The Death of the Hit: How the Long Tail Affects the Mass Media of News, pt. 3

I think these organizations can begin to expand their business models to incorporate the long tail by taking into account the following:

The Democratization of News

            One of the key factors of the long tail is the democratization of the tools of production and distribution.  In no field is this more prevalent than in the field of journalism.

            The tools of production for writing have always been widely available.  The Internet and search engines make distributing and finding that writing a cinch for anyone who wishes to.  Indeed, blogs have become a major source of news.

            In a New York Times book review, Richard Posner writes on the impact of blogs:

Bloggers can specialize in particular topics to an extent that few journalists employed by media companies can, since the more that journalists specialized, the more of them the company would have to hire in order to be able to cover all bases. A newspaper will not hire a journalist for his knowledge of old typewriters, but plenty of people in the blogosphere have that esoteric knowledge, and it was they who brought down Dan Rather.

What really sticks in the craw of conventional journalists is that although individual blogs have no warrant of accuracy, the blogosphere as a whole has a better error-correction machinery than the conventional media do. The rapidity with which vast masses of information are pooled and sifted leaves the conventional media in the dust.  Not only are there millions of blogs, and thousands of bloggers who specialize, but, what is more, readers post comments that augment the blogs, and the information in those comments, as in the blogs themselves, zips around blogland at the speed of electronic transmission.

The blogosphere has more checks and balances than the conventional media; only they are different. The model is Friedrich Hayek’s classic analysis of how the economic market pools enormous quantities of information efficiently despite its decentralized character, its lack of a master coordinator or regulator, and the very limited knowledge possessed by each of its participants. In effect, the blogsphere is a collective enterprise—not 12 million separate enterprises, but one enterprise with 12 million reporters, feature writers and editorialists, yet with almost no costs.  It’s as if The Associated Press or Reuters had millions of reporters many of them experts, all working with no salary for free newspapers that carried no advertising.

What the long tail has taught us is that there is an audience for every topic.  Search engines and technologies like RSS and Digg provide aggregation for all these topics.  Non-professionals keeping blogs provide this kind of content.  This represents an exciting time for people who want to write about their passions but who, without the Web, would not have a platform for their writing: the Apple geek who likes to blog about his iPhone, the fashionista who daily comes up with a new way to wear her Hermes scarves, the stay-at-home mom who wants to share organizational tips with her friends.

Having experts writing on every topic imaginable is a dream-come-true for seekers of niche news, especially when all this information is made widely available and accessible through search engines.  But it’s a hard system for newspapers to compete with.  The question is, should they try to?

In markets where the long tail has had time to play out more fully, such as in the music industry, major producers have steadily lost momentum and found themselves fighting with niche aggregators.  I think these producers should spend less time fighting the long tail and more time coming up with strategies to embrace it.

In a long tail world, the main economic benefits fall to aggregators.  Breaking news and international news will most likely stay in the head of the long tail market and in those areas, there will still be a place for major media organizations.  But for organizations that want to stay ahead of the curve, finding a way to nichify their work and aggregate the news niches available online could prove to be the future of mass media organizations.

Writing Style

            When considering the impact of demassification, it’s important to examine its effect on writing.  The traditional techniques of news writing no longer fit into a long tail world.  The long tail, by definition, allows and encourages people to be pickier in their selection of media and other products.  Upcoming generations have an increasingly short attention span.

For that reason, I think the majority of news that will be read online should be concise, relevant and interactive. It should also be focused and niche-based.

There is still a place for longer pieces of journalism.  That place, though, will no longer be found in the world of everyday reporting.  Instead, longer writing will need to analyze the news and apply it to readers — and that application will be even more effective if it focuses on readers within a niche.

The “What’s in it for me?” Factor

            The world of the long tail is all about the individual, as opposed to the masses.  For news organizations and journalists in particular, this means that when writing anything, awareness of the audience is even more important than ever before.

