Theory: Innovation diffusion theory Theorists: Everett Rogers, Geoffrey Moore Biographies: Everett M.

Rogers is Regents' Professor, Department of Communication and Journalism, University of New Mexico. He has served on the faculty of Ohio State University, Michigan State University, University of Michigan, Stanford University, University of Southern California, and the University of New Mexico. Rogers is particularly known for his book Diffusion of Innovations, published in l995 in its fourth edition. Rogers has conducted research projects on various aspects of the diffusion of innovations in Colombia, India, Korea, Indonesia, Thailand, Brazil, Nigeria, and Tanzania, and in Iowa, Ohio, and Kentucky. He has taught in Germany, France, Mexico, Ecuador, Singapore, and Colombia. Rogers directs research on technology transfer from government R&D laboratories in New Mexico and Japan, the role of university-based research centers in creating and transferring technological innovations, and the role of research universities in technology transfer. Rogers is a Faculty Associate in the University of New Mexico's Center for Alcohol, Substance Abuse, and Addictions (CASAA), where he is involved in research on the effects of programs to prevent drunk driving in New Mexico, with emphasis on cultural factors in such behavior change. Rogers is also appointed by courtesy in the UNM Cancer Research Center, where he is investigating the role of the Internet in delivering nutrition information for cancer prevention in northern New Mexico and southern Colorado, particularly to Hispanics and Native American people (Everett Rogers, PhD, n.d.).

Geoffrey Moore is a Managing Director with The Chasm Group, a consulting practice based in California that provides market development and business strategy services to many leading high-technology companies. He is also a Venture Partner with Mohr Davidow Ventures, a California-based venture capital firm specializing in specific technology markets, including e-commerce, internet, enterprise software, networking and semiconductors. As a Venture Partner at Mohr Davidow, he provides market strategy advice to their high-tech portfolio companies. Geoffrey is a frequent speaker and lecturer at industry conferences and his books are required reading at Stanford, Harvard, MIT and other leading business schools. Geoffrey's current practice focuses on the concepts of his recent book Living on the Fault Line, targeted to CEO's and senior executives of Fortune 500 companies facing the impact of the Internet. Geoffrey's first book, Crossing the Chasm, initially published in 1991, adds compelling new extensions to the classical model of the Technology Adoption Life Cycle. He introduces his readers to a gap or "chasm" that innovative companies and their products must cross in order to reach the lucrative mainstream market. A revised edition was released in July 1999 to update industries and case-study companies. The sequel, Inside the Tornado, published in 1995, provides readers with insight into how to capitalize on the potential for hypergrowth beyond the chasm. This second book sorts out how the market forces behind the Technology Adoption Life Cycle demand the need for radical shifts in market strategy. Geoffrey's most recent book, Living on the Fault Line, focuses on a single theme: How should the management of a public company that rose to prominence prior to the age of the Internet manage for shareholder value now that the Internet is upon us? Living on the Fault Line guides executives and managers who are coping with disruptive technology,

destabilizing their core market positions, providing them with new models, metrics, and organizational practices to meet the challenges of the new economy. Prior to founding The Chasm Group in 1992, Geoffrey was a principal and partner at Regis McKenna, Inc., a leading high-tech marketing strategy and marketing communications company. For the decade prior, he was a sales and marketing executive at three different software companies. Geoffrey holds a bachelor's degree from Stanford University and a Ph.D. from the University of Washington, both in literature, and served as an English professor at Olivet College (Geoffrey A Moore, 2008). Description of Theory: Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system (Rogers, 1995, p. 5) Diffusion is a kind of social change, defined as the process by which alteration occurs in the structure and function of a social system. When new ideas are invented, diffused, and are adopted or rejected, leading to certain consequences, social change occurs (Rogers, 1995, p. 6). Every truly innovative high tech product starts out as a fad something with no known market value or purpose but with great properties that generate a lot of enthusiasm within an in-crowd. Thats the early market. Then comes a period during which the rest of the world watches to see if anything can be made of this (Moore, 2002 p. 6). Rogers' definition (outlined above) contains four elements that are present in the diffusion of innovation process. The four main elements are: (1) innovation - an idea, practices, or objects that is perceived as knew by an individual or other unit of adoption, (2) communication channels - the means by which messages get from one individual to

