A study by ScanAlert  found that the average online shopper in 2005 took 19 hours between first visiting a store and completing a transaction. In 2007, that jumped almost 79% to 34 hours. We’re taking longer to make up our minds. And we’re also doing our homework. Deloitte’s Consumer Products group recently released research saying 62 percent of consumers read consumer written product reviews on the Internet, and of those, more than 8 in 10 are directly influenced by the reviews.

In James Surowiecki’s Wisdom of Crowds, he believes that large groups, thinking independently with access to a diversity of information, will always make a better collective decision than the smartest individual in the group. Isn’t the Internet wiring this wisdom into more and more purchases? When we access these online reviews, we’re in fact coming to collective decisions about a product, built on hundreds or thousands of individual experiences. As the network expands, we benefit from the diversity of all those opinions and probably get a much more accurate picture of the quality of a product than we ever could from vendor supplied information alone. The marketplace votes for their choice, and the best product should theoretically emerge as the winner.

Of course, nothing works perfectly all of the time. As Surowiecki points out, communication can be an inexact and imperfect process, and information cascades based on faulty inputs can spread faster than ever online. But it’s also true that if a cascade leads to rapid adoption of an inferior product, we’ll discover we’ve been "had" faster and this news can also spread quicker. The connections of online make for a much faster dissemination of information based on experience than ever before, ensuring that the self correcting mechanisms of the marketplace kick into gear faster.

There’s a pass along effect happening here as well. For social networking buffs, you’ve probably heard of Granovetter’s "Weak Ties". Social networks are made up of dense, highly connected clusters, i.e. families, close friends, co-workers. The social ties within these clusters are strong ties. But spanning the clusters are "weak ties" between more distant acquaintances. The ability for word to spread depends on these weak ties. What the internet does is exponentially increase the number of weak ties, wiring thousands of clusters together into much bigger networks than were ever possible before. This allows word of mouth to travel not only in the physical world but also in the virtual. I looked at a fascinating follow up study to Granovetter’s where Jonathan Frenzen and Kent Nakamoto also looked at the value of the information and the self interest of the individual and their "strong ties" within a cluster as a factor in how quickly word of mouth passes through a network.

Deloitte’s study graphically illustrates the weak tie/strong tie effect. 7 out of 10 of the consumers who read reviews share them with friends, family or colleagues, moving the information that comes through the weak ties of the internet into each cluster, where it spreads rapidly thanks to the efficiency of strong ties. This effect pumps up the power of word of mouth by several orders of magnitude.

But are we also becoming more socially aware in our shopping? The research by Deloitte also seems to indicate this. 4 out of 10 consumers said they were swayed by "better for you" ingredients or components, eco-friendly usage and sourcing, and eco-friendly production or packaging. The internet wires us into communities, so it’s not surprising that we become more sensitive to the collective health of those communities in the process.

What all these leads to is a better informed consumer, who’s not reliant on marketing messaging coming from the manufacturer or the retailer. And that should make us all smarter.

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I had the great privilege of hosting the London Wiki Wednesday last week (June 6) and in amongst the animated conversation I made the mistake of associating the Wisdom of Crowds with wikis. Andrew Hardie, a fellow attendee, set me straight by saying:

The basic tenets of the Wisdom of Crowds are:

• Diversity of opinion: Each person should have private information even if it’s just an eccentric interpretation of the known facts.
• Independence: People’s opinions aren’t determined by the opinions of those around them.
• Decentralization: People are able to specialize and draw on local knowledge.
• Aggregation: Some mechanism exists for turning private judgments into a collective decision.

The point being that with wikis participants are collaborating.  The intelligence that emerges is different from people providing opinions aside from each other.  I tried to illustrate this in the Power Law of Participation, as the difference between Collective Intelligence and Collaborative Intelligence:

I view Collaborative Intelligence, or the Wisdom of Wikis, as a higher order.  Similar to the difference between an opinion poll on if we should withdraw from Iraq and deliberative polling on the same question.  When people face each other with their opinions, in moderation, the result that emerges is more often than not different from the opinion they came with.  I first encountered deliberative polling via Joi:

Had dinner tonight with Lawrence Lessig to talk about emergent democracy and other things. Larry pointed out some interesting work called deliberative polling being done by Professor James S. Fishkin. Since polling forces people to vote on something they don’t really know too much, the data may be statistically accurate, but is not necessarily the best way to promote a democratic system. Deliberative polling takes a diverse group of people, forces them to discuss the issues in small group, in large groups, small groups, over and over again for a fairly lengthy process until everyone has a pretty good idea of the issues and a balanced and educated position. Polls are conducted through the process to track how people’s opinions change. Afterwards, many of the people who have participated become much more active citizens. I think that this is similar to the emergent democracy idea that we have. Maybe we can try to do this deliberative polling using the online tools that we have.

