DATA4500 — MARKETING & SOCIAL MEDIA ANALYTICS

Influencer Marketing
and Network Analysis

Who really shapes the conversation, and how do we measure it?
LESSON 6 · WEEK 6
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Roadmap

Where We Are in the Course

This lesson sits at the analytical heart of the course. In the previous weeks we asked what is on social media and how people engage. This week we ask who influences whom, and how those relationships form measurable networks.

W1 Frameworks W2 Analytics W3 Social Methods W4 Engagement W5 Assessment W6 You are here Influencers & Networks W7 GenAI W8 Visualisation W9 Strategy W10 CLV/Churn W11 Prediction
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Learning Outcomes

What You Will Be Able to Do

By the end of this lesson, you should be able to answer four practical questions about any real-world influencer campaign.

OutcomeThe question it answers
LO1What is influencer marketing today, and which trends are shaping how brands work with creators?
LO2Why do network structures matter more than raw follower counts when a brand picks an influencer?
LO3Which Social Network Analysis (SNA) metrics tell us who is truly influential — and how do we compute them?
LO4How can cluster analysis segment audiences so that brands target the right people with the right creators?
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Running Case

Our Running Case: BrewLab Coffee

To make the concepts concrete, we will follow one fictional brand across the whole lecture.

The Brief

BrewLab is a Melbourne-based specialty coffee retailer with 12 cafés and a growing online subscription business. Their marketing director says:

"We've mastered organic social. Now we want to work with influencers — but we don't know who's worth paying, or how to prove it worked. Help."

Every concept today will loop back to this brief. By the end, you'll have a defensible answer.

BrewLab est. Melbourne 12 cafés · 18k Instagram followers Subscription box: $29/month Target: 25–40, sustainability-minded Budget for influencer trial: $40k
SECTION 1

What is Influencer Marketing?

Before we can measure influence, we need to agree on what an influencer is — and what has changed in the last five years.

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1.1

1.1 Defining Influencer Marketing

DEFINITION

Influencer marketing is a partnership in which a brand pays or exchanges value with a content creator so that the creator recommends, uses, or discusses the brand's product to their audience.

The word "friend" is doing a lot of work in the industry's favourite quote:

"Influencer marketing is like having a friend
who's really good at recommending things."

— Francois Marchand

WHY IT WORKS

Recommendations from a person you trust feel qualitatively different from an advertisement. Influencer marketing is engineered to trigger that trust response — at scale.

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1.2

1.2 The Influencer Spectrum

Influencers are usually classified by follower count. Bigger is not always better — the trade-off between reach and trust is the whole game.

More followers, more reach → Higher trust ↑ Nano 0–10K Hyper-niche 1:1 feel Micro 10K–100K Niche + scale Strong purchase impact Macro 100K–1M Broad, diverse Reach-focused Mega 1M+ Celebrity tier Highest fees Trade-off: as reach grows, engagement per follower and perceived authenticity drop
Figure 1.2 · Circle size reflects audience; vertical position reflects trust/authenticity per follower
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1.3

1.3 The Rise of Small: Why Nano and Micro Win

In 2025, 75.9% of Instagram brand partnerships involve nano-influencers with under 10K followers. Why would a global brand hand a campaign to someone with fewer followers than their local café?

The economics have flipped

  • Engagement rates are typically 3–5× higher for nano than mega influencers.
  • Nano audiences feel like a peer recommendation, not a paid ad.
  • Brands can partner with 50 nanos for the price of one mega, spreading risk and testing niches.
  • Algorithms now reward completion and comments, both of which nanos generate at higher rates.
BrewLab decision point

With a $40k trial budget, BrewLab could:

🅐 Pay one macro foodie (~$35k) for a single sponsored post reaching 400K followers.

🅑 Partner with 20 nano baristas and café bloggers ($2k each) reaching 200K followers combined, but with tighter local relevance.

