Thursday, December 5, 2013

Structural holes and Twitter strategy

I'm reading David Knoke's Economic Networks (2012) for dissertation research. In it, he mentions Ronald Burk's take on social capital, which centers around the existence of structural holes.

A structural hole is a gap in communication between one party, who has information, and another who would like to receive it. This creates a power position for a broker who can create a link between those two. It's like being the middle-man in a market for information, who gains in status by exploiting the needs of the other two.

A company PR department issuing a press release, for example, has information which might be valuable to investors, customers, and competing companies. However, each of those groups would have to invest significant resources to read every PR release that might potentially interest them. This is where a (reputable) media source comes in, separating the wheat from the chaff and economizing the cost of providing information to interested parties. In return, that media agency gets to pay their staff's salary.

Social media changes the picture somewhat because there are millions of people out there all trying to be that media outlet, and they generate their own chaff in addition to helping separate out the wheat. Knoke observes "A large volume of information obtained from redundant sources is less valuable than high-quality new information acquired through connections to diverse sources." The perfect source is one which will do all the separating for you, leaving only the wheat. But, that source should be widely connected themselves so the quantity of information generated makes them worth listening to.

I'm starting to notice this at work on my Twitter feed, where I've been liberal in following pretty much any and everyone who might occasionally have something interesting to say. Unfortunately, the result has been a lot of noise to very little signal, and the news I care about is often reported redundantly or buried under items that are unimportant.

The optimal Twitter strategy for a news-consumer would be to pick out other people who follows lots of others and retweet often, but are extremely selective in who to retweet. The "retweeter" account can them take advantage of the structural hole between the flood of Twitter posts and the news consumer interested in a very few of them.

I'm sure there are some Twitter accounts out there which provide this retweet-screening service, but more commonly I see retweets being used as a sort of currency which is valuable to the person being retweeted but not necessarily to their followers. The use of retweets as a primary input for "influence" in applications like Klout makes this an attractive way to game the system. Also, retweets by mass-followed Twitter celebrities can be purchased as a way of building up a following, which is then later exploited for commercial purposes.

This has gone a bit longer than I'd intended, but I think the big takeaway is that there could be some unexploited opportunities for brokers to use the retweet system and serve as screening agents for their followers. Next stage: profit?


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