KEYNESIAN BEAUTY CONTESTS, REVERSE POP IDOL, AND ONLINE VOTING COMPETITIONS

When thinking about incentivizing online participation its rare that the name of John Maynard Keynes, the Economist, is raised in conversation alongside that of Simon Cowell of American Idol and X-Factor fame. Simon Cowell wasn't the first to do it, but he has taken the idea of a popular vote in a talent contest to a new level, and with the assistance of his panel, who act as 'advisor' to the voters, he has devised a winning formula.

However, this approach does not always work for all those involved. In the UK recently, Strictly Come Dancing, a TV dance contest, created huge public controversy because the panel wanted a political reporter (pictured above) with two-left feet voted out, whilst a sympathetic voting public wanted him to stay in.

This advisory panel plus popular vote model doesn't always work on TV, and presents serious problems for online. People cheat online and it is not always the best entrants that win. As social participation becomes more important the mechanics by which these games are governed becomes more importanat. Site's such as Digg have had to change because of the wrong mechanics:

It has been reported that the top 100 Digg users controlled 56% of Digg's frontpage content, and that a niche group of just twenty individuals had submitted 25% of the frontpage content. A few sites have raised the problem of groupthink and the possibility that the site is being "manipulated", so to speak. In response to this question, the site's founder Kevin Rose has announced an upcoming change to the site's algorithm.

I am recommending two other models now, rather than just a 'Pop Idol' model for online voting contests.

These models are:

1. The Reverse Pop Idol - Where the public vote on their favourites - acting as a type of advisory panel - and then the judges choose from the candidates with the highest votes

2. Keynesian Beauty Contest - developed by John Maynard Keynes, Wikipedia describes this as a concept, where in a fictional newspaper contest, each entrant is asked to choose a set of six faces from photographs of women that were the "most beautiful". Those who picked the most popular face are then eligible for a prize. In my version of the beauty contest, if you vote for the same faces as the judges finally do then you win. I think this model reduces the chances of cheating on one level (through fake accounts and multiple voting), creates more community through anticipating and studying everyone else's voting patterns, and it makes it a more unpredictable game because the judge's choice needs to be guessed at as well.

Keynes (pictured above) said “It is not a case of choosing those [faces] which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practise the fourth, fifth and higher degrees.” (Keynes, General Theory of Employment Interest and Money, 1936).

"Keynes believed that similar behavior was at work within the stock market. This would have people pricing shares not based on what they thought their fundamental value was, but rather based on what they think everyone else thinks their value was, or what everybody else would predict the average assessment of value was."

For me Keynes is talking about a mechanism that establishes the wisdom of the crowds. In my last post, I said that 'process is more important than proposition', which is why in addition to thinking about message, and medium as classically done, we now also need to think about the process, or what I'd call the modus by which we organise participation. This type of thinking has typically been the preserve of game theorists, but now its another issue digital agencies will need to take on board.

MESSAGE, MEDIUM, MODUS AND HOW PROCESS IS MORE IMPORTANT THAN PROPOSITION IN THE DIFFUSION OF INNOVATION

There are lots of smart people out there agonising about how to make their idea viral and get it spreading out across the web. Whether they are in music, advertising, software or anything else that can spread across the web, they are thinking about this problem, and most are focusing on the proposition or the idea. Ideas are what reach a critical mass, create a dominate standard, become a web phenomena, a hit record, or a underground movie sensation. To say good ideas always trump bad ideas is generally true, but in reality its not always the best proposition that wins.

Betamax was an superior proposition to VHS but VHS still won. Dairy Milk had a superior ad campaign to Galaxy but it still lost market share (see post). The Backstreet Boys are a crap band but they still top the charts. The truth is that process is more important than proposition in a market that is made opaque by the subjective interpretation of ideas. If you get your marketing machine performing more effectively you win. That was the lesson from Betamax vs VHS.

We know from decades of studies that the diffusion of innovation is key in all of this, as shown below.

Each step in the diffusion of innovation requires its own process if it is to be successfully crossed. This means creating an experience that not only has a contagious proposition at its heart, but also has contagious processes built into it, such as: send to a friend, social bookmarking, social networks, and incentives that reward recommendation or as Seth Godin says Sneezing that infects the rest of the hive. Betamax lost because people didn't sneeze enough when they bought the product. It never developed network effects, which is a form of power you get from increasing the number of people in your network (see Metcalfe's Law).

This is why in addition to thinking about message, and medium as classically done, we now also need to think about the process, or what I'd call the modus.