Yesterday, Fast Company published an article that qualified what so many of us have been confident is true for a long time. Social media are capable of predicting consumer behavior.
As Cliff Kuang reports: “We’ve all got the vague intuition that Twitter allows you track, in real-time, what people are concerned about or obsessed with. But this is a little freaky: Two researchers at HP Labs, Sitaram Asur and Bernardo Huberman, have discovered that you can actually use Twitter mentions to predict how well a movie will do in it’s first couple weekends of release. What’s more, the method works even better than the most accurate method currently in use, the Hollywood Stock Exchange (HSX).”
He goes on to detail how two HP Labs researchers monitored literally millions of tweets surrouding major releases like Avatar, paying particualrly close attention to the volume of tweets as the release date neared, as well as the ration of postive to negative tweets following the movie’s release. Predicting weekend box office totals with 97.3% accuracy – versus the 96.5% accuracy of the industry standard Hollywood Stock Exchange – these researchers proved once more that online sentiment holds incredible business potential for those companies looking to track trends ands capitalize on behavior.
At the end of his piece, Cliff Kuang wonders: “Why not use Twitter to forecast results for sales of products, video games, and everything else?” A terrific question. Why not? Authors – what’s the pulse of your latest book? Pharmaceutical executives – how is that latest drug being received in the market? Realtors – are people recommending you to their neighbors? Papa John – how are people responding to the new pepperoni?
What’s very exciting about this development is that it demostrates a clear method by which business owners and marketers can move beyond measuring “person-who” phenomena on social netowrks – harboring on individual messages – and can now monitor comprehensive trends, in real-time. With that kind of data and feedback, businesses can be far more nimble and make adjustments on the fly with less fear of consumer repercussions as those adjutments were predicated on instantaneous (realtively speaking) feedback.
Welcome to the world of perpetually evolving (and improving) commerce.
Sidenote: Not surprisingly, I was turned on to this article through a tweet from Pete Wylie, who in turn found in the Tweet stream of IBM’s Eric Andersen (http://ericandersen.posterous.com/ / @eric_andersen).