            I call this the “What’s in it for me?” factor.  As the demand curve of the long tail flattens and the head becomes less defined, people will grow increasingly more used to the idea of having things tailored for them.  As I mentioned before, certain types of news will always remain in the head.  But even breaking news will eventually grow into stories that are analyzed and presented for specific niche audiences.

            This is where I think upcoming generations who have traditionally been less interested in mass news than previous generations will be pulled back into the world of news.  News organizations need to learn to present stories in a way that readers in every niche find out what’s in it for them.

            But getting down to the nitty-gritty for so many niche groups can’t possibly be accomplished by a single news sources, or even several news sources if they keep their focus on appealing to the masses.  I see the future of news as having one main source of breaking news, like The Associated Press, and thousands of niche Web sites and publications.

            Already the print media has embraced the long tail in the world of magazines.  Magazines are largely niche publications that survive, not because they have huge readership, but because their advertising is more niche (and thus, more effective) and because they meet the needs of specific groups of people (which is how Idaho Potato Growers Magazine is a thriving publication.)

            In short, I think the long tail is here to stay, and the ever-elusive business model print news organizations are seeking can be found somewhere in that tail.  There may no longer be the news stars of yesterday, but there will still be a head for the masses and moving down the tail represents more effective news coverage for more people. 

The Death of the Hit: How the Long Tail Affects the Mass Media of News, pt. 2

From the music model of the long tail, we gather some important pieces to the long tail puzzle:

1.     There are far more niche goods than there are hits.

2.     The cost of discovering niche products is easier than ever because of search technologies and digital distribution.

3.     Filters like recommendations and rankings drive demand down the tail as they make it possible for consumers to find what they are looking for.

4.     With demand being driven down the long tail, the demand curve itself flattens. While there will still be hits and niches, hits will be relatively less popular and niches relatively more so.

The availability of niches reveals what people would really want if there were no scarcity in markets.  With everything available, what do we choose?  In the words of Anderson, “A Long Tail is just culture unfiltered by economic scarcity.”

This concept is revolutionary for the world of economics, which for the most part is defined by scarcity.  It should also represent a radical shift in thought for news media organizations.

That the world of news is changing is news to no one.  The challenge for traditional news media organizations is to find a business model that can fit into the growing trend of hits and niches.

The Death of the Hit: How the Long Tail Affects the Mass Media of News, pt. 1

The following is an excerpt from Chris Anderson’s The Long Tail, written about a visit he paid to the offices of Robbie Vann-Adibe, the CEO of Ecast, to get data about technology trends. I think the passages illustrates well a key outcome of a market with long tail aggregators:

During the course of our conversation, Vann-Adibe asked me to guess what percentage of the 10,000 albums available on the jukeboxes sold at least one track per quarter.

I knew, of course, that Vann-Adibe was asking me a trick question. The normal answer would be 20 percent because of the 80/20 Rule, which experience tells us applies practically everywhere. That is: 20 percent of products account for 80 percent of sales (and usually 100 percent of profits).

But Vann-Adibe was in the digital content business, which is different. So I thought I’d go way out on a limb and venture that a whopping 50 percent of those 10,000 albums sold at least one tract a quarter.

Now, on the face of it, that’s absurdly high. Half of the top 10,000 books in a typial book superstore don’t sell once a quarter. Half of the top 10,000 CDs at Wal-Mart don’t sell once a quarter; indeed, Wal-Mart doesn’t even carry half that many CDs. It’s hard to think of any market where such a high fraction of such a large inventory sells. But my sense was that digital was different, so I took a chance on a big number.

I was, needless to say, way, way off. The answer was 98 percent.

“It’s amazing, isn’t it?” Vann-Adibe said. “Everyone gets that wrong.” Even he had been stunned: As the company added more titles to its collections, far beyond the inventory of most record stores and into the world of niches and subcultures, they continued to sell. And the more the company added, the more they sold. The demand for music beyond the hits seemed to be limitless. True, the songs didn’t sell in big numbers, but nearly all of them sold something. And because these were just bits in a database that cost nearly nothing to store and deliver, all those onesies and twosies started to add up.

