Page 1

A marketing tool for today’s changed world


Briefly

Prediction Markets are a means of aggregating crowd in order to predict an outcome

the inherent wisdom of the

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 2


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 3


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 • A l prediction Apply di ti market k t algorithm l ith tto weight i ht the th responses

Page 4


Simply what you need to know Will it work?

Why?? Wh Why not?

Page 5


Three core questions 1.

2.

If we asked 100 people like yourself whether this campaign would make them want to buy BRAND X, how many would say “YES!”

Now, how much of your $would you bet that your answer above is right? You only have $100 to bet between the two options?

3.

Page 6

You estimated that more people would be convinced to buy [Product} by watching ‘AD D’ …. Why did you think this?


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 7


Prediction market difference Traditional Quant Study

proteanprediction Focused on what people

think other people would say, not

Remove Bias

Subjective personal opinions

Engage respondents

Respondents rewarded for completing the survey, not honesty or accuracy

Based on respondents’ holistic thinking

Deconstructs evaluation into rational bites, eliminating “irrational� thinking

their narrow personal biases

People are better at predicting the behaviour of others than their own behaviour

Page 8

Respondents are rewarded for

thinking about the question and being right! Encourage irrational component of forming judgments and making decisions


Prediction market difference A more nuanced outcome

L ki att th Looking the results lt off this thi actual study, the deeper nuance of ProteanPrediction can be clearly seen.

Comparison ProteanPrediction vs. Average Responses 

Using the average value for each statement (Red) would have lead to a conclusion that Statement D was far and away the best idea.

29.2% Statement D:

33.4% 29% 26.8%

Statement C: Statement C

Market Result

24.0% 24 0% 20% 16.7%

Statement B:

Average

14.5% 13% 14.8%

Statement E:

16.9%

Average of  "favourite "  concepts

13% 12.5% Statement A: 

13.9% 21%

0 0% 0.0%

15 0% 15.0%

30 0% 30.0%

Page 9

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”


Visual analysis of open ended question Comments about Statement A Total sample

Page 10


Scientifically Validated


Widely used

• •

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 GM’ etc. etc

Page 12


Accurate predictions 1.

In a study of prediction markets versus traditional research, professors at Northwestern University found f that prediction markets were closer to the outcome off 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  GM f t (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

24.0

29.3

prediction markets (7  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

152,000

http://www crowdclarity com/learnmore htm http://www.crowdclarity.com/learnmore.htm

Page 13


The science

These two academic papers give an interesting overview into some of the  academic thinking behind the theory of prediction markets. 

Additional Links http://www.youtube.com/watch?v=keVL0PkCpaQ&eurl=http%3A%2F%2Fwww%2Econsensuspoint%2Ecom%2Fpredicti p y p p p p on%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 example http://www.hsx.com/ This is the link to the Hollywood Stock Exchange 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.

Page 14


For more information call Laurence Bernstein 416 967-3337 x 101

bernstein@proteanstrategies.com www.proteanstrategies.com

Protean Prediction Evaluation System  

The power of prediction markets can be applied to consumer research. This e-brochure introduces one of the very few successful methodologies...

Read more
Read more
Similar to
Popular now
Just for you