggests
that researchers, practitioners, and investors should use social network
data from undirected-friendship networks only with caution to identify
and target influential consumers. If possible, they should rely on advice
networks due to their greater explanatory power.
Adding psychographic constructs changes the estimates of the
remaining variables only slightly, and only OL and CNS are significant.
Thus, the explanatory power from structural data goes beyond the
traditional ego-centric psychographic constructs used in this study.
4.8. Results for directed networks
The second analysis includes directed social network information
(see Table 3). The results correspond to the analysis of social network
III and IV in Table 1. For the advice network, the significant coefficients
2841
for adopter-filtered outdegree and adopter-filtered indegree are .173
and .537, respectively. Results from the friendship network are not as
clear: af.outdegree is barely significant, and af.indegree shows no signif-
icance. For social network sites that capture friendships (e.g., Facebook),
these results indicate that adding directional information (e.g., rejected
or unanswered friendship requests) does not make the networks as
valuable as directed-advice networks for targeting consumers. In con-
trast, undirected-advice networks such as LinkedIn could benefit from
capturing directional information. Google+ captures directional infor-
mation and can model various topical subnetworks. This social net-
working platform should provide firms richer information to identify
and to target influential consumers.
Coefficient estimates and significance levels only marginally
change when controlling for psychographic constructs. These findings
confirm that ego-centric, psychographic indicators for social connect-
edness do not capture all information in a social network. Despite a
rather high correlation between OS and CIJM, removing one measure
from the model does not change the estimates substantially, so the
collinearity of these two variables is not an issue.
This analysis also shows that the number of adopters a person per-
ceives as advisers for new product‐related questions (adopter-filtered
outdegree) positively influences the intention to adopt the new product.
This finding confirms conventional wisdom: if an adviser has already
bought a specific product, he or she influences his or her advisees,
whose likelihood of buying that product increases. One additional adopt-
er among a person's advisers increases that person's intention to adopt by
approximately three percent (if the seven-point Likert scale represents
100% of a person's adoption probability), even after controlling for indi-
vidual psychographic data.
2842 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844

Table 2
Mixed-effects models for ITA based on undirected networks.

Variable Undirected-friendship network Undirected-advice network

Basic + Psychographics Basic + Psychographics

Coeff. (std. error) df Coeff. (std. error) df Coeff. (std. error) df Coeff. (std. error) df

Intercept 2.153 (1.34) 326 .846 (1.44) 309 1.674 (1.33) 323 .359 (1.43) 308
Product 1 (Xbox) −2.296 *** (.17) 1127 −2.301 *** (.18) 1,104 −2.058 *** (.15) 1057 −2.063 *** (.16) 1,033
Product 2 (PS3) −2.021 *** (.18) 1113 −2.022 *** (.18) 1,110 −1.770 *** (.15) 1063 −1.772 *** (.16) 1,039
Product 3 (Wii) −1.714 *** (.16) 1101 −1.735 *** (.17) 1,079 −1.512 *** (.15) 1036 −1.526 *** (.15) 1,014
Product 4 (iPod) 0 a 0 a 0 a 0 a
Age .088 (.07) 316 .072 (.07) 303 .100 (.07) 316 .084 (.07) 302
Gender −.163 (.16) 316 .089 (.16) 304 −.145 (.16) 315 .116 (.16) 303
af.degree .070 * (.03) 1269 .070 * (.03) 1,230 .325 *** (.05) 1266 .322 *** (.05) 1,230
OLc – .025 * (.01) 302 – .023 * (.01) 302
OS – .000 (.01) 304 – −.001 (.01) 302
CIJM – .012 (.01) 303 – .015 (.01) 304
CNS — .023 *** (.01) 303 — .023 *** (.01) 302
Log-likelihood −2570.443 −2503.232 −2553.064 −2487.073

a: Parameter set to zero because it is redundant. Significance levels: ***.001 **.01 *.05.