The impact of the long tail is perhaps most defined in the area of music, for several reasons: first, because people love discovering new music and will always want more of it (demand); two, because music can be produced and distributed cheaply (supply); and three, because music can be listed to constantly and doesn’t need to be focused on — it’s non-disruptive. 

Because music can be stored and distributed purely from a digital format, it demonstrates the long tail perfectly without needing to consider other factors, like limited supply or difficulty of distribution.

The Future of the Journalism Profession

The future of the journalism profession, from my point of view, is in niching. In his book The Long Tail, Chris Anderson discusses a phenomena of economics. Traditionally, economics has dictated that supply should be determined by demand: whatever the audiences want is what the producers will give them. This is the idea behind “hits”: finding those books, CDs, DVDs, radio songs, etc. that will sell the most and cover the cost of keeping them in a bookstore, or a record store, or on the radio. This means that there are millions of songs played, movies produced, and books written that will never see representation in national bookstores or record stores, meaning they will largely go without audiences.

But with the Internet came an interesting departure from this idea: when production and storage costs are close to zero, what happens to these “nonhits”?

Data from distributors like iTunes, Napster and Netflix shows that while the “hits” are still accounting for high numbers of sales, the “nonhits” are representing a surprising share of downloads or orders. At Rhapsody, 45 percent of total downloads are of songs not even available in the largest offline retail store. For Netflix and Amazon, those numbers are 25 percent and 30 percent, respectively.

What is so surprising about this trend is that demand is now following supply. Every song that Rhapsody has in its online database (an inventory of over 4 million) is finding some kind of audience, even if it is only a few people a month, somewhere in the world. Even the 100,000^th ranked track is being downloaded an average of 250 times a month.

So what does this mean for the media world?

It is sort of the principle of “If you build it, they will come,” only this time, we’re referring to Web content. It’s an uncomfortable prospect for huge media corporations, because it means that mass markets are going to be increasingly hard to find. Audiences don’t want to be “mass”; they want content that is tailored to them and they will find that in niching.

For journalists who love journalism  — uncovering stories, investigating, researching, writing, reporting — the new landscape of media is a wonderful place to be. It is not a hospitable world, to be sure. But media professionals who love what they do, who are willing to do it even if a paycheck is not a definite and who can provide quality, relevant content, even if it’s just to a niche market, will thrive online.

The reason is this: the unlimited capabilities of the Web are such that an amateur with a keyboard, or a video camera, and an internet connection has access to the very same audience that powerhouse news distributors like CNN and the New York Times have. The differences, of course, lie in audience numbers and credibility. Still, niche audiences are turning more and more toward blogs, podcasts and similar nonprofessional news outlets to get niche news and news analysis. I think the future of the media will be less about corporations and conglomerations and much more about niching and specialization.

As for advertising, I think we are going to see that huge ad revenues will be less and less necessary for smaller niche markets. Online advertising has proven to be successful, just not successful enough to keep a huge company on its feet.

Along with click-through advertising, I think it’s going to be increasingly important for companies to produce their own media. In his book The New Rules of Marketing and PR, David Meerman Scott discusses the necessity of companies generating meaningful content for audiences. Marketing is no longer disruptive; the most effective marketing campaigns now come in the form of search engine optimization, which is so successful because it means consumers are actually searching out the product. Consumers don’t have to bombard people with advertising — consumers actually want to find their products! Isn’t that something? It turns the whole world of marketing on its head!

For PR, the goal is no longer to get press releases picked up by major media outlets. The goal now is to provide meaningful content that consumers will actually want to find and to distribute content online through blogs and Web sites.

Advertising of all kinds is all about relational capital, companies building meaningful relationships with consumers.