Which would you recommend? Hold that thought — we'll return to it.

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1.4

1.4 The 2025 Landscape by the Numbers

Five statistics that describe the industry BrewLab is entering.

$32.5B
Global influencer marketing spend in 2025
75.9%
of Instagram partnerships now use nano-influencers
58%
of Gen Z have bought a product on influencer recommendation
86%
of marketers believe AI influencers may replace humans by year-end
53%
of consumers engage with influencers who align with their personal values
+41%
Growth in B2B influencer content on LinkedIn (YoY)

Sources: IMH, HubSpot, SproutSocial 2024 Report, SurveyMonkey, AdWeek

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1.Q

Knowledge Check — Section 1

Q1. A pet food brand is choosing between one mega-influencer (2M followers, 0.4% engagement) and thirty nano-influencers (avg 5K followers, 6% engagement). If the campaign goal is authentic community feel, which is the stronger fit?
Total combined reach for the nanos (~150K impressions at 6% engagement ≈ 9,000 meaningful interactions) actually beats the mega (~8,000 at 0.4%). Community feel is a function of engagement quality, not raw follower size.
Q2. Which statement about the influencer spectrum is most accurate?
Neither extreme dominates. A launch that needs mass awareness may favour macros; a niche product needing trust may favour nanos. The lecture's whole framing is about matching creator type to goal.
SECTION 2

Four Trends Reshaping the Playbook

The rules BrewLab would have followed in 2020 no longer apply. Here are the four shifts that dominate the 2025 conversation.

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2.0

2.0 The Four Trends at a Glance

We'll unpack each one, then use them to design BrewLab's first campaign in the workshop activity.

2.1 AI Influencers Virtual creators like Aitana Lopez blend brand control with creator-style content 2.2 Search-First TikTok & Instagram are Gen Z's new search engines — SEO now matters here 2.3 Authenticity Wins Real experience beats polished ads — via IGC, UGC and EGC content types 2.4 Multi-Platform Campaigns flow across TikTok → YouTube → Instagram → X, each with a distinct role

Each trend answers a different marketing question: Who makes the content? (2.1) How do people find it? (2.2) Why do they believe it? (2.3) Where does it live? (2.4)

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2.1

2.1 Trend One — The Surge in AI Influencers

Virtual influencers — entirely computer-generated personalities like Aitana Lopez (350K Instagram followers) — are increasingly used by real brands.

Why brands are adopting them

  • Total control over persona, appearance, and content — no missed shoots.
  • Zero reputational risk from personal behaviour scandals.
  • Always on-brand, translatable across markets, cost-efficient after set-up.
NUANCE

AI influencers complement rather than replace humans. They work for aesthetic and aspirational categories; they struggle where lived experience is the whole point (parenting, mental health, fitness journeys).

HUMAN Lived experience Emotional trust Reputational risk Scheduling limits Personal fees AI Full brand control Consistent output Zero scandal risk 24/7 availability One-time build
Human vs AI influencer: control vs credibility
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2.2

2.2 Trend Two — Social Platforms as Search Engines

Gen Z increasingly types product questions into TikTok, Instagram, and YouTube instead of Google. This changes what content earns discovery.

What people search for on social

  • Product reviews ("best latte in Melbourne")
  • How-to content ("how to brew pour-over at home")
  • Personal recommendations ("what coffee beans should I buy")

Strategic implication

Influencer content must now be searchable, not just scrollable. Agencies optimise:

  • SEO-friendly captions with actual keywords
  • Strategic hashtag stacks (broad + niche + branded)
  • Keyword-rich video descriptions and on-screen text
BrewLab implication

An unboxing video captioned "☕✨ love this!" is invisible. The same video captioned "BrewLab subscription review — best specialty coffee delivery in Melbourne" surfaces on TikTok search for months.

A creator who understands social SEO is now more valuable than one with 10× the followers who does not.