The results also highlight a less intuitive effect in the reverse di-
rection. Pressure arises from structural equivalence: The number of
advisees who adopt the new product influences the adviser's own in-
tention to adopt. If an advisee adopts, but the adviser has not, social
pressure increases the adviser's level of intention to adopt. This ob-
servation suggests advisers attempt to defend their social position
within the immediate social network (Burt, 1987). This effect's mag-
nitude is surprising: One more adopter among advisees increases the
adviser's intention to adopt by .52 on the seven-point Likert scale—
that is, social pressure increases adoption probability by 7%.
4.9. Influence of age, gender, and interactions
In all the models, neither age nor gender indicates statistical sig-
nificance (p > .1). This study therefore does not confirm the intuition
that age or gender differences alter adoption decisions (e.g., Gefen &
Straub, 1997). Interaction effects in the various models (e.g., between
OL and degree metrics) also are not statistically significant and they
reduce models' log-likelihood.
5. General discussion
5.1. Research contribution
This study confirms that social contagion significantly drives new
product adoption behavior (Coleman et al., 1966). This study's unique
data allow distinguishing between the effect of cohesion and status
considerations. Surprisingly, the results reveal that the mechanism
of structural equivalence in particular and also status considerations
can drive adoption. Cohesion also affects behavior, but at a much
smaller magnitude. Social cohesion's different aspects become visible
only with directed information in adviser–advisee networks. Mere
friendship information is insufficient for precise and effective
targeting. This finding parallels recent conjectures by Van den Bulte
(2009) and Hubermann, Romero, and Wu (2009): Evaluating inter-
personal relationships from the wrong perspective, or not filtering
out irrelevant links, produces dubious results.
Controlling for classical concepts of opinion leadership (Flynn et al.,
1994) and innovativeness (Manning et al., 1995) avoids confounding
the social networks' impact on adoption decisions with individual psy-
chographics. The study shows that ego-centric psychographic metrics
can enhance, but are by no means substitutes for, the results derived
from analyzing consumers' social network structures. The effect of so-
cial contagion through social networks goes beyond the person's psy-
chographic characteristics and further illustrates that economic
decision making is embedded in his or her environment (Granovetter,
1985).
5.2. Managerial implications
Social network platforms' success makes using data on friendships
to explain and ultimately influence economic behavior appealing to
firms and researchers. Firms hope that extensive social networks
prove capable of identifying consumers with the greatest influence

Table 3
Mixed effects models for ITA based on directed networks.

Variable Directed-friendship network Directed-advice network

Basic + Psychographics Basic + Psychographics

Coeff. (std. error) Df Coeff. (std. error) df Coeff. (std. error) df Coeff. (std. error) df

Intercept 2.160 (1.34) 330 .892 (1.44) 314 1.664 (1.32) 322 .384 (1.43) 308
Product 1 (Xbox) −2.286 *** (.17) 1141 −2.273 *** (.18) 1118 −2.050 *** (.15) 1,057 −2.053 *** (.16) 1033
Product 2 (PS3) −1.993 *** (.18) 1147 −1.972 *** (.18) 1124 −1.779 *** (.15) 1,064 −1.777 *** (.16) 1039
Product 3 (Wii) −1.727 *** (.16) 1115 −1.729 *** (.17) 1093 −1.539 *** (.15) 1037 −1.536 *** (.15) 1015
Product 4 (iPod) 0 a 0 a 0 a 0 a
Age .089 (.07) 321 .075 (.07) 308 .099 (.07) 315 .083 (.07) 302
Gender −.188 (.16) 321 .087 (.16) 309 −.128 (.16) 315 .121 (.16) 302
af.outdegree .102 (.08) 1284 .139 ° (.08) 1250 .173 * (.08) 1268 .187 * (.08) 1230
af.indegree .043 (.06) 1286 .015 (.07) 1,243 .537 *** (.10) 1263 .521 *** (.10) 1226
OL – .023 * (.01) 308 – .022 * (.01) 302
OS – −.004 (.01) 309 – .000 (.01) 302
CIJM – .012 (.01) 308 – .014 (.01) 305
CNS – .025 *** (.01) 309 – .022 *** (.01) 302
Log-likelihood −2612.822 −2544.278 −2550.611 −2485.272