For TV producers, the key is to be ahead of the technology curve, and that’s tough to do. But according to industry insides, like USA Today’s CyberSpeak editor Andrew Kantor, the future lies in “true on-demand television.” This means that IPTV will become the TV industry standard, where people can download any content they want and view it at any time they want.

I think this service will be revenue-producing if it is provided as a part of a package with music downloads, advertising, broadband subscriptions and the like. One thing is certain: online services cannot be provided free forever and for everyone. Even Eric E. Schmidt, the chief executive of Google, admits that the Internet wouldn’t be much without quality content for his company’s search engine to look through. But with packaging, people might be willing to paying for the services that are important to them, including social networking, movies, music, games, news and TV. 

Iran: Whatcha gonna do, Obama?

I. Background

In 1953, the U.S. government performed it’s first overthrow of a democratic foreign government in Iran. The coup was carried out by the CIA, led by agent Kermit Roosevelt. At the time, Dwight D. Eisenhower was the president of the U.S. Before him, Harry Truman had refused to join Britain in overthrowing the government, declaring that the CIA should never overthrow a foreign government.

The conflict arose when then prime minister of Iran, Mohammad Mossadegh sought to nationalize the Anglo-Iranian Oil Company so that Iran had control over where their oil was going, how much they were drilling for, etc.

The British government, which depended heavily on the oil company, didn’t like this much and looked into various ways to overthrow the popular prime minister. Finally, when Eisenhower was made president, the U.S. jumped on board and staged the coup, using coercion and manipulation to convince the Shah to sign a paper that would kick Mossadegh out of office.

After the coup was complete, the Shah was in control of Iran and he ruled as a dictator until 1979 when the Shi’i opposition rebelled against the Shah and made Ayatollah Khomeni prime minister.

II. Problem Statement

In June of 2009, Iran held another democratic election. But this time, there was trouble and his name was Mahmoud.

Mahmoud Ahmadinejad was running for his second term in office against Mir-Hossein Moussavi, a reformist who wanted to bring more Western ideals to Iran. Moussavi held much popular support, sporting the color green as the symbol of his campaign — which also happens to be the color of Islam.

Almost 80% of the Iranian population voted in the election. Despite Moussavi’s popular support, after only counting 20% of the votes, Ahmadinejad was declared the winner of the election.

Many Iranians cried foul and held protests in the street. Said a reporter for the New Yorker who was in Iran at the time of the election:

            Mohsen had been active in the Yussefabad on behalf of the local Moussavi campaign, standing on street corners and handing out leaflets. He had also run the Basiji gantlet, and had the bruises on his knees to prove it.

            “Are you sure the election was a fraud?” I asked him.

            Mohsen smiled ruefully. “Some of the boys from the campaign headquarters were at the local count, and when they came back that evening they were laughing and saying it was all over — Ahmadinejad had no chance. Then . . .” Mohsen shrugged, and his father said, “You should have seen this neighborhood. There was hardly a single Ahmadinejad poster. Only green. Only green! Of course it was a fraud. They stole the vote.”

While protests and marches began peacefully, the Iranian government soon began to disrupt. According to the same New Yorker reporter:

            If the afternoon of June 15^th was hope, the evening was despair. Seven protesters were killed during a clash with Basijis who fired on them from their barracks north of Azadi Street. Around the city, there was fighting between Basijis and pro-Moussavi demonstrators who had set fire to trash carts and buses. Drivers sounding their horns in support of Moussavi were dragged out of their cars and beaten, and the Basijis damaged and looted houses where they suspected Moussavi supporters had taken sanctuary . . .From my apartment window, in north Tehran, I watched two Basijis, unable to catch a group of fleeing Moussavi supporters, use their truncheons to smash the windshields of every car parked on our street.

            We had been wrong to be optimistic. Did the authorities mean to keep the peace at the rallies that Moussavi’s supporters had vowed to hold, every day, until the election results were annulled, and to attack people at night, after they had dispersed?

