The usual practice in the market research world is to target an elite few when testing products and/or concepts. Now, online survey company Infosurv and BrainJuicer, in the U.K., are turning that adage on its head. Based on the book, The Wisdom of Crowds, by James Surowiecki, the new thinking banks on the premise that large groups of people are wiser than an elite few.
Thus, Infosurv president Jared Heyman came up with the Infosurve Concept Exchange (iCE), an online stock market where a large group of respondents—using virtual dollars—can buy “shares” in companies products, packages and ads. “In the case of PR, it can be taglines, headlines or logos,” says Heyman. By tracking how share prices move up or down over time, PR executives can make accurate predictions on future successes.
Better known as “prediction markets,” Heyman says they are not widely used in marketing and PR, but the benefits listed below may attract takers in the near future:
• Cost: Less expensive than surveys because of lower cost per head.
• Speed: One week instead of 4-6 weeks for a normal concept test.
• Accuracy: Prediction markets have proven to be more accurate than surveys, polls or individual experts.
• Better responses: Market “traders” can earn extra incentives by betting on correct outcomes, and therefore stay engaged. See Trend and Topical Surveys story for more.