An Agent-Based Model of Viral Marketing: Comparing online-based viral and traditional marketing in a closed system for fashion trends in a competitive setting

Viral marketing, is it hot or just hot air? Is the only thing viral about viral marketing the hype it‟s receiving from the academic community, the corporate world, and the media? This study presents an agent-based model to determine if viral marketing is significantly more effective than traditional marketing in the context of a closed world where two clothing companies compete with one another for consumer loyalty, one using only online viral ads and the only online traditional ads. The study concludes that viral marketing has a small, yet statistically significant advantage over traditional marketing as a whole. The study also finds that viral marketing does significantly better in settings with high populations and high levels of localization.