Content Popularity and Spence’s Theory of Costly Signaling

Eric Anderson ()

Chapter Chapter 7 in Social Media Marketing, 2010, pp 101-139 from Springer

Abstract: Abstract The economist Michael Spence’s groundbreaking work on costly signaling in the job market demonstrated how advanced degrees could serve as an accurate signal of candidate ability, because more qualified workers could acquire the costly signal at lower cost than unqualified ones. External forces, like the proliferation of MBA programs, can devalue a costly signal over time. Marketing is undergoing such a shift in its signaling system. In traditional advertising, the high cost of media exposure signals legitimacy, irrespective of content. But the Web itself has introduced disruptions into this traditional costly signal, as entities like Google have made the popularity of content a condition of exposure. Social media marketing extends popularity-based signaling into a systemic form, in which marketers must learn new rules for gaining exposure. This has provided new opportunities for upstart brands, as well as significant disruptions and adjustments for many traditional brands.

Keywords: Search Engine; Social Medium; Costly Signaling; Assisted Living Facility; Super Bowl (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-13299-5_7

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DOI: 10.1007/978-3-642-13299-5_7

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