The Wisdom and Foolishness of Crowds

In his 2004 book The Wisdom of Crowds, James Suroweicki helped us understand how a diverse collection of information from independently thinking individuals can result in a more better or more accurate decisions and predictions than individual experts. That’s good news for a democracy!

With the rise of social media platforms like Facebook and Twitter, businesses and brands have sought to use social media listening platforms to learn more about their consumers and identify emerging trends and opportunities. But businesses need to exercise caution in thinking that the information they gain from these platforms is coming from a “wise crowd”.

In a thought-provoking article in the Wall Street Journal, Jonah Lehrer pointed to a recent study finding that the interconnectedness created by our social networks actually decreases the collective wisdom of the crowd. We are more frequently influenced by the expressed thoughts and opinions of others, and the real-time nature of social networks can create a powerful trend towards “group-think”. While our instinct would suggest that the access to a larger volume of information would make each of us smarter, the reality is that the volume forces us to put tighter filters on what we allow ourselves to read, see, and consider. Each of us is more likely to listen to a friend, or someone who shares our own opinions, and so be reinforced in our existing opinions,

So, while social listening platforms can provide excellent anecdotal information, we need to be careful that the “crowd” to which we are listening is “wise”. According to Surowiecki, three key criteria separate wise crowds from irrational ones: diversity of opinion, independence (people’s opinions aren’t determined by those around them) and decentralization. We may want to “tune” our listening platforms to assign relatively more importance to individual comments, and relatively less weight to the feedback. We need to be careful not be be swayed by sheer numbers and to trace sources: if thousands of tweets can all be traced back to a single information source, one can hardly argue that diversity, independence and decentralization are at play.

Does this mean that brands shouldn’t pay attention to “group think”? Not at all! A brand ignores the “group” at its peril: just ask United and the 11 million folks who have watched a video about their terrible baggage handling of one guitar! Or the 40 million folks who watched the Old Spice responses campaign in one week. The group “herd” mentality can help or hurt brands. We just need to be careful about how we seek to learn from the crowd.

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