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2.3

2.3 Trend Three — Authenticity Wins

Modern campaigns thrive on relatability, not polish. Three content types dominate — each with a distinct source of credibility.

IGC — Influencer-Generated

Content created by paid creators integrating the product into their own life. Builds trust because the creator's audience already believes them.

Example: A barista influencer brewing BrewLab beans in her home kitchen.

UGC — User-Generated

Content from ordinary customers — reviews, unboxings, testimonials. Highest credibility because there's no financial incentive.

Example: A subscriber posting their unboxing to their 200 followers.

EGC — Employee-Generated

Content from the brand's own team — humanises the company by putting real people in front. Especially powerful for B2B.

Example: A BrewLab head roaster showing the roasting process on Reels.

THE PATTERN

All three are experience-led. Both social search algorithms and human viewers now discriminate against content that looks like a traditional ad. The visual language of the campaign has changed.

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2.4

2.4 Trend Four — Mastering Multi-Platform Campaigns

One creator, one platform, one post — that formula is dead. Modern campaigns flow across platforms, using each for what it does best.

TikTok Drives Discovery Short viral hooks YouTube Tells Deep Stories Long-form context Instagram Builds Community Ongoing engagement X (Twitter) Sparks Real-Time Talk Cultural moments Each platform plays a different role in one unified campaign
STRATEGIC IMPERATIVE

Design one campaign message that flexes to each platform's strengths. Consistency of story, adaptation of format.

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2.5

2.5 Choosing Your Platforms — At a Glance

Different platforms attract different audiences and serve different marketing purposes. Match the platform to the goal.

Platform Users Core age Purpose Best for Watch out for
Facebook 2.7B 25–54 Relationship building Brand loyalty, community Limited organic reach
LinkedIn 706M 30–49 Thought leadership B2B, professional networks Limited organic interactions
X (Twitter) 1.3B 18–29 News & conversation PR, news sharing Character limits, volatile tone
Instagram 2.0B 18–29 Brand engagement Retail, art, food, beauty Visual-only format
YouTube 2.0B All Interaction & storytelling Awareness, education Resource-intensive to produce

Source: prismglobalmarketing.com

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Activity 1

Workshop Activity 1 — Design a Campaign

The Brief

You are the strategy lead for a digital agency. A new eco-friendly fashion startup wants to launch a bold, data-driven brand campaign. Goal: authentic engagement across platforms with a limited budget but high creativity.

Step 1 — Pick two trends

  • AI-Generated Influencers
  • Search-First Social Media
  • Authenticity Wins (IGC / UGC / EGC)
  • Mastering Multi-Platform Campaigns

Step 2 — Pick two platforms

Justify your choice using the demographics, purpose, and pros/cons from slide 2.5.

Step 3 — Design the campaign hook

  • What is your main message?
  • How will it feel authentic?
  • Will it be AI-enhanced, creator-led, search-optimised, or cross-platform?

Step 4 — Justify critically

  • Why these trends?
  • Why these platforms?
  • What are the risks and trade-offs?
SECTION 3

Measuring Influencer Impact

A trend-informed campaign is only half the job. The other half is proving — with numbers — that it worked. Which metrics matter, and which mislead?

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3.1

3.1 What is Influencer Marketing Analytics?

DEFINITION

Influencer marketing analytics is the practice of collecting, analysing, and interpreting data from influencer campaigns to produce actionable insights — decisions about who to work with, what content to produce, and where to invest next.

Four KPIs you already know (from Week 4)

KPIWhat it measuresWhat it tells BrewLab
Engagement RateInteractions ÷ reachAre people actually responding, or just scrolling past?
ReachUnique viewersHow many different people saw the campaign?
ImpressionsTotal content viewsHow much total exposure did the content receive?
Conversion RateDesired actions ÷ visitorsDid the campaign actually sell subscriptions?
A COMMON TRAP

Impressions grow with follower count. Engagement rate does not. A campaign that boasts 2 million impressions but a 0.1% engagement rate may have reached fewer meaningful people than a smaller one with 200K impressions and 8% engagement.

