In earlier posts (one, two, three) I’ve discussed how blogs can be predictive of popular opinion. The main reason is that blogs acts as early adopters of news stories and ideology, and vet these for the broader public.

I want to bring your attention to some patterns we’ve noticed about Wonkosphere which shed some light on how we should think about the role of bloggers in the current political process (so-called Politics 2.0).

First, political blogs are consumed in much the same manner as mainstream media is, which indicates that readers treat political blogs not as seperate from, but rather as part of, mainstream media. Wonkosphere traffic is greatest on Monday, and tends to peak before breakfast, lunch and dinner, i.e. when people are cruising on the net to end a portion of their work day. Blogs act as newspapers for most readers.

Second, very few blogs break stories. It is a myth. From our data, the vast majority of bloggers still rely on mainstream media for the content they comment on. In fact, a blogger is more likely to cite mainstream media as they are another blogger. Thus, bloggers are primarily amplifiers rather than sources of news.

Third, the popularity of political blogs tends to follow a Pareto (power) law, meaning that there are a few blogs that have a very large number of readers while most blogs have few readers. This means that the influence of blogs is also so distributed, leading to elite blogs (e.g. MyDD, Hot Air), in the same way we have elite mainstream media sources (e.g. New York Times, Newsweek).

Put together, these patterns imply that political blogs are acting as supplements to mainstream media, rather than substitutes for it. The impact on the system is more volatility–blogs make most news spread faster, but sometimes it’s slower; blogs spread both fact and opinion, truth and slander more rapidly; only a few blogs influence opinion most of the time, but any single blog has the potential to impact everyone; and the blogsphere both enables extreme candidate-inevitability and the potential for anyone to come-from-behind in a shocker.

In the previous posts (part 1, part 2), the conclusion to this question based on analysis of the political blogosphere was: you bet. Political blogs can create and rapidly diffuse stories and opinion in a way that mainstream media cannot. Now let me turn the question around a bit, and ask: Are political bloggers predictive?

Everett Rogers was one of our great American thinkers, and his classic book “Diffusion of Innovations” is the bible concerning how both tangible innovations (like a product) and intangible innovations (like an idea) diffuse in a society. He identified that there are different “types” of people per when they adopt: first innovators adopt, then early adopters, early majority, late majority, and finally laggards. In his theory, early adopters are the most important group in terms of the likelihood of broad difussion, as they take the bold ideas from the innovators and mold them for adoption by the pragmatic early majority.

In a political context, the innovation in Roger’s model is ideology, political bloggers are both innovators and early adopters, primary voters are the early majority, and swing voters are the late majority.

Will bloggers vote in the same way that the general populace does? According to Roger’s theory, the answer would be yes. As people at the front-end of the adoption curve, bloggers have to “adopt” before the general populace does. Not all bloggers adopt the same idea–as ideological leaders, their views are going to tend to be more intense and diverse, and more ideological and less pragmatic. Nevertheless, bloggers in the aggregate will tend to move ahead of the curve and thus be predictive.

Imagine a funnel of political ideas. At the front-end of the funnel, many ideas exist in the ideological soup. Bloggers who are innovators, and the political campaigns, create these innovations, and bloggers who are early adopters select and shape those ideological innovations in such a way that they are attractive to the early majority, i.e. the primary voter.

I suspect the same dynamic in a commercial context. Early product adopters are the first to experience a new product, and are of a personality type that loves to share experiences with others, i.e. they are the ideal bloggers. If bloggers are positive, it's a good bet that the new product or service will take off. If bloggers are not paying attention, that's bad news. If bloggers are paying attention but negative, the situation may be salvagable, if you can listen to their complaints and take action.

This is the second in a series of posts addressing the question: Do blogs have predictive power?

In the first post, I made general comments that blogging communities serve as accelerators, laboratories, and early adopters. To make this more concrete, let's consider the political blogosphere, which is huge in size and very active. Since August my colleague Steve Corman and I have been running, Wonkosphere, which tracks over 1500 conservative, liberal, and independent blogs as they discuss the 2008 presidential race. Here are some observations from our "deep dive":

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A reasonable question concerning the social media is: Are blogs predictive? I will answer that question over the next four posts: first I shall answer the question from the perspective of the consumer-world, and then address it with respect to the political blogosphere, and then talk about some particular examples.

