This course examines how digital tools, such as the Internet, smartphones, and 3D printing, are revolutionizing the world of marketing by shifting the balance of power from firms to consumers. Marketing in a Digital World is one of the most popular courses on Coursera with over 150,000 Learners and is rated by Class Central as one of the Top 50 MOOCs of All Time (https://www.class-central.com/report/top-moocs/). This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.
Campus Spotlight: Hari Sundaram
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Marketing in a Digital World
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University of Illinois at Urbana-Champaign
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Course 1 of 7 in the Specialization Digital Marketing
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How are products priced in our digital world? In this module, you will learn how new digital tools are enabling customers to take a more active role in both evaluating and setting the prices they pay for the products they buy.
Meet the Instructors
Aric RindfleischJohn M. Jones Professor of Marketing
Department of Business Administration
[ Background Sounds ]
[ Music ]
>> Hi. Today we're here at the Siebel Center
for Computer Science here at the University of Illinois.
>> The Siebel Center was built in 2004.
Thomas Siebel donated $32 million to the University
of Illinois for this building.
Currently, the building houses the University
of Illinois computer science department which is one
of the top five computer science departments in the nation.
>> Great. Today we're here to speak
with Professor Hari Sundaram.
Hari's new to the University of Illinois.
He holds joint departments, both in the department
of computer science and also the department of advertising.
Hari does cutting edge research on how digital tools
such as smart phones can be used to change
and influence human behavior.
You ready Jolie?
>> Yeah, let's go.
>> Let's go.
[ Music ]
We're here with Hari Sundaram.
Hari, thank you for the opportunity
to visit with you today.
>> My pleasure.
>> Can you tell us a little bit about yourself
and the work that you do?
>> Sure. I'm an associate professor in computer science
and I have a joint appointment with computer science
and advertising and-- but my primary appointment is
in computer science, so much of my work deals
with analyzing collective behavior in online networks.
So, an example of this would be how do you discover
group formation.
What's technically in computer sciences we call
community discovery.
How do you discover groups that form online?
And some of the other problems that we have looked at is
that how do you discover the rise of coordinated behavior.
So, I don't know if you'd noticed that sometimes
when on Facebook if there's a like on a particular post,
the next time you log in there are literally hundreds of likes.
It's almost as though all
of this is happening simultaneously.
So, how do you discover the rise of coordinated behavior?
It'd be a building of mobile network laboratory.
That is, a laboratory that runs on people's smart phones.
So, the idea is that if you want
to understand how people make decisions in the presence
of social signals, that is,
knowing what your friends are doing at this particular time,
if you want to understand how people react to messaging
in situ, like if you go to Walmart
and you see a particular message,
how will people make a decision then.
You need to have infrastructure that allows you
to measure reactions
to different circumstances or contexts.
So, that's the kind-- so I'm interested in networks
in general, outside of Facebook and Twitter.
So, for example, there's a lot of research
in behavioral psychology that suggests
that when individuals make decisions we are influenced
by decisions of our friends as well as people
with whom we can relate to.
So, for example, as a trivial example, if I am walking
in downtown Chicago and I walk past an Indian restaurant
and I see the restaurant with a lot of other people
from India eating there, then it's a cue
that perhaps these people find value in this restaurant
and I should join them, even though I don't know them.
So, I'm trying to make use of this--
of these principles from behavioral psychology as part
of my research in how people take decisions
in social networks.
>> OK.
>> I was just going to ask if this primarily focuses
on social media then because you had mentioned Facebook
and Twitter and all these different--
>> Yeah, it does.
So, it began-- a lot of my work begin
with deep interest in social media.
I was interested
in understanding how people cooperate online.
How do-- you know, how does meaning form
through consensus online.
So, that's how it began, but then I began to realize
that networks play a much--
a really important part in our lives.
If you begin to think of networks,
not just Facebook or Twitter--
>> OK.
>> But in terms of friendships, right?
All of us have had friendships for millennia.
I mean, human beings have--
the bases of human society are these strong relationships
that exist between the individuals.
If you start thinking of networks as preexisting outside
of social media, then you begin to ask yourself how is it
that individual decision-making is affected
by these relationships.
>> And you mentioned that these relationships may be formed
around a common affinity,
so could that be a brand, a product?
>> Could be.
It could be, for example, all those people
who like the New York Times, for example.
So, it could be that many of the people
who read the New York Times have many other attributes,
perhaps all of them are liberal, for example,
or some of them have higher incomes that allow them
to have affinity with each other.