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3.2

3.2 Knowing the Audience Behind the Numbers

Reach and engagement tell you whether people responded. Audience insights tell you who they were — critical for deciding whether the right people saw the campaign.

Four dimensions to track

  • Age & Gender — tailor tone, visual style, and platform choice for relevance
  • Location — time posts strategically; localise content for regional impact
  • Interests & Behaviours — identify preferred content types and engagement triggers
  • Engagement Trends — reveal top-performing formats and topics to guide future content
BrewLab example

Two BrewLab campaigns each reached 100K people:

Campaign A: 60% female, 25–34, Melbourne/Sydney urban, interests: sustainability, wellness.

Campaign B: 70% male, 45–60, regional, interests: sports, business news.

Same reach, wildly different value. Campaign A is BrewLab's actual customer.

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3.3

3.3 Direct and Indirect Returns

To gauge true campaign impact, measure both what you can immediately count and what shows up later.

Direct Returns

Measurable, short-term outcomes attributable to the campaign.

  • Sales revenue from tracked links
  • Subscription sign-ups
  • Redeemed discount codes
  • Website traffic during the campaign window

Return on Investment (ROI) is calculated primarily from these.

Indirect Returns

Longer-term, harder-to-quantify benefits.

  • Increased brand awareness
  • Improved customer perception
  • Loyalty and repeat-purchase behaviour
  • Content library the brand can re-use
  • Search visibility (from optimised captions)

Often called "brand equity" — small per campaign, huge over time.

FINANCE-TEAM WARNING

Judging influencer campaigns on direct sales alone systematically undervalues them. Brands that only measure this way tend to stop investing right before the compounding brand effects kick in.

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3.4

3.4 Three Tools for Accurate ROI Tracking

Even the best strategy fails if you cannot trace results back to the right influencer. These three tools do exactly that.

Tracking Links

Unique URLs (via UTM parameters or short-link services) traced through the user journey from influencer content → website visit → purchase.

brewlab.com/?utm_source=nina&utm_campaign=spring

Unique Discount Codes

Each influencer gets a personal code (e.g. NINA20) that attributes every sale using it to that partnership.

Bonus: the discount incentivises the audience to use the code, giving you cleaner data than links alone.

Analytics Dashboards

Tools like Google Analytics, Meta Business Suite, or purpose-built platforms (GRIN, Aspire) aggregate conversions, traffic sources, and user behaviour in one view.

Enables real-time optimisation mid-campaign.

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3.5

3.5 Attribution Models — Who Deserves the Credit?

DEFINITION

Attribution models are analytical frameworks that decide which marketing touchpoints get credit for a conversion. They answer: "Which part of the campaign had the most impact on the customer's decision?"

The BrewLab conversion story

A customer named Alex buys a BrewLab subscription. Their path:

  1. Sees Nano influencer's TikTok about local roasters (Monday)
  2. Watches Macro's YouTube "best of Melbourne coffee" video (Wednesday)
  3. Sees BrewLab's Instagram ad (Friday)
  4. Buys via unique discount code from the Nano's bio (Sunday)

Question: which of those four touchpoints "made the sale"? The answer depends on your attribution model.

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3.6

3.6 Three Attribution Models Compared

First-Touch 100% 0% 0% 0% TikTok YouTube IG ad Purchase Credits the spark of interest Last-Touch 0% 0% 0% 100% TikTok YouTube IG ad Purchase Credits what closed the sale Multi-Touch 25% 25% 25% 25% TikTok YouTube IG ad Purchase Credits every contributor First-Touch Best for identifying what sparks new interest. Ignores the closing effort. Last-Touch Easy to track; the industry default for many years. Undervalues earlier influences. Multi-Touch Holistic view of the journey. Ideal for cross-platform influencer campaigns.