a: Parameter set to zero because it is redundant. Significance levels: ***.001 **.01 *.05 °.1.
 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
on others' adoption behavior so that they can target them. Re-
searchers hope to find explanatory power in social network analysis,
beyond that of traditional models with ego-centric psychographic
metrics. This study offers new and somewhat surprising findings re-
garding the suitability of social networks for explaining and ultimate-
ly influencing consumers' new product adoption behavior.
First, this research compares the explanatory power of four types of
networks (Table 1), contrasting undirected networks, in which relation-
ships among consumers are reciprocal, with directed networks, in
which roles are clearly separate, and contrasting advice networks, in
which relationships revolve around a specific topic, with friendship net-
works, with a more general orientation. Advice networks' explanatory
power clearly exceeds pure friendship networks. This result issues a
warning to firms and researchers who analyze data currently available
in social network platforms primarily on the basis of relationships be-
tween friends. In addition, directed-friendship networks are not superi-
or to undirected-friendship networks in explanatory power. Even if a
network such as Facebook records direction information, the usefulness
for targeting purposes remains limited. In contrast, advice networks
could benefit substantially from directed information. Google + offers
an example of how to combine an advice network and directional infor-
mation within a social network platform.
Second, this study reveals that the influence of advisees who
adopt a new product on their advisers is more than three times great-
er than the influence of advisers who adopt on their advisees. These
results are robust to controlling for the individual psychographic con-
structs of opinion leadership and innovativeness. Advisees' early
adoption behavior pressures non-adopting advisers to adopt to pre-
serve their social status. Firms should consider more sophisticated
targeting strategies that incorporate targeting advisees, not just
advisers.
5.3. Limitations and directions for further research
Regarding the magnitude of the social network's impact on adoption
behavior, four limitations arise. First, conducting a survey with
near-adult secondary school students creates a risk of biased estimates
of the impact of the social network on adoption decisions. Social net-
work density and mutual influence presumably decrease after students
leave school. This approach might over-estimate the absolute effect
magnitude in the analyses, but the relative effects within (i.e., influence
of adopters on advisers compared with adopters on advisees) and
across (i.e., explanatory power of advice vs. friendship or directed vs.
undirected networks) the network types studied should hold. An up-
ward bias strengthens the findings because the explanatory power of
friendship networks for non-student populations should be even
lower than reported results.
Second, stated choices and preferences in a questionnaire feature
some well-known drawbacks compared with revealed behavior
(Swait & Andrews, 2003). For this study, the questionnaire also offers
important advantages. For example, the questionnaire extracts reliable
information on two types of directed networks (friendship and advice)
with well-defined boundaries, as well as indications of opinion leader-
ship, innovativeness, and key demographics. Other data usually do not
support easy comparisons of two types of networks for the same popu-
lation, especially if the study requires directed information on both
network types. In addition, evaluating the social network data's explan-
atory power using psychographic concepts requires additional informa-
tion on opinion leadership and innovativeness. Observed information
unlikely provides all the data required for this study.
Third, the sample is biased toward female respondents. Although
previous work indicates that women socially communicate and be-
have differently regarding new technology, study results suggest gen-
der does not influence product adoption intent. Recent studies show a
smaller gender divide with respect to the products studied (Lewis,
2007; Solutions Research Group Consultants, 2010).
2843
Fourth, the study does not control for mass media impacts on
purchase decisions and thus covers only the second aspect of the hypoth-
esized two-step flow process of new product adoption (Lazarsfeld,
Berelson, & Gaudet, 1944). Because the study includes an analysis of
adoption behavior data for four different consumer electronics products
and indicates significance in the models, the mass media impact on