another, (3) time - the three time factors are: (a) innovation-decision process (b) relative time with which an innovation is adopted by an individual or group, (c) innovation's rate of adoption, (4) social system - a set of interrelated units that are engaged in joint problem solving to accomplish a common goal(Rogers 1995). In figure 1, a conceptual model of the diffusion of innovations process is provided. The original diffusion research was done as early as 1903 by the French sociologist Gabriel Tarde who plotted the original S-shaped diffusion curve depicted in figure 2. Tardes' 1903 S-shaped curve is of current importance because "most innovations have an S-shaped rate of adoption". (Rogers, 1983) The variance lies in the slope of the "S". Some new innovations diffuse rapidly creating a steep S-curve; other innovations have a slower rate of adoption, creating a more gradual slope of the S-curve. The rate of adoption, or diffusion rate has become an important area of research to sociologists, and more specifically, to advertisers (Diffusion of Innovation Theory, n.d.). Diffusion research centers on the conditions which increase or decrease the likelihood that a new idea, product, or practice will be adopted by members of a given culture. Diffusion of innovation theory predicts that media as well as interpersonal contacts provide information and influence opinion and judgment. Studying how innovation occurs, Rogers (1995) argued that it consists of four stages: invention, diffusion (or communication) through the social system, time and consequences. The information flows through networks. The nature of networks and the roles opinion leaders play in them determine the likelihood that the innovation will be adopted. Innovation diffusion research has attempted to explain the variables that influence how and why users adopt a new information medium, such as the Internet. Opinion leaders

exert influence on audience behavior via their personal contact, but additional intermediaries called change agents and gatekeepers are also included in the process of diffusion. Five adopter categories are: (1) innovators, (2) early adopters, (3) early majority, (4) late majority, and (5) laggards. These categories follow a standard deviation-curve, very little innovators adopt the innovation in the beginning (2,5%), early adopters making up for 13,5% a short time later, the early majority 34%, the late majority 34% and after some time finally the laggards make up for 16% (Diffusion of Innovations Theory, 2004). Characteristics Rogers (1995) identified in each category of adopters are as follows: the Early Adopters: (1) integrated part of the local social system, (2) greatest degree of opinion leadership in most systems, (3) serve as role model for other members or society, (4) respected by peers, and (5) successful; the Early Majority: (1) interact frequently with peers, (2) seldom hold positions of opinion leadership, (3) one-third of the members of a system, making the early majority the largest category, (4) deliberate before adopting a new idea; the Late Majority: (1) one-third of the members of a system, (2) pressure from peers, (3) economic necessity, (4) skeptical, and (5) cautious; the Laggards: (1) possess no opinion leadership, (2) isolates, (3) point of reference in the past, (4) suspicious of innovations, (5) innovation-decision process is lengthy, and (6) resources are limited. Although additional names and titles for the adopters of an innovation have been used in other research studies, Everett Rogers labels for the five adopter categories are the preferred or standard for the industry. Moreover, the specific characteristics that Rogers'