For BrewLab's four-touchpoint journey, multi-touch is the honest choice.

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Activity 2 · Part A

Workshop Activity 2 — Meet the Influencers

Work in groups of 3–4. Study these four influencer profiles. You'll match them to campaign scenarios in Part B.

NameTypePlatformFollowersAudienceContent Focus
Sasha Luxe Mega Instagram, YouTube 2.1M Global, women 18–30 High-end fashion, luxury travel, lifestyle
JayFit Macro TikTok, Instagram 400K Urban millennials, fitness enthusiasts Fitness routines, healthy living, motivation
Nina's Nibbles Micro YouTube, Instagram 35K UK food lovers, 25–45 Local food reviews, cooking tutorials, sustainable eating
TariqTech Nano Twitter, LinkedIn 3.2K Early-career tech professionals & students Tech trends, coding tips, career advice
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Activity 2 · Part B

Activity 2 — Two Campaign Briefs to Solve

Match the most suitable influencer(s) to each scenario. Justify your choice using type, platform, audience, and content fit.

Scenario Brand Product / Campaign Target Audience Marketing Objective
1 Élan Couture Luxury handbag line Women 20–35, high disposable income Increase visibility and desirability in fashion circles
2 Green Bean Café Plant-based meals with local ingredients Urban dwellers 25–45, eco-conscious Drive local awareness and in-store visits
Deliverables

For each scenario, pick one primary influencer (and optionally a secondary support influencer). Write a 3–4 sentence justification citing the concepts from Sections 1 and 2.

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3.Q

Knowledge Check — Section 3

Q1. BrewLab runs a campaign with three influencers. Sales during the campaign grew by $80K, but they only spent $20K. However, using last-touch attribution, only one influencer appears to have driven any sales. What is the most likely explanation?
Last-touch systematically ignores earlier touchpoints. A customer who first heard about BrewLab from influencer A weeks ago, then bought via influencer C's link, credits 100% to C. Multi-touch attribution avoids this bias.
Q2. Which measurement approach best captures the full value of an influencer campaign?
Direct metrics are visible immediately but incomplete. Indirect returns — awareness, perception shifts, reusable content, search visibility — often eclipse direct returns over 6–12 months. A defensible measurement plan tracks both.
SECTION 4

Networks and Social Network Analysis

So far we've counted followers, engagements, and conversions. Now we ask a deeper question: what does the shape of the network tell us about who really has influence?

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4.1

4.1 Why Network Structure Matters More Than Follower Count

Two influencers can have identical follower counts and produce dramatically different results. The difference is where they sit in the network — who they connect to, and who those people connect to.

Influencer A: isolated hub (10K followers) Message dies at the followers Influencer B: bridge (10K followers) Followers reshare — message cascades

Same follower count. Radically different real influence.

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4.2

4.2 The Language of Networks: Nodes and Edges

TWO CORE CONCEPTS

Nodes (or vertices) are the actors — people, accounts, brands.

Edges (or ties) are the relationships — follows, mentions, replies, collaborations, tags.

Every social network is just a set of nodes with a set of edges between them. Once we can describe a network this way, we can measure its structure.

Edges can carry different meanings

  • Directed vs undirected — following is directed (A follows B), a mutual friendship is undirected.
  • Weighted — some relationships are stronger than others (comment counts, DM frequency).
  • Signed — positive or negative sentiment.
A B C D E Nodes = people Edges = relationships
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4.3

4.3 What is Social Network Analysis?

DEFINITION

Social Network Analysis (SNA) is a methodological approach that maps and measures the relationships between people, groups, or organisations. It treats interactions on social media as a mathematical graph: a set of nodes (people) connected by edges (interactions).

What SNA lets us do for influencer marketing

BrewLab application

Instead of just picking creators with the most followers in "food and coffee", BrewLab can use SNA to find creators whose audiences overlap with sustainability, wellness, and local Melbourne communities — the exact intersection their subscription box targets.

