Newsgame crystalizes the wisdom of the crowd

Danish TVstation TV2 has recently implemented a remarkably impressing new service, building upon the contribution of the users in crystalizing "the wisdom of the crowd".

The service - Nyhedsspillet ("the news game") - is a place for trading opinions on what will happen on a number of different questions (called shares), put forward by TV2. For example you can buy the share "Harry Potter will die in the next book" for the price of currently 61 points. And if Harry Potter really turns out to be dead when the last page is turned in Harry Potter 7, expected this summer, TV2 pays you 100 points for each share in your possesion.
However you're free to sell you shares, before the book hits the shelfs, for the number of points, the other users are willing to pay. If they all firmly believe Harry Potter IS going to die, they'll be willing to pay you very close to 100 points for each share.

What's facinating is, that the price of the share in this ways comes to indicate very precisely how likely the users believe the given outcome of the event (for example that Harry Potter dies) is. If the price is 50, this means that the demand (and therefore belief in dead of Harry Potter) precisely equals the supply (and therefore disbelief in the dead of Harry Potter). A price higher than 50 means the users have a stronger belief in his dead than the other way around. In short: the price of the share at any time is the very probality that the event the share is about, comes true, as percieved by the users.

In this way the News Game is highly interesting cross-over of bookmaking and opinion polling. A way of engaging the users, abstracting their knowledge and translating it into a single and very usefull figure. If the number of users is large enough, and the questions are rightly put, the TV2 news game will actually reveal the wisdom of the crowd, turning "the silent masses" into a vast news generating machine.

(I originally published this post at the New Media Trends blog)

The user revolution

I accepted very kindly the invitation to write on this blog and I’d like to suggest some topics come out from the massive analysis “The user revolution” recently posted from Piper Jaffray, one of the most famous american business banks. I’m sure that most of topics treated in this research will be very popular during the next IAB European Congress; meanwhile here are the 12 resuming points confirming without any doubt the changes on the way:

1. Global online advertising revenue to reach $81.1 billion by 2011.
2. Communitainment: Internet has increasingly become a principal medium for community, communication and entertainment -- three areas that have collided and are impacting each other's growth -- generating a new type of activity: communitainment. Communitainment is taking time away from other, traditional, types of content consumption on the Internet.
3. Usites - The increasing popular category of user generated sites, which we are calling Usites, are driving traffic away from other destinations and pose a challenge to the advertisers and publishers.
4. The Internet is now a mainstream medium: The web is the leading medium at work and the second leading medium at home behind television.
5. Internet usage patterns are changing, favoring Usites,communitainment sites, search, and away from traditional portals.
6. User Generated Brands. The consumers are taking control of content consumption and branding.
7. Media Fragmentation: Advertisers increasingly will need to buy more inventory, from nearly all types of media, especially the Internet, to have the desired impact.
8. The Golden Search: search has become the new portal.
9. Google's dominance is likely to expand, partly fueled by a wide variety of non-search related products that create a virtuous cycle of brand affinity for Google.
10. Video ads will be the driver of the next major growth in brand advertising and getting additional dollars shifted from traditional media to online.
11. Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding and increased site visibility.
12. Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.

It has been several years since Piper Jaffray is involved in studying the online communication business. Their “Golden Search” (2003) has considered the turning point in search marketing analysis and quite all their forecasts have been confirmed.

Interactive marketing channels to watch this year

Another interesting piece of research by Forrester Research I would like to share with you. Earlier this week, Forrester, published its ‘Interactive Marketing Channels To Watch In 2007’ report. The company asked some 170 interactive marketers what interactive marketing channels they use – and plan to use.

The results show that most marketers still focus on interactive channels that have proven what they’re worth: display advertising, search engine marketing and e-mail marketing.

Typical Web 2.0 phenomena such as social networking, blogs and podcasts are becoming more important but for the time being they are clearly less adopted by the marketing community.

Forrester sees a few important reasons for this. One of them is the fact that many marketers seem to have a ‘wait and see’ approach: they only invest in these new channels when their peers/competitors start doing so (but then of course you miss out on the first mover advantage). A second reason is a lack of measurable case studies that show the virtues and effectiveness of these new channels.

The providers know what to do: invest in relevant cases and content, showing advertisers the success recipes and the ways to achieve them…

Forrester has a nice PowerPoint presentation resuming the main results of the report: http://www.forrester.com/Events/Content/0,5180,-1667,00.ppt

Online advertising: UK shows the way in Europe

IAB UK released its 2006 data about internet advertising and online ad spend across the Channel. We, Europeans from the ‘old continent’ can only watch them, say ‘gosh’ and hope that IAB Europe can play a role in helping us to achieve similar results ;-)

IAB UK found that online expenditure overtook national newspaper spending and online was over half the size of the TV advertising market. In the UK, Internet now accounts for an impressive 11,4 % of all advertising revenues.