            . . . On June 19^th, after a week of steady — and peaceful — protests, and clashes after nightfall, Ayatollah Ali Khamenei, the supreme leader — the man who has the last word on all matters of state, and who is an unabashed supporter of Ahmadinejad — made it clear while addressing a large congregation at Friday prayers that the demands of Moussavi and his supporters would not be met. “The Islamic Republic state would not cheat and would not betray the vote of the people,” he said, effectively ruling out annulment of the vote. If the street protests, which he described as “not acceptable,” did no end, there was the possibility of “bloodshed and chaos.”           

As President of the U.S., Obama could order the U.S. government to enter Iran, taking over the government in an attempt to give it back to the people and restore democracy. But given America’s rock history and subsequent unpopularity in Iran, would that be a good idea?

III. Strategic Alternatives

            At this point, Obama has basically two alternatives: he can step in and do something about the faulty elections, or he can do nothing. According to Suzanne Maloney, author of Iran’s Long Reach: Iran As a Pivotal State in the Muslim World, Obama “really is up against a rock and hard place on this. He can hurt as much as he can help.”

            Government officials, political writers and public figures have expressed various opinions on each side of the issue:

            A. Step into Iran:

            John McCain has been an ardent supporter of stepping into Iran. Several days after the election, he sent the following Twitter message to his followers: “Mass peaceful demonstrations in Iran today, let’s support them & stand up for democracy & freedom! President & his Admin should do the same.”

Daniel Senor, a foreign policy adviser in the Bush administration, said Obama should “speak more forcefully for democracy.” He pointed out that Iran is already accusing the U.S. of interference and would continue to do so no matter what course of action Obama took.

            B. Stay out of it:

Sen. John Kerry of Massachusetts, defended Obama’s decision not to take action in an editorial for The New York Times. Kerry wrote that if Obama were to take an aggressive approach, it would signal to Iranians that the U.S. supports Moussavi. He said, “we have to understand how our words can be manipulated and used against us to strengthen the clerical establishment.”

Fariborz Ghadar, a vice minister for the Shah of Iran in the 1970s, stated that if Obama were to say anything, Iran’s rulers would peg the U.S. as “the Great Satan.” He also said that “we don’t even know who’s on whose side” in the Iranian government, and that, “speaking out right now would be counterproductive.”

IV. Recommended Course of Action

            President Obama has said that while he is troubled by violence against protesters in Tehran, it is up to Iranians to settle the election dispute themselves. I couldn’t agree more.

            Given the unpopular presence of the U.S. in the Middle East to begin with, any aggressive action by the U.S. government could be taken by Iranians in any number of ways. Moussavi supporters have not indicated that they wish to be assisted by foreign goverments in any way. Were the U.S. to take over in this situation, it would cut the legs out from under Iranian democracy and give the Iranian government a larger platform on which to hold up anti-Western ideals.

            The irony of setting up a democracy for another country is that said country is probably not ready for a democracy if they can’t establish it for themselves. If what we are promoting is a government “by the people,” then we should allow the people to take control for themselves, not do it for them. Were we to invade Iran and force their government to comply with what Moussavi supporters want, the infrastructure of the country could probably not support such a radical move.

            It all comes back to the “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime” principle. The U.S. cannot continue to hand fish out in the international scene. We can express our support for democracy in Iran and democracy in general. Probably the best way to promote democracy in the Middle East and throughout the world is by getting it right ourselves and showing by example what a democracy can do. Our founding fathers were able to stand up for themselves and buck off the tyranny of Mother England; why can’t we let the Iranian people do the same to their oppressive government?

Media Analysis

Officially becoming obsessed with the world of media analysis.  Today read an entire Claritas report on its PRIZM market segmentation just for fun.  Concerned about the new heights of my nerdiness.

American Airlines vs...

