It’s no coincidence that you and your friends share some of the same things. Same favorite Mexican restaurant. Same favorite neighborhood park. Same favorite clothing brands, coffee shops, vacation spots, TV shows, etc. For years (yes, even before the internet), people have made big decisions and big purchases using the simple, yet resounding power of word-of-mouth marketing.

Word-Of-Mouth Marketing

The most credible form of marketing comes straight from the recommendations of people we know and trust. Both offline and online. Check out a few of these stats to prove it:

Recommendations Bar

If social media has the power to impact our buying decisions, the influence on what we’re reading sounds like a no-brainer, too. Recently, Facebook unveiled their new Recommendations Bar, so you now know which articles your friends are liking and sharing. A plug-in lives on a publisher’s website and recommends links based on other content that friends have recently liked or links they have shared. And guess what, sites that piloted the Recommendations Bar tripled the click-through rate for stories that appear in it. Talk about exposure!

Big-Ticket Items

Click-worthy content is key, but let’s get back to those big-ticket items. Why do people buy these things?

Maybe they’re celebrating a milestone such as graduating college, marriage or starting a family. Perhaps they’re moving to a new home or replacing something because it’s broken or outdated. Or possibly it’s the pure thrill of “just because.” Whatever the reason, consumers are increasingly curious and conscious of what their friends are doing, too. It’s tough not to be tempted to compare and “keep up with the Joneses.”

And as we can see from the staggering stats above, social media is no longer just a place to share pictures and articles. Businesses can now see just how much influence these social media sites, like Facebook, have on nearly every aspect of our life, including a person’s decision to buy a home.

The Facebook Influence and the Housing MarketThe Facebook Influence and Word-of-Mouth Marketing

A paper released by the National Bureau of Economic Research has found a person’s Facebook friend’s network is directly linked to the social media user’s housing investment choices. This study, which surveyed 1.4 million Facebook users in Los Angeles, found people whose social media friends had ‘positive experiences’ in the housing market were more likely to purchase a property for themselves – even if those experiences were in a completely different city. The Purchase price and type of house was also influenced.

The report found that if a person’s Facebook friend had experienced a jump in the value of their property, that individual was more likely to spend more on their own house.

If the person’s Facebook friend was negatively affected…the opposite was also found to be true. And that individual was more likely to avoid taking risks in the market, choosing to stay as a renter as opposed to a homeowner.

Findings from The Report ‘Social Networks and Housing Markets’

‘The Facebook survey on the attractiveness of Property investments; the study observed 1,242 survey responses. 55% male. The respondents’ age ranges between 19-75 years, average of 46 years.’

Questions presented to respondents:
1. How informed are you about house prices in your zip code?
2. How informed are you about house prices where your friends live?
3. How often do you talk to your friends about whether buying a house is a good investment?
4. If someone had a large sum of money that they wanted to invest, would you say that relative to other possible financial investments, buying property in your zip code today is:
[x] A very good investment [x] A somewhat good investment [x] Neither good nor bad as an investment [x] A somewhat bad investment [x] A very bad investment


‘For respondents who report that they regularly talk to their friends about whether property is a good investment, we find a strong relationship between their friends’ house price experiences and their own assessment whether property in their own zip code is a good investment: for respondents that often talk to their friends about property investments, the effect size is twice the effect size of the average individual.

For respondents that never talk to their friends about investing in the housing market, no statistically significant relationship is found. This finding suggests that the observed correlation is truly driven by social interactions, and not, for example, by people reading local newspapers from areas where they have friends.’

Leveraging Influences to Reach More Customers

Want to reach more customers? Identify things that influence buying decisions for just one of your customers and you have the potential to reach many, many more. And it starts by creating contagious content that is easily sharable and influences other.