Cultural Markets

I was forwarded an interesting article today from the New York Times on Cumulative Advantage in marketplace success. Its an interesting read about social influence on creation of 'hits'. It is based on a a study done that claims that reliable hit prediction is impossible, no matter how much you know.

Conventional marketing wisdom holds that predicting success in cultural markets is mostly a matter of anticipating the preferences of the millions of individual people who participate in them. From this common-sense observation, it follows that if the experts could only figure out what it was about, say, the music, songwriting and packaging of Norah Jones that appealed to so many fans, they ought to be able to replicate it at will. And indeed that’s pretty much what they try to do. That they fail so frequently implies either that they aren’t studying their own successes carefully enough or that they are not paying sufficiently close attention to the changing preferences of their audience.

The common-sense view, however, makes a big assumption: that when people make decisions about what they like, they do so independently of one another. But people almost never make decisions independently — in part because the world abounds with so many choices that we have little hope of ever finding what we want on our own; in part because we are never really sure what we want anyway; and in part because what we often want is not so much to experience the “best” of everything as it is to experience the same things as other people and thereby also experience the benefits of sharing.

The concepts discussed in this article have a very similar ring to the concept of social epidemics put forth by Malcolm Gladwell in his book The Tipping Point, however, the interesting part about this study is how 'hit' outcome would never be the same if repeated due to changing conditions and the and the influence of the (cultural) market itself.

If markets not only reveal our preferences but also modify them, then the relation between what we want now and what we wanted before — or what we will want in the future — becomes deeply ambiguous.

For business's it doesn't mean we should stop trying to predict future results or measure information from the past, but it is important to be aware of cultural market effects and the relative impact on your product or service.

Community Immunity - Will Social Networks Tip?

I recently listed to the audio version of the Tipping Point by Malcolm Gladwell. He has a more recent update to the end of the book where he talks about the concept of immunity and social epidemics.

He introduced the concept of the “fax effect” originally proposed by Kevin Kelly. If you are unfamiliar it goes like this: The first fax machine cost millions of R&D dollars, and retailed for a few thousand dollars, but was relatively useless since there were no other machines to communicate with. Each successive fax machine purchased made all the previous machines more valuable. When you bought a fax machine, you were buying access to the network which is much more valuable than the machine itself. This is referred to as the law of plentitude. Cell companies use a similar concept to market and sell their products and services. The logic of the network is that power and value come from abundance.

Gladwell continues to explain that this is why email is supposed to be so powerful, but is this true? Just like the phone network has grown so large that users have built up ‘immunity’ (answering machines, caller ID, and other filtering mechanisms), so too is this starting to happen with email. When you first got email, and had your first few members of the network, you spent much time and effort crafting well thought out messages. Now we get 1000 (hopefully filtered) spam emails, and often 10’s or hundreds of messages from people. Most email users are now creating shorter responses, being more selective and delayed in response. Gladwell argues that these are all symptoms of immunity, and that large network communication channels have, and will continue to suffer growth tipping points creating immunity, similar to how virus’s spread and eventually die once enough users become immune.

My question is whether this will happen to social networking communities, and I think unfortunately it will. Think about MySpace. Who can really manage a hundreds or thousands of ‘friends’. Once the novelty wears off, when does this network just become like the hundreds of emails you get. Social networks could too reach an immunity tipping point, where they become so large that the very reason that they seemed so attractive, cause its own demise. In a members’ quest to become connected, they are starting to repeat what other networks have already succumbed to. Linkedin is also beginning to show signs of this, with ‘super connectors’ who will link with anyone and everyone. It seems like a great way to grow the network, but this is essentially the beginning of a possible immunity tipping point. Ultimately it comes down to the community members to keep the social network thriving, but not letting it get out of control to a point where community immunity kicks in.

'Citizen Marketers' and 'The Tipping Point'

I am excited to read the new book by Ben Mcconnel & Jackie Hubba entitled Citizen Marketers, but in a recent post by Ben on the 4F’s, I couldn’t help but notice the similarities between the 4F's and the concepts introduced in the Malcolm Gladwell’s 2000 book – The Tipping Point around categories of people who have the power to produce social epidemics.

Citizen Marketers F1 – Filters: Filters are human Wire Services. They collect traditional media stories, bloggers’ rants and raves, podcasts, or fan creations about a specific company or brand and then package this information into a daily or near-daily stream of links, story summaries, and observations.

• Tipping Point Parallel - Mavens: A maven is someone who has a disproportionate influence on other members of the network. They are intense gatherers of information and impressions, and so are often the first to pick up on new or nascent trends.

Citizen Marketers F2 – Fanatics: The Fanatics are true believers and evangelists. They love to analyze the daily or weekly progress of a brand, product, organization, or person and prescribe courses of action. They are, essentially, volunteer coaches.

• Tipping Point Parallel - Salesmen: Charismatic people with powerful negotiation skills. They exert "soft" influence rather than forceful power. Their source of influence may be the tendency of others, subconsciously, to imitate them rather than techniques of conscious persuasion.

Citizen Marketers F3 – Facilitators: Facilitators are community creators. Their primary citizen marketer tool is a Web-based bulletin board or community software. Facilitators are like the mayors of online towns, and some online communities exceed the populations of small cities.

• Tipping Point Parallel - Connectors: Those with wide social circles. They are the "hubs" of the human social network and responsible for the small world phenomenon. They are the kinds of people who know everyone.

The 4^th 'F' in the Citizen Marketers is a Firecracker. Firecrackers are the one-hit wonders of citizen marketers. They can attract considerable attention because they have created a song, animation, video, or novelty that generates a lot of interest but tends to die out quickly as the creators go on with their other work.

• The interesting thing about a firecracker is that they wouldn’t make it very far without the easily available production tools and the support (although short sometimes) of the other 3 F’s and their equivalent Tipping point persona.

The fact that they are similar is probably no coincidence. The concept of The Tipping Point, is exactly why Citizen Marketing is successful.

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