Marketers have long used all sorts of demographic and geographic data to target potential customers - age, sex, education level, income, zip code. But there's another variable that companies may want to consider: Who is connected to whom?

A study, co-authored by Shawndra Hill, Wharton professor of operations and information management, found that consumers are far more apt to buy a company's product if they are "network neighbors" with existing customers. Mining data from "social networks" -- who talks to whom or who emails whom -- could allow companies to pinpoint likely customers who otherwise would be overlooked. Hill, Foster Provost of NYU's Stern School and Chris Volinsky of AT&T Labs Research detail their findings in a paper titled, "Network-Based Marketing: Identifying Likely Adopters via Consumer Networks," published in May 2006 in the Journal of Statistical Science.

"One of the main concerns for any firm is when, how and to whom they should market their products," the authors write. "We provide strong evidence that whether and how well a consumer is linked to existing customers is a powerful characteristic on which to base direct marketing decisions. Our results indicate that a firm can benefit from the use of social networks to predict the likelihood of purchasing."

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