adoption decisions likely is either irrelevant or equal for all products. Fur-
ther research should investigate this conclusion and test the robustness
of the findings while controlling for mass media's impact.
Acknowledgments
The authors acknowledge and are grateful for the support by
Ghenet Abraha and the financial support by the E‐Finance Lab,
Frankfurt. Comments by Ju‐Young Kim (Goethe‐University Frankfurt),
Gal Oestreicher‐Singer (Tel Aviv University), Christophe van den
Bulte (University of Pennsylvania), Bernd Skiera (Goethe‐University
of Frankfurt), and Martin Spann (Ludwig‐Maximilians‐University
Munich) to earlier drafts were helpful in revising this study. Two anon-
ymous referees and the associate editor Drew Martin also offered excel-
lent input. The authors alone are responsible for all limitations and
errors that may relate to the study and the paper.
References
Abrahamson, E., & Rosenkopf, L. (1997). Social network effects on the extent of innova-
tion diffusion: A computer simulation. Organization Science, 8(3), 289–309.
Algesheimer, R., Borle, S., Dholakia, U. M., & Singh, S. S. (2010). The impact of customer
community participation on customer behaviors: An empirical investigation. Mar-
keting Science, 29(4), 756–769.
Bagozzi, R. P., & Phillips, L. W. (1982). Representing and testing organizational theories:
A holistic construal. Administrative Science Quarterly, 27(3), 459–489.
Bampo, M., Ewing, M. T., Mather, D. R., Stewart, D., & Wallace, M. (September). The
effects of the social structure of digital networks on viral marketing performance.
Information Systems Research, 19, 273–290.
Barnes, J. A., & Harary, F. (1983). Graph theory in network analysis. Social Networks,
5(2), 235–244.
Bavelas, A. (1950). Communication patterns in task- oriented groups. The Journal of the
Acoustical Society of America, 22(6), 725–730.
Borgatti, S. P., & Cross, R. (2003). A relational view of information seeking and learning
in social networks. Management Science, 49(4), 432–445.
Bowler, W. M., Dahlstrom, R., Seevers, M. T., & Skinner, S. J. (2011). The ties that buy:
the role of interfirm social contagion across customer accounts. Journal of Personal
Selling & Sales Management, 31(1), 7–20.
Burt, R. S. (1987). Social contagion and innovation: Cohesion versus structural equivalence.
The American Journal of Sociology, 92(6), 1287–1335.
Churchill, G. A. (1979). A paradigm for developing better measures of marketing con-
structs. Journal of Marketing Research, 16(1), 64–73.
Coleman, J. S., Katz, E., & Menzel, H. (1966). Medical innovation: A diffusion study.
Indianapolis: Bobbs- Merrill Co.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS Quarterly, 13(3), 319–340.
Festinger, L., Schachter, S., & Back, K. W. (1950). Social pressures in informal groups: A
study of human factors in housing. Stanford California: Stanford University Press.
Fischer, C. (1978). Urban-to-rural diffusion of opinions in contemporary America. The
American Journal of Sociology, 84(1), 151–159.
Flynn, L. R., Goldsmith, R. E., & Eastman, J. K. (1994). The king and summers opinion
leadership scale: Revision and refinement. Journal of Business Research, 31(1),
55–64.
Flynn, L. R., Goldsmith, R. E., & Eastman, J. K. (1996). Opinion leaders and opinion
seekers: Two new measurement scales. Journal of the Academy of Marketing Research,
24(2), 137–147.
Fruchterman, T. M. J., & Reingold, E. M. (1991). Graph drawing by force-directed place-
ment. Software: Practice and Experience, 21(11), 1129–1164.
Gefen, D., & Straub, D. W. (1997). Gender differences in the perception and use of
e-mail: An extension to the technology acceptance model. MIS Quarterly, 21(4),
389–400.
Godes, D., & Mayzlin, D. (2009). Firm-created word-of-mouth communication: Evidence
from a field test. Marketing Science, 28(4), 721–739.
Goldenberg, J., Han, S., Lehmann, D. R., & Hong, J. W. (2009). The role of hubs in the
adoption process. Journal of Marketing, 73(2), 1–13.
Granovetter, M. (1985). Economic action and social structure: The problem of
embeddedness. The American Journal of Sociology, 91(3), 481–510.
Hinz, O., Skiera, B., Barrot, C., & Becker, J. U. (2011). Seeding strategies for viral marketing:
An empirical comparison. Journal of Marketing, 75(6), 55–71.
Hinz, O., & Spann, M. (2008). The impact of information diffusion on bidding behavior
in secret reserve price auctions. Information Systems Research, 19(3), 351–368.
Hirschmann, E. C. (1980). Innovativeness, novelty seeking, and consumer creativity.
Journal of Consumer Research, 7(3), 283–295.
2844 O. Hinz et al. / Journal of Business Research 67 (2014) 2836–2844
Hubermann, B. A., Romero, D. M., & Wu, F. (2009). Social networks that matter: Twitter
under the microscope. Social Computing Laboratory, HP Labs.
Iyengar, R., Van den Bulte, C., & Valente, T. W. (2011). Opinion leadership and social