>> OK. How about things like automobiles,
so things like Jeep is known
for having a strong brand community, for example.
>> Sure. Absolutely.
So, yes. You can definitely form interest groups
where you can join groups whereby, you know,
you profess an interest for that brand
and all the different dimensions that the brand entails.
>> OK. So, I know you're doing this cutting edge research,
do we see any firms that are utilizing these techniques
to help market their products?
>> So, many of the-- so all this stuff that I'm doing is still
in its infancy, even outside.
So, people are very interested in using social media
for marketing purposes, for example.
It's been widely-- for example, it's been widely used in terms
of product placements on blogs, for example.
It's been used in wire marketing whereby, you know,
individuals go to bars or hotels or other places and they profess
to be using a particular product.
The big question that I'm trying to address is the question
of how do we persuade millions of individuals
to adopt behaviors that are beneficial to them, right?
An example would be can one reduce their energy consumption.
All of us are interested
in leading a more healthy lifestyle, right?
So, if we can persuade people to adopt more healthy behaviors,
it would have a huge impact on society, right?
Not only would people lead healthier lives,
they would lead more productive lives.
As a direct consequence,
insurance rates will fall, right?
If you start thinking about reducing our energy footprint,
you know, it will have a huge impact,
cascading impact on sustainability.
Right? So, that is the framing from which I come from.
So, when you think about authenticity in that context,
I'm interested in having people sign up for networks
for behaviors that they want to adopt,
but somehow can't seem to manage.
I want to eat healthy, but for whatever reason I happen
to be eating more steaks every week than I should, right?
How do I persuade myself to be more healthy?
So, what my goal is to embed you in a network of friends
and people that you can relate to and you will start now
in my network you'll start seeing messages.
Promotional messages perhaps from businesses,
but also messages from your friends saying that--
an example of this message would be
that Hari, it's 11 a.m. today.
I know you're about to go eat lunch, but 7 out of 10
of your friends have just gone to eat a salad.
>> So, you'd get this message on your phone--
>> On your phone, yes.
>> It would pop up on the screen.
>> It would pop up on the screen and so these are the kinds
of nudges that slowly help you attain the behaviors
that you want.
>> So, how does this work?
How does this message on my screen nudge my behavior
to eat healthy versus have--
>> So, the idea is that you're connected, so you're going
to be influenced by the people that you see.
So, if it is your friends who are adopting the behavior,
then it's more likely that you will adopt this behavior.
Or if it's people that you admire or have an affinity with,
you're much more likely to adopt the behavior.
So, there's a lot of research that talks about, you know,
if there-- based on the social norms,
knowing the social norms makes a big difference.
>> So, the social norms, perhaps peer pressure?
>> Peer pressure, but social norms make a big difference.
So, this familiar towel study--
I don't know if you're familiar with this.
In this towel study, what they did is
that they put these messages inside hotel rooms
that said that-- and these statistics were true,
they said 75% of the people who have stayed
in this room have reused the towel.
>> I've seen these signs.
>> That's right.
This is partly due to the work of Robert Cialdini,
who's worked extensively in persuasion.
This is-- the adoption statistics roles.
So, that's the idea.
So, if you begin to understand what the social norms are,
what is it that your friends are doing, what is it that people
like you are doing, might you be more inclined to adopt?
>> As you mentioned, this desire for collective action
and belonging is, you know, is a deep human trait
and that these behaviors and these social norms
and peer pressure also, you know, quite old.
So, what is new here in terms of the digital side?
So, how are these digital tools
like the smart phone changing these very traditional,
you know, human traits and motives?
>> I think the biggest difference is scale.
So, so far, if you think about the role of computing in many
of these complex human questions--
these are not computer science questions,
these are human questions that intersect, you know, psychology,
economics, and now technology.
So, what has particularly changed in the last 10
or 15 years-- 2 things have happened.
One is that the cost
of communication has dramatically reduced.
People have access to devices
that are essentially full-fledged computers,
a.k.a. smart phones, right?
And I think the other thing that has happened is
that technologies such as Flickr and Facebook,
Flickr and Twitter, what they've shown us is the extraordinary
desire for humans to be with each other, right?
Be online.
You know, this desire to connect with other people.
We've always known this, but Facebook has shown to the extent
at which we seek this.
Right? So, I think the key to technology is I think going
to play an increasing role as a glue in solving some
of these big complex questions
that humanity has found itself confronting.
