Friday, 4 December 2009

ONLINE VOTING CONTESTS AND MECHANISM DESIGN IN SOCIAL MEDIA


In the UK talent contest - X-Factor - the twins pictured above did spectacularly well despite their lack of talent. Jedward as they became known were voted through week after week by the public even though the panel of experts headed by Simon Cowell implored the public to vote them out. Punk legend Johny Rotten even got involved saying "They're just lazily untalented. It's not fair, it's not right and a perfectly good singer gets voted off while that dopiness gets promoted. How is that singing?”

The Jedward Problem is an example of mechanism design gone wrong. Lots of what we do in social media involves promotions, competitions, games, and other forms of mechanism design. Purists dislike using these techniques. They see them as downmarket, and a form of attention cheat. They say brands should invest in long-term brand building, and application development. They are of course right when you view this issue from within the social hive, but in the broader world of business there is no more complex set of challenges than those in mechanism design. The 2007 Nobel Prize for Economics was awarded to Leonid Hurwicz, Eric Maskin, and Roger Myerson "for having laid the foundations of mechanism design theory". It's complex stuff. Let me explain with the help of Wikipedia.

The distinguishing features of these games are:
  • that a game "designer" chooses the game structure rather than inheriting one
  • that the designer is interested in the game's outcome
The designer of a mechanism generally hopes either
  • to design a mechanism that "implements" a social choice function (e.g. high bid, low bid, no bid, or cheat)
  • to find the mechanism that maximizes some value criterion (e.g. profit)
Hurwicz, and many others have used complex maths to analyse everything from elections, to financial markets, and this thinking is at the heart of the Google AdWords auction system. Bloomberg quoted Hal Varian, chief economist at Google as saying "We are one of the most active users of mechanistic design,''. In the auctions, advertisers place bids to have their messages displayed on search result pages, but their final positions in the auction are not calculated purely on price, but also on what Google calls a quality score. Improving quality scores is a type of game. Deciding an advertisers position in search results is a mechanism design problem.

These games, incentives, and mechanisms are all over the web. In a previous post I wrote about Keynes' idea of the beauty contest and I have also previously written about what I call message, medium, and modus. For me, modus - the mechanism design you choose for your idea - is frequently more important than the creative proposition in the diffusion of your idea. If you can engineer the mechanism to be social and contagious then you can achieve your goals. But beware of online voting cheats, fake email addresses, and many other devices.

This approach basically means you can use other people's social ties to propagate your ideas. The strength of their social ties, their trust relationships, and their influence becomes the fuel that drives your campaign. Jedward have been voted off X-factor, but now they are free I'm sure they will be willing to share their knowledge of mechanism design.

4 comments:

Lennard said...

Hi Tony,
I am actually looking into this phenomenon for my dissertation and have a few thoughts of my own:
I believe that these “games” are the future. People will “abuse” more and more websites and turn them into games, as they get bored of what they are being fed - similar to cultural jamming. I see it like a quite revolution. But I don’t think that this has to be seen in a negative light. If a websites is aware that it will be “abused” and can facilitate these users, maybe even somehow encourage the user to play with the site in other ways than was primarily intended, the site owner will have higher stats and maybe even higher sales. Therefore, I don’t think that the Jedward incident was much of a problem for ITV or Simon Cowell, they still made a lot of money from people wanting to “game the system”. It is the same with the new game of “making killing in the Name of by Rage against the Machine number one this Christmas”. This again, like the Jedward example, is a game built on the dislike of something, i.e. the dislike for the X-Factor. Turning this dislike into positive association with the website and brand I think is key, where marketers can make use of these people.
An example of a positive game is the Wikipedia game - http://www.youtube.com/watch?v=fEbQ8Zk2Yb8 – a simple idea, a bit silly perhaps but people are engaging with the content, as they have to read or at least skim through it. The traffic is kept on Wikipedia’s page and people will spread the word by word of mouth or, in this case, youtube.
In my dissertation I am looking at Facebook and its German comparison StudiVZ. Both sites are being played with – Facebook stalking – and I want to have a look at how people achieve a state of Flow through playing these games. I also want to compare the two sites as well as either Ebay or Amazon and see if there is a difference in the German audience and English audience.

Tony Effik said...

Lennard, good to hear from you. Hope studies are going well. The wikipedia game sounds cool. I'll check it out. I'd also love to read your dissertation, as I'm sure Ville would as well.

Games and mechanism design have always been important. Mastering them will be a key business skill for online srategy.

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