What do we really mean by “predictive”? I think de facto this question is comparative; what we really mean to ask is

1. Do blogs process and spread information more rapidly than other mainsteam media (MSM)? In other words, are they a “first mover” or “early adopter”?

2. Do blogs create buzz around something that would otherwise go unreported by MSM? In other words, are they a “buzz creator”?

In the first case, it’s the speed of the medium that comes into play. In the second case, it’s the diversity of the medium that comes into play. One cannot perfectly seperate the two, but I think it’s worth distinguising them.

First let me answer these questions from the perspective of the consumer-world. We have plenty of examples where the blogosphere, or the internet in general, kept a story alive until MSM could get around to it. Perhaps the most famous is the Intel Pentium chip flaw. For about a month it was relegated to a discussion board topic, and Intel ignored it. Because of the compounding interest in the story (who doesn’t like to take down a giant?), it stayed alive while being ignored by MSM. It is interesting to note that many execs at Intel, including supposedly Andy Grove himself, were not aware of the issue until it hit MSM.

In these cases, blogs have the potential to give a worthy story legs and sustenance until it “matures”, ready for diffusion in MSM.

The second situation is one where bloggers take a more active role in actually uncovering news and making it public. The Dan Rather-Bush draft story is an example, where bloggers quickly vetted and rejected Rather’s story as bogus, which eventually led to the “death” of the Dan Rather brand.

Another example I like to cite involves the Aug 2006 banning of Coca-Cola (and Pepsi) by two Indian states, for having tainted water samples. Most people in the US heard about it on Aug 10, from their local newspaper. It hit large US MSM (e.g. USA Today, BBC, ABC) two days earlier, and NYT led the second-wave of MSM with an Aug 07 report. There was a first wave of MSM coverage that went ignored around Aug 3, with reports from BBC, Reuters, and Toronto Sun. BUT–the Indian blogosphere had been discussing this as early as mid-June (e.g. World Prout Assembly, Mission and Justice), a month BEFORE the court ruled against Coke and Pepsi. Finally, if you were tracking Indian blogs all year long, you would have known that Indian citizens in certain towns were furious with Coke for “stealing” the water from their aquafers, and that trouble was a brewin’ as early as March 06.

So in the consumer world at least, companies know that any single blogger can create a PR catastrophe that has to be attended to; and likewise, positive bloggers can enhance the value of the brand enormously, especially in terms of attracting new customers.

Tomorrow, I’ll address these questions from the perspective of the political Wonkosphere….

There is unprecented money AND talent going into the 2008 Presidential Campaign. Already Barack Obama and Hillary Clinton have broken fundraising records and are preparing for an on-slaught of TV spots; Mitt Romney recently aired his 10,000 TV spot; and Ron Paul made news today by announcing that he had raised $5M in the third quarter, which will allow him to also start running TV spots. Anyone involved in corporate communications should really take a good look at this year's campaign, because there's lot of excellent PR and marketing being done that we can learn from.

As an example, I'd like to analyze Rudy Giuliani's New York Times ad from about a month ago. The context is MoveOn.org’s ad entitled General Petraeus or General Betray Us? Cooking the books for the White House. The ad played to the base well and certainly generated a lot of buzz. From MoveOn.org’s perspective, I would venture to guess that they would say that the ad did what they intended it to do. Let's look at it, compared to Giuliani's ad.

The first thing our eye is drawn to is Petraeus’s picture. Why did MoveOn choose this picture? It does not make him look “untrustworthy”; in fact the uniform and angle give him an air of authority. Next we see these strong anchors at the top and bottom, “suspension of disbelief” and “spewing political venom”. Combined with the 9/11 framing, this evokes an emotional response from the reader. There’s a nice simple summary of Petraeus’s record, establishing his experience and commitment, and then the whole thing is framed in a simple question. Both 9-11 and defense images are invoked, which are considered Giuliani’s strengths.

What jumps out re design? Note how the page is broken evenly into a top and bottom half, both of which contain about an equal amount of information. The type face is big enough so that you can easily read it should the image be reproduced, and the whole thing can be read quickly.

In summary, the ad doesn’t make you guess what its messages are.