I've been reading up a bit about American Airlines lately, mostly because they seem to be a brand that, while getting right all the pieces of social marketing, have yet to make their brand "cool."

The face of business, and particularly businesses that have close contact with costumers, is changing. Public opinion is widespread on the Internet through blogs and social networks, and companies no longer have the benefit of controlling what is being said, and spread, about them.

This means that it is crucial for companies now, more than ever, to listen to what is being said. Because public opinion of American Airlines is so low, this should be a primary focus of the public relations component of the company. 

American Airlines is competing with several airlines who have made a name for themselves as being “hip” or “fun” — namely, JetBlue and Southwest Airlines.

These two companies, while very different, hold several lessons that I believe American Airlines should incorporate into its company strategy.

A. JetBlue

JetBlue has made a name for itself as a hip airline. It maintains a notable Web presence. It has challenged traditional ideas about an airline business model by taking creative measures to cut costs. It also puts a high value on customer service and has home-based operators that field all of its calls. People appreciate being able to talk to a real person and this builds brand loyalty. JetBlue can continue to keep its costs low because so many of the people taking calls are based out of their own homes.

            B. Southwest

Southwest Airlines is described as a “maverick” company in the book Mavericks at Work by William C. Taylor and Polly LaBarre. The company’s founder and CEO decided in the beginning of the company’s formation that the goal of the airline was to be “the lowest-cost airline in the business.” From that main goal (which Southwest makes its employees very aware of from the beginning), everybody who works at the company is able to make good decisions that are in keeping with the company’s main focus. If something doesn’t help keep Southwest the lowest- cost airline in the business, than it shouldn’t be done.

Following its goal of being low-cost comes the goal of being fun. This is an actual, established motto of the company, and Southwest’s employees are known for their humor and helpfulness. 

Innovation Diffusion: Early Adopters and the Spread of Technology, pt. 6

Once we get a better grasp on how diffusion theory and market segmentation research can aide the marketing of innovations, we can take our information even further to predict which technologies are most likely to gain mainstream popularity.  In order to do this, we simply need to take a look at what technologies, in this case online technologies, have already been adopted by the Early Adopters.

Hitwise data shows that two of the Early Adopter segments, Bohemian Mix and Young Digerati are more likely than the average Internet user to use Orkut, Google’s social network.  All three Early Adopter groups are trying out online video sites other than YouTube, like Veoh and Wikimedia Commons.  According to Click, “this group is particularly interested in trying webcam-based social network services such as Stickam.com and Webcamnow.com.  Finally, we also know that this group is on the forefront of the integration of interactive entertainment and the Internet, visiting sites like Yahoo!’s Bix service, which combine social networking and consumer-generated videos with online talent contests.”

While prediction from data analysis is an imprecise science, the overrepresentation of Early Adopters for these Web sites shows that they are more likely than other Web 2.0 sites to achieve mainstream adoption.

Answers to the questions surrounding what makes an innovation spread have always been hazy.  But by examining Internet usage data and market segments, we can get a glimpse into what makes an innovation take the leap from obscurity to popularity.

Innovation Diffusion: Early Adopters and the Spread of Technology, pt. 5

Those in the Bohemian Mix segment belong to a larger group known as the Urban Uptown, as do the other Early Adopters, Money and Brains and Young Digerati.  Those in the group represent “the nation’s wealthiest urban consumers”, according to Claritas.  Members of this group are usually upper or middle class, college educated, ethnically diverse and diverse in terms of housing styles and family sizes.  As consumers, Urban Uptowners “frequent the arts, shop at exclusive retailers, drive luxury imports, travel abroad and spend heavily on computer and wireless technology.”

Claritas also gives the following information about Early Adopter segments:

Young Digerati — Young Digerati are the nation’s tech-savvy singles and couples living in fashionable neighborhoods on the urban fringe.  Affluent, highly educated and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars — from juice to coffee to microbrew.