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4.4

4.4 Key SNA Metrics — (1) Degree Centrality

DEFINITION

Degree centrality counts the number of direct connections a node has. In social media terms, it is essentially how many people directly follow, mention, or interact with this account.

The most intuitive measure — high degree = high potential immediate reach.

Strength

Fast to compute, easy to explain, good first filter.

Limitation

Doesn't tell you whether those connections lead anywhere. An account followed by 10K bots has the same degree as one followed by 10K engaged fans.

6 Degree = 6 direct connections
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4.4

4.4 Key SNA Metrics — (2) Betweenness Centrality

DEFINITION

Betweenness centrality measures how often a node lies on the shortest path between two other nodes. High-betweenness accounts are bridges that connect otherwise separate communities.

These are the gatekeepers of information flow between distinct groups.

Why marketers love bridges

A bridge influencer with 20K followers can spread a message across three communities. A mega-influencer with 2M followers who sits entirely inside one community may reach fewer distinct sub-audiences.

BrewLab example

A creator active in both Melbourne food scene AND sustainability activism would be a bridge — the ideal single point of contact for BrewLab's positioning.

B The bridge (B) has the highest betweenness Community 1 Community 2
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4.4

4.4 Key SNA Metrics — (3) Eigenvector Centrality

DEFINITION

Eigenvector centrality weighs a node's importance by the importance of its neighbours. You are influential if you are connected to influential people — not just to many people.

Think of it as a quality score for your connections, rather than a quantity score.

THE INTUITION

A journalist followed by three Nobel laureates has more eigenvector centrality than one followed by 3,000 random accounts.

For BrewLab, this metric surfaces creators who are quietly respected within the coffee industry itself — the influencers other influencers follow.

You ★ ★ ★ ★ Only 4 connections — but each is powerful
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4.4

4.4 Key SNA Metrics — (4) PageRank

DEFINITION

PageRank is a refinement of eigenvector centrality that evaluates influence based on both the quantity and quality of incoming links. Originally invented by Google to rank web pages, it works the same way on social networks.

A node's PageRank score reflects the probability that a random walker jumping through the network would land on it. High PageRank = trusted authority.

Why it matters here

PageRank penalises spam and pure follower-count games. It rewards accounts other credible accounts choose to engage with.

Metric Answers the question
Degree How many direct connections?
Betweenness Do I bridge separate groups?
Eigenvector Are my connections influential?
PageRank Do trusted accounts trust me?
IN PRACTICE

Professional SNA reports show all four. Different metrics highlight different candidates — the story emerges from the pattern.

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4.5

4.5 Where Does the Network Data Come From?

Before SNA can happen, someone has to collect the raw graph. Three main routes, each with trade-offs.

APIs

Official platform interfaces (Meta Graph API, X API, LinkedIn API) provide structured data on posts, likes, follows, and shares.

✓ Legal, high-quality, structured

✗ Rate limits, approval required, often paid

Web Scraping

Programmatically extracting data directly from public webpages, without going through an API.

✓ Access to data APIs don't expose

✗ Often against terms of service; ethically fraught

Third-Party Tools

Commercial services (Brandwatch, Meltwater, GRIN) aggregate and license network data from multiple platforms.

✓ Ready-to-use, compliant, cross-platform

✗ Expensive, opaque methodology

CHOICE DEPENDS ON

Platform capabilities, budget, ethics review requirements, and how fresh the data needs to be. For coursework, we typically use pre-collected datasets or public API sandboxes.

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Activity 3

Workshop Activity 3 — Map Your Own Network

The Task

Think about one social media platform you've used recently (Instagram, LinkedIn, X, TikTok). Write down 5–8 people you interacted with most in the past week — likes, comments, shares, or DMs.

Draw a simple network diagram

  1. Draw a circle for yourself in the middle. Label it "You".
  2. Add a circle for each of the 5–8 people you listed — these are your nodes.
  3. Draw lines (edges) from you to each person you interacted with.
  4. If any of those people also interact with each other, draw edges between them too.