>> So, as you know, this course is called marketing
in a digital world, we talked
about the digital aspect just now, how about a bit
about the marketing side?
So, [inaudible] this as a tool for social good,
like sustainability and healthy eating and energy usage.
How do you envision firms using this
or consumers using these tools to change marketplace behavior?
>> So, excellent question.
So, for example, consider this idea that, you know,
I've joined the social networking app to promote--
so that I become more healthy.
Right? So, I have a vested interest
in becoming more healthy, right?
And I'm-- now, let's say the marketplace knows this in terms
of businesses know that, you know what,
Hari has a tendency to eat healthy.
He walks at Siebel Center.
Can I incentivize him to come to my restaurants, make him aware
of the kind of products that are available, for example,
dishes that are available in my restaurant
that he can partake that is healthy?
So, first is promotional messages that can come
to me when I'm nearby.
Second thing is the cascading effect of being healthy, right?
So, let's say I adopt these healthy behaviors
and I've become more healthy.
I call my insurance company and say look,
I've really adopted a healthy behavior, healthy lifestyle.
Cut my insurance.
So, naturally the insurance company's going to come around
and say where's the proof?
It's like, I'm not going to believe you.
And a very important aspect
of my work is behavior verification.
So, I claim that I've done something and can I prove
to another person that what I claim is accurate.
Now, if the insurance companies know that Hari is very healthy,
leads a very healthy lifestyle, goes to bed early,
sleeps adequate number of hours and so on,
they might cut my insurance rate.
So, you-- I think you'll start to see--
provided individuals are willing
to expose their behavioral history in return for some sort
of a, you know, cut in prices,
you'll see a very interesting dynamic taking place
between businesses and individuals now.
>> So, going back to what you were saying before,
I think privacy might be one of the issues with social media
and digital marketing and all of that,
but you said people would be migrating more to perhaps show,
you know, companies their behavior.
Why do you think they're going to make that change?
>> Well, only in response for some sort
of an advantage, right?
So, this-- we're already seeing this.
For example with Progressive, an insurance company,
car insurance company, now puts in small monitors
in individuals' cars, right?
Now, in response for good driving behavior,
Progressive says that it'll give you a cut
in your insurance rate.
So, only if I believe that the company
that wants my behavioral profile will give me some sort
of a price cut, but I totally agree with you.
In return, it also has to say that it will honor my privacy.
It will not resell my data to somebody else
without my permission.
>> Can you give us a demonstration of how this works?
>> I'll be glad to.
So, what this dashboard allows us to do is that it allows us
to configure and generate apps that have a very specific focus.
So, this infrastructure allows us
to create social networking apps that are across platform,
across Android, iPhone, and Windows Mobile,
and what it allows--
this particular dashboard shows the experimental configuration.
So, you know, experimenter could create a database,
could select classes to be created, could select things
like what kind of network topology they want and,
you know, and add any special cases as they need.
For example, in this case a friend.
They could also configure things like what to show for any user.
So, you know, you could have thresholds.
What kind of thresholds do you want to use to trigger positive
or negative messages, number of messages per day,
any particular time messages ought to be displayed,
and things like if you're trying to understand the relationship
between messages and influence, so as I discussed earlier,
we need to start thinking in terms of positive
and negative framing of information.
So, begin figure out which users are part
of the experimental group who get positive messages,
who get negative messages, and the control group
that gets neutral messages.
And there are some other features here
that allow an experimenter to think
about message display based on granularity including, you know,
time, including space, as well as network.
So, the first app that we've created
with that infrastructure is an app
that focuses on healthy living.
So, the idea is that you want to persuade people
to have healthy eating and exercising behaviors and we want
to run a controlled experiment that begins
to understand the effects of different kinds
of information framing, the different kinds
of network structures that persuade people
to eat healthy and exercise, right?
So, we created this app.
So, what you do is that you login with Facebook
and it's a pretty standard procedure.
You'd find this on many different apps.
So, this is an example of Sanjana
who is enjoying a apple Danish.
So, if you go down, this is my breakfast for today.
I'm also eating the same apple Danish.
You can like if you want, you can enter a comment, and,
you know, and the friends
in my network have entered these comments.
So, if you go down, you'll find that you'll see activities
of people in your network who have posted things
about where they've gone and what they have--
photographs of what they've eaten
and so what we also have are these informational messages
that attempt to persuade you to subtly change your behavior.
So, for example, this one says
if you're a serious grad student, this would be
of most relevance to you.
It says four out of seven serious grad students have eaten
healthy over the past week.