Comparatively, the MoveOn ad uses up a tremendous amount of space showing a picture of Petraeus which does not convey an image of mistrust. MoveOn’s text is all the same size so it makes you judge which sentence contains the important punch-line. It takes too long to read. It requires a nuanced understanding, in a world where nuances are a luxury.

This is exactly the same pattern that I observed during the 2004 presidential campaign. Bush’s messages were simple and focused and Kerry’s messages were complex and intertwined. Marketing 101 tells you which is more effective.

Companies typically try to acquire the kind of customers that are immediately profitable, or show the most potential for long term value. Ruth Bolton, Michael Hutt and Beth Walker -- marketing researchers at the W. P. Carey School of Business -- have learned that companies would be wise to apply portfolio theory in their quest for customers. Firms that identify the risk-return characteristics of all of their potential customers, then build a "customer portfolio" that can reap returns in both good times and bad, are shielded against tough times in the marketplace.

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With consumers increasingly comfortable with interactive technologies such as online social networks, high-speed connections and new media tools, it's now easier than ever for marketers to connect with their customers. It is also easier than ever for consumers to ignore brand messages. But while consumers may be fed up with one-way messages and annoying interruptions, they are willing to be entertained and engaged, and may choose to participate in an experience that communicates the brand's message. This new approach to marketing was the subject of a presentation at the recent American Marketing Association Consortium, hosted by the W. P. Carey School of Business.

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Mark Barratt wants to see Tesco succeed in America. The British expatriate and assistant professor of supply chain management at the W. P. Carey School and his wife have lived in the U.S. for five years, and they still haven't found a one-store replacement for the U.K.'s monster chain. Tesco's five-year, $2 billion commitment to the U.S. is beginning with the opening of 58 stores in California, 31 in Arizona and 13 in Las Vegas, bringing a taste of what's made it the world's third-largest retailer.

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People who work in service positions -- police officers, hair stylists, dentists, real estate agents -- are aware that they are on stage, playing a role, while on the job. Playing a role involves knowing when and how that role's being played, and setting some boundaries between you and your clients or customers. In a recent study published in Group & Organization Management, Blake E. Ashforth, management professor at the W. P. Carey School of Business, and his co-authors interviewed 105 different "service agents" about the ways in which they manage the line between who they "really are" and their working role.

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The supermarket sample is a familiar ploy, but those tasty bites appear to have more impact than marketers imagined. New research from W. P. Carey marketing Professor Stephen Nowlis shows that customers who sample something pleasant subsequently desire more -- more of anything good -- than those who did not have the treat. Conversely, customers who are exposed to something unappealing end up wanting less. The study has broad implications for retailers.

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The Internet has revolutionized ticket scalping, turning it into an electronic extension of the box office, driven by sleek advances in computer hardware and software and by a spate of clever, aggressive online ticketing companies. Experts at the W. P. Carey School of Business discuss the transformation of the secondary ticket market from a seedy, backstreet operation to a sophisticated white-collar trade.

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Soon, innovation in China will take the form of a move from a primarily manufacturing economy to a more service-oriented one, according to experts gathered at the Fourth Annual Executive Forum in Shanghai. The forum is part of graduation exercises for the W. P. Carey MBA Shanghai, an executive MBA program delivered by the W. P. Carey School of Business and the Shanghai National Accounting Institute.

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Anyone with Internet access these days can reach the world thanks to "free media." Now marketers are seeing the brand-building possibilities in free media. Those that are apparently successful -- such as the Dove beauty brand's campaign -- have been able to enlist the public and the traditional media in helping a brand image grow.

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When people make predictions about certain events, their enjoyment in watching those events decreases, according to a recent study by W. P. Carey School marketing professors Naomi Mandel and Stephen Nowlis. This is likely the result of "anticipated regret" -- the fear that they may be proven wrong. In fact, the anxiety caused by the concern that one might lose may be more powerful than the sting of actually losing.

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As companies shift from product to services focus, they face the challenge of a larger, more dynamic and more diverse customer base. Some are turning to universities for assistance from academics to find ways to improve operations or customer relations. It's a mutually beneficial relationship: professors and graduate students get first-hand access to business realities while companies receive data that can translate to new, innovative strategies. Recently top executives met with a group of marketing academics at the 42nd American Marketing Association Sheth Foundation Doctoral Consortium hosted by the W. P. Carey School of Business.

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