Right now we are fascinated by the Wisdom of Crowds that emerges from low threshold participation in Digg-like tools.  Maybe that’s all we have time for.  But there is far more opportunity over the long term for new tools that serve the core of a social network, and scaled laboratories such as Wikipedia to explore the Wisdom of Wikis.  Wikis themselves, to answer a question from Julian, could use more threshold activities, such as Favoriting in Socialtext, but there is more we could do to turn weak signals into strong signposts.

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A Day Without Google Draws Crowds

Google, I should note, isn’t the only engine upon which Alt Search Engines is (temporarily) turning its back.  “All day Tuesday, June 12th, don’t use any of the 5 major search engines,” the site’s editor, Charles Knight, suggests.

“Avoid Meta search engines, since most of them include the major search engines,” he continues.  “Likewise, the specialized vertical search engines may be too narrowly focused.”

Lastly, “Consider changing your homepage or downloading their toolbar.  You can always uninstall everything and change back on Wednesday,” Knight points out.

But maybe you haven’t heard of Charles Knight, and this all sounds a little nutty.  Well, Read/WriteWeb’s Richard MacManus is participating, and Search Engine Land’s Barry Schwartz has also taken note of the event.  As for its “nuttiness” . . . opinions vary.

On the insignificant thoughts blog, the idea is filed under “stupid,” and the author writes, “Feh.  Whatever.  I’ve got work to do.”

Similarly, David Berkowitz weighed in through Alt Search Engines’s “Comments” section, and says, “I might as well take it as a vacation day. The top 5 are the top 5 for a reason.”  He may have a point – your humble author isn’t going to risk the lost productivity that might accompany a departure from Google, Yahoo, and the rest.

Yet others have been more accepting of A Day Without Google, and the Alt Search Engines site should collect a lot of feedback about their experiences.  Even if you aren’t participating, this will be worth keeping an eye on.

An example of an implementation can be found at the My Fox LA site. I think there are multiple stories to tell about this service, both from a user perspective and the site monetization angle. The results are different enough that I think it may take users some getting used to, but it certainly invokes interest as an alternative to the ineffective site search that exists on most web sites.

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Wisdom of Crowds Is Dead

^{Madness is rare in individuals – but in groups, parties, nations, and ages it is the rule. – Friedrich Nietzsche.}

Why the philosophy lesson? Well, I was reading Neil Patel’s post at Search Engine Land on "How Not To Be Buried on Digg." Adding his research to Danny Sullivan’s advice on how to baby-sit Digg burials, we know certain things:

Diggers don’t like SEO/SEM or online marketing articles and make great efforts to bury them and label them as spam – whether they are or not.

 Diggers don’t like articles about Microsoft or Sony – no self-respecting post-adolescent geek would like them. Microsoft and Sony get the same treatment as SEO.

Digger’s don’t actually read the articles they’re voting on, but base their digging on the title and description alone. Instead of the articles, they read other Digger’s comments and decide who is the geek-chic’est.

Patel, who is doing well in his SEO wager with Jason Calacanis, then proceeds with advice about how to trick Diggers into digging your stories. Diggers don’t trust anybody over 30, so appear youthful and be funny when possible. Cuz these guys are silly, and you’ll need to be silly too.

And I thought to myself: What a sad position to be in. People with legitimate content, looking to maximize traffic find themselves having to pander to what’s become the Web’s In-Crowd. It’s true, we all want to be in there, but there are rules, even if the rules seem arbitrary and ill-informed.

It’s also true that we have to be there. We have to be present to get ahead — it’s exactly like the hated good ol’ boy system.

Is this what Digg has become? A social news clique; the reversed reincarnation of 80′s movie villain jocks and their cheerleader girlfriends; Squealers walking on their hind legs?

Don’t answer that. I like Digg, I really do. And I like Wikipedia. Both are great concepts, great information sources – as long as you don’t mind that one community is gated, and the other community is, like humans, often wrong. 