identifies for each adopter category is of significance to advertisers interested in creating an integrated marketing plan targeting a specific audience. Rogers differentiates the adoption process from the diffusion process in that the diffusion process occurs within society, as a group process; whereas, the adoption process pertains to an individual. Rogers (1995) defines "the adoption process as the mental process through which an individual passes from first hearing about an innovation to final adoption". Rogers breaks the adoption process down into five stages. Although, more or fewer stages may exist, Rogers says that "at the present time there seem to be five main functions (Rogers, 1995)." The five stages are: (1) awareness, (2) interest, (3) evaluation, (4) trial, and (5) adoption. In the awareness stage "the individual is exposed to the innovation but lacks complete information about it". At the interest or information stage "the individual becomes interested in the new idea and seeks additional information about it". At the evaluation stage the "individual mentally applies the innovation to his present and anticipated future situation, and then decides whether or not to try it". During the trial stage "the individual makes full use of the innovation". At the adoption stage "the individual decides to continue the full use of the innovation (Rogers, 1995)." Diffusion of Innovations Theory is at its best as a descriptive tool, less strong in its explanatory power, and less useful still in predicting outcomes, and providing guidance as to how to accelerate the rate of adoption. There is doubt about the extent to which it can give rise to readily refutable hypotheses. Many of its elements may be specific to the culture in which it was derived (viz. North America in the 1950s and 60s), and hence less relevant in, for example, East Asian and African countries, and as time

goes on. Nonetheless, it provides one valuable 'hook' on which research and practice can be hung (Clarke, 1991). Why is the Adoption Process of any relevance to advertisers? The purpose of marketing and advertising is to increase sells, which hopefully results in increased profits. It is through analyzing and understanding the adoption process that social scientists, marketers and advertisers are able to develop a fully integrated marketing and communication plan focused at a predetermined stage of the adoption process. Rogers (1995) defines the innovation-decision process as the "process through which an individual (or other decision making unit such as a group, society, economy, or country) passes through the innovation-decision process". There are five stages in the InnovationDecision Process: (1) from first knowledge of innovation, (2) to forming an attitude toward the innovation, (3) to a decision to adopt or reject, (4) to implementation of the new idea, (5) to confirmation of this decision. It should be noted that prior conditions affect the innovation-decision process. Prior conditions such as: (1) previous practice, (2) felt needs/problems, (3) innovativeness, and (4) norms of the social systems. The first stage of the innovation-decision process entails seeking one or more of three types of knowledge about the innovation. Rogers describes these as: (1) awareness knowledge is information that an innovation exists, (2) how-to-knowledge consists of the information necessary to use an innovation properly, and (3) principles knowledge consists of information dealing with the functioning principles underlying how the innovation works. Rogers states that awareness and knowledge of an innovation can be made most efficiently through mass media. It will be interesting in twenty years or so, to ascertain if

mass media will still be considered the most efficient means to create product awareness and knowledge. It is important to consider the consequences or changes that occur to an individual or to a social system as a result of the adoption or rejection of an innovation. Rogers identifies three consequences or changes: (1) Desirable versus undesirable consequences, (2) Direct versus indirect consequences, and (3) Anticipated versus unanticipated consequences. For the most part, the world of advertising is concerned with the diffusion of innovation process in terms of how such research studies can facilitate product adoption and therefore market segmentation. But it should be mentioned that additional research exists on the diffusion of innovation theory in other scientific disciplines, such as economic development and in the technological sector. In The Innovative Choice: An Economic Analysis of the Dynamics of Technology, Mario Amendola and Jean-Luc Gafford compare the process of innovation with the diffusion of innovation as "the extent and the speed at which the economy proceed to adopt a superior technique." The concern is on how the economy adjusts or `diffuses' to the new technology. This adjustment or diffusion can be instantaneous or gradual. Amendola explains a `new', expanded interpretation of the process of innovation has emerged. Less emphasis is on the actual absorption of a given technology, and more importance is placed on the actual process through which a new technology is developed step by step. "The economy, in this context, no longer adjusts passively to the technology but becomes the instrument for determining the extent, the nature and the articulation through time of the development of the technology." (Amendola, 1988) Although, we are most concerned with how the diffusion of innovation theory relates to the field of