contagion in new product diffusion. Marketing Science, 30(2), 195–212.
Katz, E., & Lazarsfeld, P. F. (1955). Personal influence: The part played by people in the
flow of mass communications. New York: Free Press.
King, C. W., & Summers, J. O. (1970). Overlap of opinion leadership across consumer
product categories. Journal of Marketing Research, 7(1), 43–50.
Kratzer, J., & Lettl, C. (2009). Distinctive roles of lead users and opinion leaders
in the social networks of schoolchildren. Journal of Consumer Research, 36(4),
646–659.
Lazarsfeld, P. F., Berelson, B., & Gaudet, H. (1944). The people's choice: How the voter
makes up his mind in a presidential campaign. New York: Duell Sloan and Pearce.
Lewis, L. (2007). Nintendo's women gamers could transform market. Times Online.
http://business.timesonline.co.uk/tol/business/markets/japan/article2629649.ece
Accessed August 2009.
Libai, B., Bolton, R., Bügel, M. S., de Ruyter, K., Götz, O., Risselada, H., et al. (2010).
Customer-to-customer interactions: Broadening the scope of word of mouth re-
search. Journal of Service Research, 13(3), 267–282.
Mahajan, V., & Muller, E. (1979). Innovation diffusion and new product growth models
in marketing. Journal of Marketing, 43(4), 55–68.
Malhotra, N. K., Patil, A., & Kim, S. S. (2007). BIAS breakdown. Marketing Research,
19(1), 24–29.
Manning, K. C., Bearden, W. O., & Madden, T. J. (1995). Consumer innovativeness and
the adoption process. Journal of Consulting Psychology, 4(4), 329–345.
Midgley, D. F., & Dowling, G. R. (1978). Innovativeness: The concept and its measure-
ment. Journal of Consumer Research, 4(4), 229–242.
Molitor, D., Hinz, O., & Wegmann, S. (2011). The interplay between psychometric and
sociometric data and the willingness to adopt new products. Zeitschrift für
Betriebswirtschaft (ZfB), 81(1), 29–59.
Nooy, Wd, Mrvar, A., & Batagelj, V. (2005). Exploratory social network analysis with
Pajek. New York: Cambridge University Press.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York:
McGraw-Hill.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. -Y., & Podsakoff, N. P. (2003). Common method
biases in behavioral research: A critical review of the literature and recommended
remedies. The Journal of Applied Psychology, 88(5), 879–903.
Presser, S., & Blair, J. (1994). Survey pretesting: Do different methods produce different
results? Sociological Methodology, 24, 73–104.
Rogers, E. M. (2003). Diffusion of innovations. New York: Free Press.
Rogers, E. M., & Shoemaker, F. F. (1971). Communication of innovations: A cross-cultural
approach (2nd ed.). New York: Free Press.
Sailer, L. D. (1978). Structural equivalence: Meaning and definition, computation and
application. Social Networks, 1(1), 73–90.
Schmitt, P., Skiera, B., & Van den Bulte, C. (2011). Referral programs and customer
value. Journal of Marketing, 75(1), 46–59.
Scott, J. (2000). Social network analysis: A handbook. London: Sage.
Sheppard, B. H., Hartwick, J., & Warshaw, P. R. (1988). The theory of reasoned action: A
meta-analysis of past research with recommendations for modifications and future
research. Journal of Consumer Research, 15(3), 325–343.
Solutions Research Group Consultants (2010). Who wants a tablet? Everybody.
Swait, J., & Andrews, R. L. (2003). Enriching scanner panel models with choice experiments.
Marketing Science, 22(4), 442–460.
Trusov, M., Bucklin, R. E., & Pauwels, K. (2009). Effects of word-of-mouth versus tradi-
tional marketing: Findings from an Internet social networking site. Journal of Mar-
keting, 73(5), 90–102.
Valente, T. W. (1996). Social network thresholds in the diffusion of innovations. Social
Networks, 18(1), 69–89.
Van den Bulte, C. (2009). Opportunities and challenges in studying consumer net-
works. In S. Wuyts, M. G. Dekimpe, E. Gijsbrechts, & R. Pieters (Eds.), The connected
customer. London: Routledge.
Van den Bulte, C., & Stremersch, S. (2004). Social contagion and income heterogeneity
in new product diffusion: A meta-analytic test. Marketing Science, 23(4), 530–544.
Van den Bulte, C., & Wuyts, S. (2007). Social networks and marketing. Cambridge, MA:
Marketing Science Institute.
Villanueva, J., Yoo, S., & Hanssens, D. M. (2008). The impact of marketing-induced
versus word-of-mouth customer acquisition on customer equity growth. Journal
of Marketing Research, 45(1), 48–59.
Warshaw, P. R., & Davis, F. D. (1985). Disentangling behavioral intention and behavioral
expectation. Journal of Experimental Social Psychology, 21(3), 213–228.
Wassermann, S., & Faust, K. (1994). Social network analysis: Methods and applications.
Cambridge, New York: Cambridge University Press.
Watts, D. J., & Dodds, P. S. (2007). Influentials, networks, and public opinion formation.
Journal of Consumer Research, 34(4), 441–458.