Definition
The phenomenon whereby a service becomes more valuable as more people use it, thereby encouraging ever-increasing numbers of adopters.
Information
The network effect is often the result of word-of-mouth testimonials. The network effect can be perpetuated indirectly, as well, through analysis of a network’s size and projected growth.
While the word-of-mouth method is often more influential in the beginning, analysis may play a significant role later in the cycle. In other words, you may adopt a service initially because someone you know uses it; later, you may adopt a service because “everyone” uses it.
see also: Digital Marketing Tools
Related Terms
view all terms in the Business and eBusiness glossary or all terms in the Digital Marketing glossary
Articles
Network Externalities (Effects)
University of Texas at Dallas (1998)
