Crowds Being Manipulated
I didn't want to write about this, but I think that if its brought to attention to most of these online platforms, perhaps something will be done about it. Some of the most influential websites include
Digg,
Reddit,
YouTube,
MySpace, and
Yahoo News. Like most social networking sites, these sites include areas for superlatives, that is Most Viewed, Most Emailed, Highest Rated, etc. Collactive which Sequoia Capital invested in (via
The Alarm Clock) helps you get your story to the top of these sites. You simply submit your story to Collactive and they utilize their network to affect the social network rankings. Digg, of course, is not happy with this, as their tool like most of the other tools above is all about the collective "wisdom of crowds" and not about a single lobbyist manipulating the system. However, as Mashable has
pointed out before, its fairly easy to game YouTube to get to the
"Most Viewed" list via a couple of browser plug ins and a desire to do so.
As you can see this is a big problem not just for marketers but news in general. To some extent, yes, we need editors to make sure that we get real news on the front page instead of simply the most viewed, otherwise we'd still probably be
reading about Anna Nicole. But at the same time, Web 2.0 is about the collective intelligence of the group, and not simply the brute force that Collactive or any other system manipulation provides. And therefore you can see the danger here. The Web is about equality and not about money. However, if tools can be used to receive honorable mentions, high diggs, YouTube views, then the rich will continue to get richer. Great products and services will still be available online but will need to compete against the deep pockets of larger companies whose products might not be as superior. Furthermore, if we know that these rankings are being manipulated then what's the point? It becomes editorial again and the most Digg'd article becomes similar to "Collactive Presents..." and YouTube's Most Viewed becomes "Videos who's owners had nothing better to do but refresh a few hundred thousand times in order to draw traffic to their own websites."
It's a big problem for Web 2.0 just like spam was a big problem (and still is) for Web 1.0, especially for YouTube, where SuperMoviesDownload.com is trying to steal some of their traffic by gaming the system. And based on this, perhaps they will be able to more accurately reflect the collective wisdom of crowds...
Labels: digg, myspace, web 2.0, wisdom of crowds, youtube
Power of the People
Even
Digg couldn't withstand the power of the people or the so called
Wisdom of Crowds. Digg, traditionally against any type of DRM, monitors its posts and takes down anything that they feel is morally wrong. Yesterday (via
TechCrunch) someone posted the decryption key to HD DVDs. After the Digg team took it down, someone reposted it. Pretty soon, the entire Digg site went down with a deluge of the decryption key posted all over it. Kevin Rose, Digg's co-founder, says on their
blog:
But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.So that's it, that's what happens when you try to turn against popular opinion. Digg (valued at
$60 million per Businessweek's cover story) could become the next
Friendster, where users left at the blink of an eye. Fickle consumers have the power and especially online where the butterfly effect is magnified ten times over. It's a scary place to be right now for Digg as many of their million plus users have revolted against them.
What does this mean? Well, I've touched on it before, and again, I'm not sure how this phenomenon happens but if you think about companies out there
Apple,
Google, and
Craigslist are the "good guys" while
Microsoft,
Yahoo, and
Dell are the "bady guys." It's a connotation that can most likely be traced to a few choice events (Microsoft knocking down Netscape, Yahoo charging for email, and Dell's customer service debacle.) While Apple has come clean with its iPod batteries, Google discloses all (or wants you to think that), and Craigslist doesn't make that much money only through its job postings. Since then Dell has apologized, Microsoft has been a bit more open, and Yahoo provides free unlimited storage. However, the damage is done, and just like
Gladwell's book Blink, these corporations are the evil empire while our knight in shining armor are the former companies. Stay open, make sure that your PR team has experience in damage control, and address your customers because the power of the crowd is too much to handle (at least for a $60 million company).
Labels: apple, blink, digg, drm, google, microsoft, wisdom of crowds, yahoo
If you can't build it, BUY it.
Stockpickr, a social network geared around the portfolios of various investment professionals, was
bought yesterday by
TheStreet.com for undisclosed terms. We've been
talking about Stockpickr for a while now and whether or not the collective intelligence of the group could predict the fortunes of the market. We've noticed that Marketwatch launched something similar with so-so results. However, the difference is the aggregated knowledge that Stockpickr has, boasting the portfolios of Warren Buffet and George Soros.
I think that Stockpickr was a great acquisition by TheStreet.com which can utilize the social networking aspect to bolster its editorial content.
The Wisdom of Crowds approach holds again, as savvy investors dart to see which stocks were picked by which investment gurus. The real reason however that I wrote about this acquisition was because of all of the press surrounding social networks. MySpace and Yahoo both have equal page views, however MySpace has a CPM that is a third of Yahoo. I wrote about
metrics that MySpace commissioned to determine what the value of a friend add is.
Facebook, the
cover story of this month's Fast Company, was reportedly offered a billion dollars. YouTube of course $1.65 billion. A lot of money is being thrown at these social networks, but at the end, this money needs to be recouped. Of course, you can never charge someone to have an account, but if you can't do that, then how can you monetize this? Do you charge for premium content like TheStreet.com? Perhaps, after all this is how equity research makes their living (sort of). While it was a great buy (terms pending, of course) it remains to be seen if Stockpickr really is a stock picker!
Labels: facebook, myspace, social network, stockpickr, wisdom of crowds, youtube
Trouble for US IR Sites?
