Little do marketers know, the Network Effect component of marketing strategies has been in effect under different names for millennia:

A long time ago, there was a very selfish king. The king worked all of his people hard, and collected almost all of the rice they grew after every harvest. They grew so much rice that they stripped the land of all its fertility, and famine struck the kingdom. When the people pleaded with the king to give them some of their hard-earned rice, he stalwartly refused. One day, a village girl happened to be walking beside a royal servant transporting rice in a basket with a hole in it. She gathered the rice and returned it to the king, and for this service, the king promised her a reward.

She asked for this: one grain of rice for today, two grains tomorrow, four the next, then eight, and so on for thirty days. “Such a modest reward,” the king thought, and granted it.

And then everyone ate rice.

To anyone who knows the outcome of this tale, it’s abundantly clear that this king, for all his power and rice, was not very mathematically astute. The first grain of rice arrived, as promised, on the first day. And the next day, two grains. But on the twenty-first day, the village girl received 1,048,576 grains of rice. And on the last, she effectively emptied out the king’s storehouses with the 536,870,912 grains of rice. The villagers never went hungry after that.

So why do I tell this tale? What does all this have to do with marketing?

Let’s think about the store of rice as the people on Twitter. And you are the king (or queen or emperor or raja or supreme overlord). If you broadcast a message to your followers (your grains of rice), and your followers broadcast it to their followers, and their followers… We have the sort of exponential growth that fed the village. This is the Network Effect, a measure studied by the Social Currency Index which ranked the Forbes 500 companies based on their usage of social media marketing on Twitter. Whole Foods, which has followed over 500% more users than the second place company, is able to cement their social media presence using this particular touchpoint. But the power of it is in the masses: if Whole Foods publishes an announcement, and this gets bounced to higher and higher levels of reach, they will just have created an impression on a number of people exponential to the original number they could have contacted. That’s not bad.

Of course, in reality, one grain of rice does not always yield two grains the next day, the same way some investments don’t pay for themselves in the long run. The real rate of return is more a function of how effectively one uses the platform. But the math is on your side – so actively engage your fans, grow your network, and create those impressions.

For more about the Social Currency Index study, please visit this page.