advertising, it is meaningful to give a brief description of other existing research that is based on and integrates the diffusion on innovation process into its' study. Mark Dodgson and John Bessant (1996) in their book "Effective Innovation Policy: A New Approach" recognize that `success' in innovation is not simply a matter of moving a resource from A to B, but "the capability on the part of the recipient to do something useful with that resource", in other words, to innovate effectively. Dodgson and Bessant acknowledge that innovation is not an "instantaneous event, but a time-based process involving several stages". They have identified these stages as: (1) initial recognition of opportunity or need, (2) search, (3) comparison, (4) selection, (5) acquisition, (6) implementation, and (7) long-term use (involving learning and development). In conclusion, the diffusion of innovation process consists of four main elements: the innovation, communication through certain channels, over time, and among the members of a social system. Research concerning the diffusion of innovation process has increased significantly the past several decades due to its versatility. A universality or similarity found amongst the various research studies on the diffusion of innovation process is that the adoption process or the rate of diffusion can be charted on an S-shaped curve. Of vast importance to those in the advertising field is the innovation-decision process. Rogers defines the innovation-decision process as the process through which an individual passes from first knowledge of an innovation to forming an attitude toward the innovation, to a decision to adopt or reject, to implementation and use of the new idea, and to confirmation of this decision. The diffusion of innovation process can be tracked

on a micro level as is the case of an individual who is a targeted member of an audience, or traced at the macro level when considering economic development or technological advances. In either instance, during the course of the twentieth century the diffusion of innovation theory has proven to be versatile, universal, but most important relevant. Some of the methods used to evaluate the diffusion of innovations are network analysis, surveys, field experiments and ECCO analysis. ECCO, Episodic Communication Channels in Organization, analysis is a form of a data collection log-sheet. This method is specially designed to analyze and map communication networks and measure rates of flow, distortion of messages, and redundancy. The ECCO is used to monitor the progress of a specific piece of information through the organization (Diffusion of Innovations Theory, 2004). Report prepared by: Ryan Burkett References: Amendola, M. & Gaffard, J.L. (1988). The innovative choice. An economic analysis of the dynamics of technology. Basil Blackwell Limited.UK Clarke, R. (1991). A primer in diffusion of innovations theory. Retrieved October 12, 2008 from http://www.anu.edu.au/people/Roger.Clarke/SOS/InnDiff.html Diffusion of innovations theory, (2004). Retrieved 10-12-2008 from http://www.tcw.utwente.nl/theorieenoverzicht/Theory %20clusters/Communication%20and%20Information %20Technology/Diffusion_of_Innovations_Theory.doc/ Diffusion of innovation theory, (n.d.). Retrieved 10-12-2008 from http://www.ciadvertising.org/studies/student/98_fall/theory/hornor/paper1.html

Dodgson, M. & Besssant, J. (1996). Effective innovation policy: A new approach. International Thompson Business Press, London. Everett rogers phd, (n.d.). Retrieved 10-13-08 from http://cervixdisparities.cancer.gov/application/lecture_capture_delivery/view_pres enter_biography.aspx?str_pk_presenter=fbe3dc44-373f-432b-8699e1a5d119b841&str_pk_organization=1c05dd33-4bd6-4b60-99344694961ce0fa&str_pk_conference=3270af4a-ed59-43c3-af4c-479c4292d557 Geoffrey A.Moore, (2008). HarperCollins Publishers. NY, New York. Retrieved 10-1308 from http://www.harpercollins.com/authors/6863/Geoffrey_A_Moore/index.aspx? authorID=6863 Moore, G. (1991). Crossing the chasm. Retrieved October 12, 2008 from http://www.amazon.com/Crossing-Chasm-Marketing-High-TechMainstream/dp/0887307175 Rogers, E. (1962). Diffusion of innovations. Fifth edition. Retrieved October, 12, 2008 from http://www.amazon.com/gp/reader/0029266718/ref=sib_dp_pt#reader-link Rogers, E. (1983). Diffusion of innovations. Third edition. New York, The free press.

figure 1: Conceptual Model Diffusion of Innovations

Source: Rogers (1995)

Figure 2: S-curve of Innovation

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