Reflect and discuss

  1. Who is the most central person (apart from you)? Why?
  2. Can you spot any clusters or groups?
  3. What does this reveal about how information or influence flows through your social circle?
You Alice Emma John Mary Bob Sarah
Example: 6 friends, you at the centre, with some cross-links
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4.Q

Knowledge Check — Section 4

Q1. BrewLab is choosing between two coffee creators, both with 25K followers. Creator X has high degree centrality; Creator Y has high betweenness centrality. Which is more likely to help BrewLab reach both the sustainability community and the specialty coffee community?
Betweenness centrality specifically measures a node's role as a bridge between otherwise-disconnected groups. This is exactly what BrewLab needs when their target sits at the intersection of two communities.
Q2. Which SNA metric asks "are my connections themselves influential?"
Eigenvector centrality (and PageRank, which extends it) weight the importance of a node's neighbours. Being connected to a small number of influential accounts scores higher than being connected to a large number of unimportant ones.
SECTION 5

Cluster Analysis for Targeting

Now we shift from analysing the network to segmenting the audience. Cluster analysis groups similar customers so brands can match the right creator to the right person.

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5.1

5.1 What is Cluster Analysis?

DEFINITION

Cluster analysis is a technique that groups entities — customers, influencers, or posts — based on similarity across measurable characteristics like demographics, behaviour, or content themes.

Within Social Network Analysis, cluster analysis groups nodes into communities. In marketing analytics more broadly, it groups customers into segments. Both use the same core idea: things that are alike belong together.

Before clustering algorithm After clustering ■ Segment 1 ■ Segment 2 ■ Segment 3
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5.2

5.2 Why It Matters for Influencer Targeting

Cluster analysis unlocks four decisions marketing teams have to make.

What clustering identifies Decision it enables
Influencer communities — groups of creators with similar audiences or content themes Which sub-scene should we partner with?
Niche vs central clusters — some clusters are small and specialised, others are broad Are we going after depth or breadth?
Audience segments — customers grouped by behaviour and values Which creator matches which segment?
Smart creator matching — AI-ranked lists of creators aligned to brand values Which specific influencers should we shortlist?
CORE IDEA

Without segmentation, all marketing is one-size-fits-all. With good segmentation, the same budget can be split across the right creators for each distinct customer group — dramatically improving relevance.

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5.3

5.3 Worked Example — NaturaLife Australia

For our worked activity, we'll segment a real dataset for a fictional Australian retailer using K-means clustering in Python.

Company Overview

NaturaLife Australia is a mid-sized retailer of eco-friendly lifestyle products — organic skincare, reusable home goods, sustainable fashion, and ethically sourced wellness supplements. Flagship stores in Sydney, Melbourne, and Brisbane. Rapid growth since launching e-commerce and a mobile app in 2021.

NaturaLife's leadership wants to shift from one-size-fits-all marketing to hyper-targeted, data-driven campaigns. Better understanding of customers will improve:

Product
recommendations
Promotional
timing
Channel
engagement
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5.4

5.4 The Business Challenge

NaturaLife collects data across store sales, app usage, surveys, and email — but the marketing team has no clear picture of who their key customer groups are.

The Question They've Asked You

"Can we segment our customers into meaningful groups based on their demographics, shopping behaviour, lifestyle preferences, and values like environmental concern?"