Money and Brains — The residents of Money and Brains seem to have it all: high incomes, advanced degrees and sophisticated tastes to match their credentials.  Many of these city-dwellers — predominantly white with a high concentration of Asian Americans — are married couples with few children who live in fashionable homes on small, manicured lots.

Bohemian Mix — A collection of young, mobile urbanites, Bohemian Mix represents the nation’s most liberal lifestyles. Its residents are a progressive mix of young singles and couples, students and professionals, Hispanics, Asians, African-Americans and whites.  In their funky row houses and apartments, Bohemian Mixers are the early adopters who are quick to check out the latest movie, nightclub, laptop and microbrew.

One of the interesting details about all three of these psychographics is that they are each heavily influenced by other people within the same group.  In The Tipping Point, Malcolm Gladwell points out the similarities between innovation diffusion and the spread of disease.  After writing the book, Gladwell said the following regarding these similarities:

“Once you start to understand this pattern you start to see it everywhere.  I’m convinced that ideas and behaviors and new products move through a population very much like a disease does.  This isn’t just a metaphor, in other words.  I’m talking about a very literal analogy.  One chapter, for example, deals with the very strange epidemic of teenage suicide in the South Pacific islands of Micronesia.  In the 1970s and 1980s, Micronesia had teen suicide rates ten times higher than anywhere else in the world. Teenagers were literally being infected with the suicide bug, and one after another they were killing themselves in exactly the same way under exactly the same circumstances…Behavior can be transmitted from one person to another as easily as the flue or the measles can.”

In Gladwell’s Micronesia example, we see that ideas tend to spread first (and most rapidly) within social groups as opposed to between such groups.  Hitwise data suggests that there exists a gap between each phase of the technology adoption lifecycle, a period of time in which a technology is in the realm of the Early Adopters before it reaches more mainstream acceptance among the Early Majority.  So what makes a technology bridge that gap and become a widespread piece of the marketplace?

Clearly, there is bandwagon effect taking place when we examine any type of diffusion research.  Those in the Early Adopter segments facilitate this bandwagon largely by word-of-mouth.  Luckily for those introducing new products, Early Adopters are more likely to blog or otherwise spread the word about whatever technology they have recently adopted.  In this way, Early Adopters act as gatekeepers to the world of innovation.

This data and psychographic analysis should, when the magnitude of it is comprehended, change the way that innovations are marketed to the public.  In Crossing the Chasm, Geoffrey Moore discusses the gap between Early Adopters and the Early Majority, and suggests that marketing should follow the one-at-a-time adoption process in order to cross that gap.  In other words, marketers should focus on one group at a time, gaining momentum from the buzz created by Innovators and Early Adopters in order to market an innovation successfully to the mainstream.  Moore’s theories apply most efficiently to disruptive technologies.

Innovation Diffusion: Early Adopters and the Spread of Technology, pt. 4

In Click, Tancer uses psychographic and demographic data about visitors to YouTube (collected by Hitwise), to determine the kind of people who made up the Early Adopter category for the site.

            While the demographics of these early users didn’t surprise data collectors at Hitwise (users were primarily young people — 39 percent in the 18-24-year-old category — who lived in California — more than 25 percent of all users — and earned under $60,000 per year — 57 percent of users.) But what Tancer uncovered about the psychographics of visitors was more compelling: the majority of Early Adopters for YouTube — those who first shared clips via email — belonged to very specific categories in the Claritas PRIZM market segmentation system: Bohemian Mix, Money and Brains, and Young Digerati.

            When Hitwise analyzed the same early-visitor data for other Web 2.0 sites, from Facebook to Flickr, it found that these particular psychographic segments were Early Adopters for all the sites it traced.

            The market research undertaken by Claritas to group each person in the United States into a specific psychographic segment gives us a sort of inside look at the types of people who are spreading innovation to mainstream markets.  By knowing more about these groups, we can determine which types of technology are likely to catch on and also predict which technologies will likely be “the next big thing” based on information about which sites these Early Adopters are now visiting.

