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Social Media and the Sheth Rule of Three

July 19, 2012

 

http://www.statista.com/topics/751/facebook/chart/478/google-plus-gains-43-percent/

According the statistics in the chart above, google+ has seen an increase of 43.10% in unique visitors since May 2012. Now take a closer look at the graph above. You will see Dr. Sheth’s Model of the Rule of Three alive here. For more details read this co-authored by Dr. Sheth http://www.iveybusinessjournal.com/topics/strategy/competitive-markets-and-the-rule-of-three.

Yet in terms of market share there are some relevant insights to draw. let’s assume we are looking at these eight sites as the entire industry. Also assume, the visits will represent the “market share” (crude approach, I know). And the last assumption, each of these are individual enterprises (I realize they are not in reality).

The takeaways here are;

1. The Rule of Three seems to be alive here. There is a #1, a #2 and a behind the pack #3.

2. The #1 position has 33.4% of the market, #2 has 32.4% and #3 has 8.9%. These three combined have 74.7% of the “industry” market share. These Top 3 have a combined 74.7% of the total.

3. The expectation is #1 will be the least innovative. Recent headlines of FB’s attempts to expand into mobile marketing and other means to monetize their model could be arguments for this. And the #3 will be the most innovative, as can be argued but he continuous enhancements at google+.

4. The other five players have a combined 25.3% of the market and are expected to be niche players. Look at the brands above, you will see they are clearly niche players.

5. Those closest to the ditch are google+ and LinkedIn. They will be expected to be most aggressive to avoid being in the ditch as this industry evolves and matures.

This will be a most interesting industry to observe within this framework.

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