Tuesday, September 15, 2009

Wisdom of the Crowd

At its most basic level the Wisdom of the Crowd (WOC) means that the aggregated thought and knowledge of millions of people can be smarter than trained individual experts. The concept of the Wisdom of the Crowd was documented and formalized by James Surowiecki in 2004 in his book titled "The Wisdom of Crowds."

The concept of WOC has become more widely utilized by many companies, with varying degrees of success, over the past few years. This concept, however, has been around forever – it's what democratic elections try to tap into. However the Internet takes it to an entirely different level due to the immense number and diversity of connections that it fosters between people.

In order for WOC to be truly successful there are four key qualities, as documented by James Surowiecki, which make a crowd smart versus an unruly mob. It needs to be diverse, so that people are bringing different pieces of information to the table. Itneeds to be decentralized, so that no one at the top is dictating the crowd's answer. It needs a way of summarizing people's opinions into one collective verdict. And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.

There are several examples of how WOC has been implemented successfully to drive value for both consumers and brands. Wikipedia, written and edited by tens of thousands of unpaid contributors, should be better than an encyclopedia written and edited by specialists. Wikipedia is one of the most highly trafficked sites on the Internet and now provides information and definitions to millions of people around the world.

Hollywood Stock Exchange (HSX.com) has over 700,000 members who use pretend money to buy and sell the "stocks" of movies and stars. At one point Johnny Depp was the most widely held stock. These are basically bets on how well a movie will do or how a star's career will go. HSX now sells its results to movie studios because its forecasts are more accurate than the studios' internal forecasts.

The question for Marketers today is can they harness the WOC in a productive way to delivery a unique experience that is not predicated on the development of deep and expensive content or extensive infrastructures?

RMG Connect has begun to experiment with the concept of WOC in programs for Diamond Trading Company and HSBC Bank.

For Diamond Trading Company, RMG Connect, created a site that celebrates the independence of women buying diamonds for themselves. The Diamond Right Hand Ring site (www.adiamondisforever.com) allows participants to construct statements made up of key words that express the thoughts and aspirations of the individual.

These statements contain key words such as: Determined, Celebrating, Ready, Proud, Lucky are aggregated by key cities in America and are displayed for everyone to view. For example in Kansas 7% of the respondents are Celebrating with 33% being proud. A visitor can compare each major American city and receive a quick snapshot of the key words/themes that are resonating with women in those cities.

By aggregating key emotive words/themes submitted by women from around the US by city, RMG Connect has been able to harness the concept of WOC to deliver a unique brand experience for women.

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