Innovation Diffusion: Early Adopters and the Spread of Technology, pt. 3

One of Roger’s other theories traced “the frequency of those who adopt technology by the time it takes them to adopt that technology.”  The resulting curve was bell-shaped and represented five different segments: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

            Rogers theorized that the adoption of any innovation follows this process and that his identified segments represented the people involved in each stage of the process.

            Innovators are the first to introduce an idea to a wider market.  But, as Bill Tancer writes in Click, “while the Innovators might appear to be the target for a marketer’s interest, it’s the Early Adopters who have proven to be the catalyst by which a new product moves from being an exciting innovation to dominating the market by achieving mainstream adoption.”

            Early Adopters act as “opinion leaders”, influencing the decisions of the Early Majority, Late Majority and Laggards — which means they have the power to decide what becomes a success in the marketplace.

Innovation Diffusion: Early Adopters and the Spread of Technology, pt. 2

In 1962, Everett Rogers wrote a book entitled Diffusion of Innovations.  In the book, he analyzes “the process by which an innovation is communicated through certain channels over time among the members of a social system,” — or in other words, diffusion.

            Rogers book brought to light the earlier works of sociologists, anthropologists and mathematicians who had all studied the how’s and why’s of technology diffusion.  Rogers work examined research from over 500 diffusion studies and produced several theories, including a theory of the adoption process and a theory of distinct adopter categories.

            In his theory of the adoption process, Rogers lays out fives stages: awareness, interest, evaluation, trial and adoption. 

            The awareness stage represents ones’ first exposure to an innovation.  In the next stage, interest, the person becomes more interested and actively searches for more information.  In the evaluation stage, a decision is made: should one adopt the innovation or reject it?

            If a person chooses to adopt, they next move to the trial stage, wherein they use the innovation with varying frequency, determining whether they like it before moving to the adoption stage.  In this final stage, a person cements their decision to use the innovation, employing it with more frequency until it becomes a part of his or her life.

Innovation Diffusion: Early Adopters and the Spread of Technology

I wrote a long analysis of innovation diffusion, but for the sake of being bloggy, I'll post it in pieces :).

The world of innovation is filled with unlikely stars: books written by unknown authors that reach best-seller status; small budget films that become blockbusters; Web sites that net millions of users within a few weeks.

            How do these innovations spread from obscure ideas to widespread adoption?  How does change occur so quickly and, perhaps more importantly, why does it do so?  What makes an idea become a hit, and is there any way to predict if it will?

            For over a hundred ideas, the spread of new ideas has been studied by scientists in several fields.  When we bring together the research and analysis tools of modernity with theories that have been formed over the past century, the results shed some interesting light on why hits become hits and how we can foresee which ideas will spread to the point of mainstream adoption.

            The realm of technology seems to give rise to a high concentration of unlikely hits, perhaps because of the very nature of technology.  In a field dominated by the pursuit of the “next big thing”, the difference between “cutting-edge” and “old news” may be a matter of only a few days.

            Still, there are some clear examples of hit making in the online world that simply can’t be ignored — the rise of YouTube, for example.

            When YouTube was officially released in November 2005 after six months of beta testing, it was ranked thirty-ninth among video Web sites, garnering only .17 percent of visits to such sites.   

            By July 2006, the company announced that users were watching more than 100 million videos per day on its site, accounting for 60 percent of all videos watch online, according to an article in USA Today.  Alexa rates YouTube as the third most-visited site on the internet, behind Google and Yahoo.  Online analyzers at Hitwise determined that in 2007, YouTube consumed as much bandwidth as the entire Internet did in 2000.

          What caused the sites rapid growth?  By examining Hitwise data on YouTube and similar sites in the light of the theories of Everett Rogers, we can learn a little more about the patterns that show a hit is being made.