Make Marketing History

The views of a marketing deviant.

Thursday, April 26, 2007

The Weakness Of Crowds.

A Columbia Univeristy experiment shows that people's rating of a product (in this case, music) is indeed influenced by the opinions of others. Songs received higher ratings from people who were told that they had previously been highly rated than from a similar group without that information.

Because the long-run success of a song depends so sensitively on the decisions of a few early-arriving individuals, whose choices are subsequently amplified and eventually locked in by the cumulative-advantage process, and because the particular individuals who play this important role are chosen randomly and may make different decisions from one moment to the next, the resulting unpredictability is inherent to the nature of the market. It cannot be eliminated either by accumulating more information — about people or songs — or by developing fancier prediction algorithms, any more than you can repeatedly roll sixes no matter how carefully you try to throw the die.

So much for the power of the early adopters, but the real question for marketers is why the followers follow? Does the previous recommendation provide positive reassurance to risk-averse followers or does it encourage conformity for fear of standing out from the crowd?

Furthermore, although wandering around supermarkets has shown to me the astonishing power that best-before dates hold over most shoppers, I wonder how, outside of sociology experiments, do the followers determine how a product or service has been rated?

2 Comments:

Blogger iScatterling said...

John,

I heard Columbia mentioned a couple of times in a call yesterday evening. I don't recall the study nor the results but I was agog at hearing that this was a 'global' study and everyone, (including me at a West Berkshire village in England, Europe), should read the material because it applies globally and if we want to be a success, we best darn well do what those boyos at Columbia say we should!

Seems like the baseball World Series metaphor has caught on at Columbia too! Alas.

9:39 AM, April 27, 2007  
Blogger john dodds said...

Having co-authored a marketing paper under the aupices of my marketing professor at Columbia aeons ago, I would suggest that your reaction is entirely appropriate.

12:53 PM, April 27, 2007  

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