The vast majority of the news about the economy is so dire these days, it’s unusual to hear something positive. But according to the prediction markets, the outlook for the Dow Jones is fairly optimistic. In fact, a majority of people are betting that the Dow will rise above the 8000 mark before the end of April. To read more about this positive news, take a look at the story that I wrote today for The Industry Standard: Prediction markets lead toward a Dow rebound.
Archive for February, 2009
There is no empirical evidence proving that Barack Obama’s love of his BlackBerry accelerated sales of the Research In Motion (RIM) smartphone in the fourth quarter of 2008. But stunningly high sales of the gadget are so coincidentally timed around the news of the president’s refusal to give up his BlackBerry; they seem hardly a coincidence at all.
I dig into this issue a bit more in today’s article on The Industry Standard – iPhone vs. BlackBerry: For once, Apple might lose a popularity contest.
But the larger discussion of celebrity endorsements as a marketing strategy for product sales is an interesting one. Companies have been hiring celebrities for years to be the face of their products, to often remarkable results. And research shows that there is usually a benefit to companies that hire a celebrity to endorse their products.
According to a report that explores the relationship between celebrity endorser effects and advertising effectiveness, the key factors for a positive celebrity endorsement are:
1. Celebrity Performance
2. Negative Information
3. Celebrity Credibility
4. Celebrity Expertise
5. Celebrity Trustworthiness
6. Celebrity Attractiveness
7. Celebrity Familiarity
8. Celebrity Likeability
9. Celebrity/Product Fit
If the keys to a celebrity endorsement’s success lie in these factors, it would seem that a celebrity that has these factors, uses a product in “real life,” and is a fit would be a homerun for a company. Someone like President Obama, who currently has incredibly high ratings in all these areas – and is a perfect fit for the professional BlackBerry user profile – is a major win for the company.
But how can companies harness that publicity and put it to work for their products? How can BlackBerry take advantage of Obama’s support? How can Prius use Cameron Diaz everyday driving of their car to their benefit? How can Baby Bjorn take advantage of star power mom Angelina Jolie’s use of their product as she travels with her six kids to Japan?
Taking advantage of the power of these types of everyday celebrity endorsements will be an interesting challenge for companies as they wade through the legal issues involved. Perhaps the best hope is in spreading images and information virally, and hoping that the media catches onto the story.
Prediction markets are speculative markets that are created for the purpose of making predictions. Basically, a prediction is made and then people bet on whether that prediction is likely or unlikely to take place. According to Wikipedia,
“People who buy low and sell high are rewarded for improving the market prediction, while those who buy high and sell low are punished for degrading the market prediction. Evidence so far suggests that prediction markets are at least as accurate as other institutions predicting the same events with a similar pool of participants.”
The most interesting thing (to me) is that prediction markets have proven to be quite accurate at determining the outcome of future events using the wisdom of crowds. And prediction markets are used in all kinds of industries, from finance to politics to entertainment.
Prediction markets are also used in the tech industry, where a prediction market was launched by The Industry Standard in February 2008. This is where I come in.
I’ve been writing for The Standard for awhile, but today marks the beginning of a new assignment – tackling the Industry Standard’s tech prediction market. I’ll be writing a couple of times a week about The Standard’s prediction market, and various technology predictions that are current on the site.
My first article debuts today discussing an upcoming announcement by Amazon. The company has announced an “important” press conference on February 9, but hasn’t released any details about what that press conference will entail, leading to widespread speculation that the company will release version 2 of the Kindle next week. So will Amazon launch Kindle 2.0 next week? The market is currently saying “yes.”
I’d like to invite you to participate in the Industry Standard’s prediction market with me. Come and vote for and against the tech predictions that are up on the site right now. And please comment, send me thoughts and suggestions, and provide your insights about the various predictions that are up on the site. I will always be looking for more ideas and topics for discussion.