Your Task Brief

  1. Segment the customers using clustering techniques such as K-means.
  2. Interpret the characteristics of each segment in business terms — not just numbers.
  3. Recommend practical marketing and customer strategies based on your findings.
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5.5

5.5 The Dataset

A clean dataset of 300 anonymised customers has been extracted for you, with the following variables:

Demographic variables

  • Age — customer's age in years
  • Gender — self-reported
  • Income — annual, in AUD
  • City — Sydney, Melbourne, or Brisbane

Behavioural variables

  • Online Shopping Frequency (1–10)
  • Brand Loyalty Score (from repeat purchases)
  • Preferred Communication / Shopping Channel

Values & lifestyle variables

  • Lifestyle Score (engagement & activity surveys)
  • Environmental Concern Level (self-reported values)
RECALL FROM DATA4000

What is a data dictionary? A reference document that describes each variable — its name, type, units, valid range, and meaning. Check Additional Resources for the NaturaLife data dictionary.

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5.6

5.6 Running the Analysis in Google Colab

The Python notebook has been prepared for you. All you need is a Google account.

Setup steps

  1. Open the file DATA4500_Cluster_Analysis_W6 from the Additional Resources section on MyKBS.
  2. Also download the dataset and the data dictionary.
  3. Sign in to Google Drive at drive.google.com.
  4. Click New → File upload and select the notebook.
  5. Right-click the notebook → Open with → Google Colaboratory.
  6. Save any changes back to your Drive.

What to do inside the notebook

  1. Read the K-means introduction at the top.
  2. Run each cell in order using the ▶ play button.
  3. Study the segment output and the PCA visualisation.
  4. Discuss with your group: which segments are most attractive to NaturaLife, and why?
  5. Which segments would benefit most from influencer marketing?
  6. What type of influencer suits each segment?
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5.7

5.7 The Three Segments — and Who Should Endorse Them

The K-means algorithm identified three distinct segments in the NaturaLife customer base. Each demands a different influencer strategy.

VERY HIGH FIT

Eco-Conscious Digital Natives

Why they fit: Digital-first, value authenticity, actively follow ethical creators.

Creator type: Micro / nano eco influencers who live the values, not just endorse products.

MODERATE–HIGH FIT

High-Income Urban Trendsetters

Why they fit: Trend-sensitive, appreciate exclusivity, trust expert tastemakers.

Creator type: Macro / luxury lifestyle influencers with cultural credibility.

LOW FIT

Traditional Value Seekers

Why they fit: Prefer traditional channels and personal trust; low social media engagement.

Creator type: Not recommended. Reach via email, in-store, and word-of-mouth instead.

THE LESSON

Not every customer segment should be targeted with influencer marketing. A defensible strategy tells you where not to spend the budget, as much as where to spend it.

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Recap

Lesson 6 in One Slide

The four learning outcomes, revisited — with the one-line takeaway for each.

LO Key idea The takeaway
LO1 Influencer marketing & trends Match the creator type (nano/micro/macro/mega) to the campaign goal — and pay attention to AI creators, social search, authenticity, and multi-platform flow.
LO2 Network structures Influence lives in network position (bridges, connectors, gatekeepers) — not in follower counts.
LO3 SNA metrics Degree, betweenness, eigenvector, and PageRank each answer a different question — use them together.
LO4 Cluster analysis Segment audiences before choosing creators — and know which segments don't want influencer marketing.
FOR BREWLAB

The defensible recommendation isn't "hire one mega" or "spam 50 nanos". It's: segment your customer base, pick the segments most receptive to social influence, then choose creators whose network position reaches those segments — and measure with multi-touch attribution.

DATA4500
Next

Looking Ahead — Week 7

Next lesson we shift to generative AI for social media and marketing analytics — how tools like GPT and image generators are reshaping content production, campaign personalisation, and the cost economics of the influencer trends we discussed today.

To prepare

  • Complete the K-means notebook if you didn't finish in class
  • Skim the pre-reading on prompt engineering (in MyKBS)
  • Bring one example of AI-generated marketing content you've noticed in the wild

Reflection question

If AI influencers become 10× cheaper and 10× more common over the next two years, what happens to the metrics from today's lecture — engagement rate, authenticity signals, network centrality? Which still work? Which break?

Questions? Post in the DATA4500 discussion board or bring them to office hours.

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