The latest statistics from Alexa (
via IR Web Report) show that traffic to Thomson's IR sites (
corporate-ir.net) have hit an all time low. With a large number of US blue chips and mid cap companies using Thomson, along with the recent run up in the S&P 500, one would expect a positive correlation between page views and stock price. However, the latest statistics do not corroborate this. It seems that investors are turning more to blogs (like
Seeking Alpha and tons of other blogs talking about industry, companies, products, etc), portals (like
Yahoo! Finance) and message boards/social networks (like
Stockpickr and
Bullpoo) for their information. Is it a Web 2.0 thing? Doesn't appear to be, as
Dominic Jones also notes that European companies' traffic is hitting an all time high.
What is happening here? I think its a few fold. The web is becoming more dynamic and static 'push' sites like Thomson's are just not cutting it. Investors would like a voice and an opinion in what is going on and the blog makes for a perfect forum for it. Social networks like stockpickr and bullpoo have become increasingly popular. Everyone wants to know what everyone else thinks. (I hate to bring it up again, but
the Wisdom of Crowds effect.) Further, social networks give everyone an equal footing to be judged based solely on performance. Portals like Yahoo! Finance are not "Web 2.0" ified but then again, its been a staple since pre-Web 2.0 days. WHAT? What I mean is that "if it ain't broke, don't fix it." Another example:
Bloomberg. In my opinion most traders are using Bloomberg as an instant messaging platform. Why? Because they've been using it since pre-email and they are comfortable with it. People have been using Yahoo! Finance since Web 1.0 and they have all of their data inputted and so forth (and since its customized, techincally it could be Web 2.0).
Investors relying on third party information like this is truly dangerous. As an IR/PR/Marketer you have no control over what message is being broadcast to the investment community about you. What to do about this? Well, as
I mentioned before, about 5% of the Fortune 500 has a blog, and yes we are still waiting for the SEC ruling on Reg FD. However, its clear that instant gratification/communication is what the investment community wants, not day old or even half day old IR information. While it may mean more communication, I think that in the long run investors will be won over and you'll be able to broadcast your true message.
Labels: blog niri, bloomberg, social network, web 2.0, wisdom of crowds
The Butterfly Effect
The New York Times had an interesting article this weekend
about how Hollywood and the music industry figures out if they have a hit in the early stages of its career. They don't. In a study that seems like it would be a great case study for
the Tipping Point, the author, a Columbia professor, talks about a study that he conducted that talked about rating music. In it, he subjected one group to simply the names of songs and bands, and the other group also had the number of downloads on it. As you can slowly see, the one group with the download number had markedly skewed results than the other one. Turns out that the subjects were not only influenced by the music but also by the number of downloads. The Butterfly / Snowball Effect in play here, where people are influenced also by what they perceive others to like. He goes on to site examples of Harry Potter being turned down by eight other publishers, the Beatles, Star Wars, etc.
Well how does that affect your marketing plan? Very interestingly, this comes back around to social networks and the Tipping Point. People have the herd mentality which is why even a stock price falls or rises higher when perceived news comes out that is bad or good, respectively. We are all Lemmings to one extent or the other. We are social creatures, and we don't want to be left out. So, in this case, we need to find those influentials, those people willing to take a risk and endorse something (even if its as simple as putting it on a blog, MySpace page, or creating a YouTube video about how great something is).
They're taking this risk, knowing that if all doesn't go according to plan, their reputation is on the line. But who are these people? I think that while mainstream media is the easy answer, you can find blogs that are certainly influential to a certain community (
TechCrunch for techies for example).
Tila Tequila, the infamous, most "friended" MySpacer. Perhaps you have to "game" a system to even be noticed. I know that when I go to YouTube, there is so much content, that I just want to view the videos with the most hits. People have figured out how to game these systems to appear just there (although their rating reveals what the content really is). I'm hoping that this is helpful for those of you out there trying to market your products in this vast ocean of "stuff." (After all, MySpace definitely is not the cleanest or best social networking site, yet, they somehow caught). But if I could figure out the next hit, I would be doing so, and as William Goldman once mentioned - "No one knows anything." Very true not only in Hollywood, but when trying to figure out who will be the next YouTube.
Labels: myspace, tipping point, wisdom of crowds, youtube
Another "Wisdom" Application
After
talking about Marketwatch last week, which by the way, when everyone was bullish the market went down (what does that say?), I've stumbled upon
another Wisdom of Crowds type application courtesy of Mashable called MyMuv.
MyMuv (pronounced My Move) is a trend tracking tool where you can create "battles" between two different things. Examples: Hillary Clinton vs George W Bush, XBox vs PS3, Coffee vs Tea, and a whole bunch of other battles, some that make sense and others that don't.
Now just like Marketwatch, once MyMuv achieves some type of critical mass, will it be able to accurately predict trends? I think that this will do a better job than Marketwatch since there is no financial incentive (at least not apparently) to choose for example coffee over tea. You choose hopefully what you really use or like and the wisdom of the crowd will determine whether or not you are in the majority. Since its a social network, it will prevent one from loading any of the battles and it will determine what type of person you are from your choices, although IE vs Firefox won't say much about you....perhaps.
I think its an interesting play and will probably require stricter monitoring to make it appeal on a macro level. It seems that it is India based with many references to India, which is fine, but many of the battle participants like a
Bajaj Pulsar or
Dharwad need more explanation! (Although Google and Wikipedia do a good job in defining.) Again, we'll keep our eye on this and see how it predicts the future!
Labels: social network, trends, wisdom of crowds