You get some other statistics like 63 out of 100 of the people
in the network have eaten in North Urbana,
so this is an example of a special aggregate.
So, all these messages
that you're right now are positive healthy messages
and that's because I'm part of the control group
that gets these positive messages, right?
So, you can go down and you can see, you know, other messages.
For example, this particular message says
that if you have a very large network, if you and your network
on average walk 62,000 steps you'd have collectively walked a
full circle.
Of course, here my network is extraordinarily large,
so that is actually possible.
So, you go down and you know you get other kinds
of statistics as well.
You also, for example, you also get tabular information.
We selected tables in part because graphs are very hard
to read on a smart phone.
It's very easy to generate a graph, but it's very hard
to read the statistics and, you know, we allow you
to generate graphs here.
So, what else can you do?
You can obviously-- again, it's a social network,
you can take photographs of food that you've eaten.
So, in this particular application,
the idea is that you decide-- so you decide to--
what you do is that you several things.
In this particular application you do several things.
You figure out how much money you want to spend.
OK, so in this particular case, if I want to spend only $9,
I would have this setting.
And I have this setting that says vegetarian
and so the minute setting is very interesting.
For example, if I set it to 60 minutes,
it means that the application should give me restaurants
or suggest restaurants to me where I can find food for less
than $9 and I can be back in my office within 60 minutes.
Right? So, I save these preferences and then
when I do a search, I can--
immediately I have restaurant suggestions
that are based upon my preferences
and as you can see many of these restaurants are close by.
There, you know, for example, Don Juan Cocina is
within five minutes and the average cost of something
that I can eat there is around $6, right.
Now, for example, then if choose Don Juan's Cocina Mexicana
and Cantina, I get this nice map that I can just post
and say that I'm going.
OK? So, once I say I'm going, then my entire network gets
to see this information.
It says that Hari is going to Don Juan Cocina Mexicana
and Cantina and so my network is informed, right?
And then once I got to my network, I go there
and in this application you're supposed to take a photograph
of the food that you've eaten which you post, right?
So, in our network, you get points only
if you take photographs of what you've eaten.
Now, of course it's very hard to take--
to understand from a photo if the photo is healthy or not,
so at the back end we have another framework that farms
out these photographs to other members of the network
who don't really know that it is Hari who has posted,
so they will anonymously rate this food,
that actually gives me a healthy rating
of whether I've eaten healthy or not.
So, the key point about this infrastructure is
that it allows us to rapidly prototype a wide variety
of applications, not just for health,
but we are also developing an application for public safety.
You can also have an application for entertainment.
The key idea is making apps that have a specific purpose
that solves a problem that people actually have.
Once you create such apps that are engaging, at the back end,
the experimenter can run small experiments
to understand the effects of different kinds of messaging,
different kinds of topologies, different kinds of, you know,
of settings such as, for example, what happens
if at 11 a.m. you get a push notification on your smart phone
that says 7 out of 10 of your friends are eating a
salad today.
So, it's very hard to evaluate these questions
on existing social networks like Twitter or Facebook
because we don't really have full control of what members
of the network see and when they see it.
>> It's 2014; where are we in 10 years
down the road, [laughter] 2024, 25?
>> It's hard to predict the future, but I'm going
to use a quote from one of my favorite authors,
William Gibson, who said that the future has already happened.
It's just unevenly distributed, right?
So, I think the biggest thing that we will see is
that we will see technology transform mundane things.
We'll see transform things like adoption
of large-scale behaviors like becoming more healthy.
>> Looking at technology, here you have a demonstration of,
you know, the smart phone.
What other tools, digital tools, might play a role
in this future that you've laid out?
>> So, I think an important part of it is
that when I say technology is infused everywhere,
I mean that it could be in the very fabrics that we wear.
So, I think wearables will become much more important.
They may not become prominent necessarily as prominent as the,
you know, forthcoming Apple watch.
It could be, for example, some of the fibers woven
into your shirt and that could be tracking things
like heart rate, it could be tracking things like, you know,
whether you're breathing properly.
Right? Obviously, the World Wide Web will continue
to play a very important role in terms of connecting people.
>> Certainly.
>> Very fascinating stuff.
Where would someone go to find out more information
about the work that you're doing?
>> So, the best, best place would be my website.
Would be sundaram.cs.illinois.edu
or they should get in touch with me over email.
>> Great. Thank you so much!
We appreciate your time.
>> Thank you.
Thank you so much.
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