Also interesting to see how Search Engine Advertising still outgrows display advertising.

Check it out on http://www.iabuk.net/en/1/iabadspend2006.mxs

Advertising effectiveness

Do you ever wonder about the amount of visual stimuli we all get every day? Especially since most of these are ads? This movie created by Studio Smack will give you an amazing impression of just that. Even if you are aware of the fact that traditional advertising is losing effectiveness, this movie will still knock you off your feet on how real this is.

Here's the official introduction from Studio Smack:

“Studio Smack is a collective of young artists searching for new esthetics and concepts. Commissioned by the De Beyerd Museum three young graphic designers, former students of AKV/St. Joost, Ton Meijdam, Thom Snels & Béla Zsigmond, made a film about legible signs in town. The typo-animation Kapitaal (Capital) is an impression of the enormous amount of visual stimuli that plague us every day. The amount is so big that its commercial effectiveness has become utterly dubious.”

I still find this a stunning video every time I see it, make sure you take a look!

The measuring debate: share your thoughts

Last week Alain Heureux posted an item where he asked what will be the media currency of the future. The debate on how to measure advertising and customer interactions is not new. And it is not obvious. Although advertisers and media companies need objective data to calculate their ROI and compare the effectiveness of media, the simple fact of comparing media is in a way a contradiction in terms. Comparing media by reducing them to absolute data regarding reach is somewhat reducing the media themselves. Worse, even: it is getting harder and harder to compare two INTERACTIVE media. How can you compare, for instance, the impact of a user-generated community where visitors post their home-made movies to the impact of, let’s say, a portal or an online news medium? Comparing quantitative visitor data is one thing but how about qualitative visitor data? Not the plain and simple reach of a medium but the expression of what visitors of that medium do (compared to our targets)? The question is more actual than ever, given the explosion of online communities that invite their visitors to participate and co-create, rather than to simply ‘consume’.

The discussion on how to measure media happens in the online space too. Parameters such as visitors, pageviews and numbers of subscribers are not enough anymore. Think about the discussions about the number of Second Life subscribers: how many of these accounts are used how often and for how long? And is it really that what matters?

Recently comScore announced it adopted a few new metrics that focus more on what people do on online media. Amongst others, comScore, introduced a metric measuring the number of visits per visitor per day, thus trying to measure visitor loyalty.

Maybe part of the answer lies in looking at what happens in the field of Web Analytics, solutions to measure what people do on our websites. In the beginning they were all about measuring absolute visitor data and visiting patterns. Today, Web Analytics vendors focus on KPI’s, Key Performance Indicators, that are unique to every company since they do not measure online media but business criteria. And then the question becomes: what are the KPI’s for advertisers? And is the industry able to shift from a media perspective to a business and user perspective?

There’s a lot to be said about these issues. I will come back to them in later posts. In the mean time, please share your thoughts…

Forrester on Web 2.0 applications: the CIO factor

Since I noticed Forrester Research will be at Interact, I would like to share a recent Forrester survey with you. It’s about Web 2.0 applications and for once it’s not about what (online) marketing people think about it, but what CIO’s (Chief Information Officers) say.

Forrester found that CIO’s are generally interested in so-called Web 2.0 applications, including blogs, social networking applications, wiki’s, RSS, tagging and so on. Especially those applications with a clear user advantage are appealing to CIO’s. Think for instance about RSS as another way to communicate with customers.

However, Forrester also found that large companies tend to prefer big software companies over small Web 2.0 start-ups to buy these applications. They want them to be part of existing software suites (as many content management vendors for instance already do). And that, of course, is a challenge for the industry since many of the Web 2.0 applications are initiated by small, creative, starting companies that have the freedom and imaginative power to launch innovating concepts and ideas.

The fact that CIO’s seem to think from a user-centric perspective, as illustrated above, is great. However, CIO’s also have to think about the future of their corporate IT environment: issues like the integration within existing IT infrastructures, security and trustworthiness are crucial in their mindset. Apparently these values are fulfilled through the large software brands, at least in the CIO’s mind.

So what does this all mean? First of all it shows that new ways of establishing user-centric relationships are not only adopted by the marketing community but also by the IT staff (often first movers when it comes to using innovative IT technologies). Second of all it shows that there still are hurdles to overcome, amongst others from the supplier side. Partnerships between Web 2.0 start-ups and their peers or with larger software vendors are probably the future. This leads Forrester to conclude that a consolidation in the 2.0 software space might be underway.

Third of all maybe this is an issue for Interact: not only asking ‘what can all these fine new applications do for me (the advertiser/marketer) and my customer’ but also: what do I, as a marketer, should do in order to collaborate with my IT staff, and (probably at least as important) to convince my board. Interacting is not only with the external customer: it’s also with the ‘internal customer’: the rest of the company…

More about this topic: http://www.forrester.com/Research/Document/Excerpt/0,7211,41797,00.html