Embed Size (px)
DESCRIPTION
An entirely new approach to market research
Citation preview
A marketing tool for today’s changed world
Page 2
Briefly
Prediction Markets are a means of aggregating the inherent wisdom of the crowd in order to predict an outcome
Prediction Market theory applied to consumer research is a powerful, technique that enables marketers to evaluate ideas quickly, effectively and reliably
proteanprediction Collective Wisdom Engine is a simplified, streamlined research methodology based on prediction market theory
Page 3
A marketing tool for today’s changed world
Enables marketers to harness consumer opinions once or at multiple points during the project development
Talks to consumers at the speed they are used to
Allows marketers to benefit from consumers’ marketing savvy
Gives consumers a respite from research complexity by offering them simple ways to make their opinions known and express them in their own language
Page 4
The underlying premise
2 Simple yet profound tenets• Ask what they think other people would do, not what they personally
would do• Reward them for getting it right
1 Complex and profound tenet• Apply prediction market algorithm to weight the responses
Page 5
Simply what you need to know
Why?Why not?
Will it work?
Page 6
Three core questions If we asked 100 people like yourself whether this campaign would make them want to buy BRAND X, how many would say “YES!”
1.
Now, how much of your $ would you bet that your answer above is right? You only have $100 to bet between the two options?
2.
You estimated that more people would be convinced to buy [Product} by watching ‘AD D’ …. Why did you think this?
3.
Page 7
Plus: tailored to the needs of every project
Questions Demographic and behavioral screening questions Pre-exposure brand and competitive awareness and preference Post exposure preference Full range of diagnostic testing
Sample Customer lists, hand raisers, brand enthusiasts On-line panel Any other source
Page 8
Prediction market difference
Traditional Quant Study proteanprediction
Remove Bias Subjective personal opinions
Focused on what people think other people would say, not their narrow personal biasesPeople are better at predicting the behaviour of others than their own behaviour
Engage respondents
Respondents rewarded for completing the survey, not honesty or accuracy
Respondents are rewarded for thinking about the question and being right!
Based on respondents’ holistic thinking
Deconstructs evaluation into rational bites, eliminating “irrational” thinking
Encourage irrational component of forming judgments and making decisions
Page 9
Prediction market differenceA more nuanced outcome
Statement D:
Statement C:
Statement B:
Statement E:
Statement A:
0.0% 15.0% 30.0%
29.2%
26.8%
16.7%
14.8%
12.5%
33.4%
24.0%
14.5%
16.9%
13.9%
29%
20%
13%
13%
21%
Comparison ProteanPredictionvs. Average Responses
Average of "favourite " concepts
Average
Market Result
Looking at the results of this actual study, the deeper nuance of ProteanPrediction can be clearly seen.
Using the average value for each statement (Red) would have lead to a conclusion that Statement D was far and away the best idea.
Using the percentage of the sample that selected each statement as their “favorite,” (Green) dampens “D” ‘s lead, but changes the picture for the number two position – “A” is now equal to “C”
In the ProteanPrediction (Blue) result, the difference between the lead and second closes significantly, indicating that the market place has very nearly as much “heart” for “C” as they do for “D”
Page 10
Visual analysis of open ended question
Comments about Statement ATotal sample
Scientifically Validated
Page 12
• Iowa Electronic Markets: political predictions more accurate than the most accurate polls at least 75% of the time
• Hollywood Markets: Predict box office receipts• Used by: Google, Hewlett Packard, Wrigley (Global); Kraft; GE; Microsoft;
Intercontinental Hotels Group; GM’ etc.
Widely used
Page 13
Accurate predictions1. In a study of prediction markets versus traditional research, professors at
Northwestern University found that prediction markets were closer to the outcome of US Presidential elections 74% of the time compared to traditional polling (using 964 polls covering the period 1988 to 2004)
http://www.northwestern.edu/ipr/news/predictionmarkets.pdf
2. GM Car sales, November 2008
Forecast Actual Variance %Chevy Cars
Light trucks
Chevy Cars
Light trucks
Chevy Cars
Light trucks
GM forecast (beginning of month) 150,000 250,000 95,000 152,000 36.7 39.2
Edmonds estimate of sales (end of month) 125,000 215,000 95,000 152,000 24.0 29.3
prediction markets (7 days into the month) 97,000 160,000 95,000 152,000 2.1 5.0
prediction markets (end of month) 107,000 180,000 95,000 152,000 11.2 15.6
http://www.crowdclarity.com/learnmore.htm
Page 14
The science
http://www.youtube.com/watch?v=keVL0PkCpaQ&eurl=http%3A%2F%2Fwww%2Econsensuspoint%2Ecom%2Fprediction%2Dmarkets%2Dblog%2F&feature=player_embedded This link connects you to a video of the CEO of Best Buy talking about their use of Prediction Markets. Given their recent business collapse, I am not sure they are necessarily the best examplehttp://www.hsx.com/ This is the link to the Hollywood Stock Exchange, which is probably the most famous prediction market site – it has become an extremely important tool for movie producers to judge the potential of their future movies before they make them.http://www.pbs.org/wgbh/nova/sciencenow/0301/04.html This is the most fun of all of them – PBS video that makes it all clear.
Additional Links
These two academic papers give an interesting overview into some of the academic thinking behind the theory of prediction markets.
For more informationcall Laurence Bernstein 416 967-3337 x [email protected]
