Business Quests in the Information Age

Figures of the day: the impact of product reviews

According to the February 2008 issue of Entrepreneur magazine "product reviews play a big role in consumers' decisions on what to buy" and the piece goes on to provide the following figures:

• 62% of consumers read consumer-written product reviews online
• over 80% say their purchase decisions have been influenced by reviews
• 70% of shoppers share product reviews with their friends, family or colleagues

My take is that this is nothing new: consumers have always been sharing good tips, but owing to the Internet this is only beginning to emerge as a quantifiable phenomenon that attracts the attention of marketeers who are facing the impossible task of capturing human attention in an ever more cluttered media landscape. The interesting question though is this: aside from facilitating consumer expression can marketing pros whether working for advertisers or for agencies exploit the phenomenon to make the brands they serve more successful? And as a corollary I wonder whether the value lies in the technology that facilitates the recommendations or in the human interactions that can help understand better and record a large set of subjective experiences with a given product.

Chaotic influence or why my cat could be a VIP

There's been quite some noise when Gladwell published "Tipping Point" and it's a well written book with an interesting theory about Salesmen, Mavens and Connectors. But does the theory really work? Are there always Salesmen, Mavens and Connectors in all fields of human activity? Can the process be "artificially" triggered and guided to help someone deliver a targeted message to a given audience or achieve a specific kind of behavior in a population (e.g. buy something)?

Considering the vast and increasing sums of money invested by marketeers these past few years one would think that yes is the answer to all of the above questions. Maybe not quite... no make that "definitely not". So argues Duncan Watts who challenges the very idea that influence can be "remote controlled" by creative types working for ad agencies. He makes the case that influence is in essence a chaotic process such that anyone could in fact and perhaps unbeknown to themselves, exert influence. He goes even further to claim that influence happens by accident more often than not. So according to Watts, my cat could very well be a VIP, i.e. a Very Influential Person (yes, my cat is a Person)! The article of Fast Company is worth reading. Interestingly, Watts speaks of a chaotic process and argues that influence happens mainly by accident (see graph below scanned for Fast Company). he seems to have reached that conclusion by programming artificial populations with hundreds of different combinations of parameters in the models of "influence" or transmission he used. There was no conclusive evidence as to the existence of influential individuals who are supposed to be able to trigger the spread of a message of behavior across a large proportion of a population.

Now, the very concept of "influentials" is something that drives me nuts because there is a hell of a lot of talk about them in all sorts of campaigns, yet nobody seems capable of giving a rigorous definition of what that new animal is, nor how to characterize and measure the phenomenon. Bottom line: there is considerable lack of precision and quite some BS in the stuff being told to people attending seminars and to advertisers who are so desperate to actually make an impact that they are willing to trade the unmeasurable means they know for supposedly better means that will deliver better ROI. And in fact the early adopters have been quite successful, but as the number of "influence marketing" operations increases, the impact of each of those campaigns will become lower and lower. So unless online marketing professionals actually tackle the imprecision regarding the very concept of "influence" I have hard time seeing this business become sustainable in the long run.

If I were in that business, I would invest some research money into building a minimalistic model of the influence phenomenon based on a model coming from the field of complex adaptive systems and I would relentlessly test and refine it to reach a point where entire campaigns could be structured in a more scientific way with the end objective to be able to identify fields in which campaigns can actually rely on "influence" and if so to make those campaigns as efficient as possible.

Great User Generated Content in the US Primaries

Here's a piece I think is a shining example of user generated content and a strong indication that open online platforms give real power and influence to the people. Now sure whether that validates Gladwell's tipping point, but it does show that the people can wield some influence. Now the question is whether this influence will be stronger than that of insiders of a system, in this case the US political establishment. Something interesting to watch for marketeers and communication pros.