I’m not the first to make this declaration about the herd. Aristotle, Nietzsche, Thomas Jefferson and I, if alive at the same time, would have been drinking buddies – probably with the guy that drew this cartoon.

But when you cover this industry, you notice patterns: mature professionals lowering their denominators for the latest buzz-builders; Wikipedia vandals proving the need for something more structured like Citizendum; Facebook users staging revolts because they don’t understand public information isn’t private.

Google, originally a fan of crowd wisdom, learned its lesson the hard way. Links were scored heavily in the algorithms until the crowd abused them with link spam. Now it’s authority Google’s after more than apparent popularity. I think we’ll see a greater emphasis on authority in other Web places in the future. 

Wisdom of crowds, indeed. Hopefully this Wikipedia page, which outlines failures of crowd intelligence – too homogenous, too centralized, too imitative, too emotional – won’t be changed before you get to see what I saw.

Humbly submitted by the elitist, iconoclastic, egghead jerk that I am.  

Scott points to a study at SiteLogic that looked at traffic flows to several sites, including Kim Krause Berg’s Cre8pc, before and after they had been “dugg.”

The conclusion, not surprisingly, confirms what many people have been saying since Digg emerged as a major force in driving traffic to websites, which is that the vast majority of those who arrive from a Digg link spend nanoseconds on your site – in some cases, just long enough to post abusive and misspelled comments – and then vanish. Not only do they not click anything (although John Chow disagrees), but they (likely) never return.

Kim Berg writes about the experience on her blog, but says she isn’t particularly concerned about the effect on her own site. She’s more concerned about all the abusive comments that were left on her post and also on the site she pointed to. As she puts it: “I am no fan of Digg. Never have been. This experience and the comments left here just add to my contempt for a place where people act like wild animals instead of human beings.”

There is no doubt that Digg and Reddit and similar sites drive massive amounts of traffic, as Search Engine Journal points out – and SEOmoz also notes the benefits of what it calls a “linkbait” strategy. But is that traffic actually worth something over the long term? It might be nice to brag about, but it’s not always something to build a business around. Ravi says Digg traffic is worth “diddly-squat.”

Tony “Call me Dr. Tony” Hung has also written about this, and others are commenting on Kim’s experience, including 10e20, Chip Griffin at Pardon the Disruption and Small Business SEM. And Webomatica has written about his experience with Digg and Megite and other sites.

On a related note, I’ve been noticing more and more articles about how much traffic StumbleUpon drives to a site, something I’ve noticed a few times with this blog. It doesn’t get written about as much, but it is clearly a major force, as this piece at SEOmoz illustrates. And there is also some evidence that a Stumble link has more longevity than the typical link from a social bookmarking site. StumbleUpon – which apparently has more users than delicious – used to be based in Calgary, but moved to the Valley after getting venture financing last year.

Note: The term “flash crowds” was coined by sci-fi author Larry Niven in a fantastic short story about the invention of a phonebooth-like transporter machine, which caused instantaneous crowds to appear any time there was a crime or natural disaster.

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Mathew Ingram is a
technology writer and blogger for the Globe and Mail, a national
newspaper based in Toronto, and also writes about the Web and media at
www.mathewingram.com/work and www.mathewingram.com/media.

So to help anyone interested in learning more about Digg sort through the jungle of information out there I have created the following list of bloggers who in my eyes have proved through their writings on the subject that they really know what they are talking about. These guys have established themselves as authorities on the subject of Digg. So here is the list of the Digg experts along with a few links to what they have written about Digg. I am sure there are others experts out there but these are the ones that I have found to be the most insightful. If you know of anyone else who deserves to be on this list please list them in the comments.

Neil Patel

- Beginner’s Guide to Digg
- How to get on the Digg homepage
- How Not To Get Your URL Banned From Digg
- Spying On Digg

Muhammad Saleem

- The Digg Economy: Socialist Bookmarking
- Why Digg’s Numbers Matter
- Why The Wisdom of Crowds Fails on Digg
- Legalizing The Underground Digg Economy

Todd Malicoat

- Etiquette for Submitting Stories to Digg
- The Search Marketers Guide to Digg

Ozgur Alaz

- Top 10 Actionable Tips (Rules) That Make Me Top Digg User

Stephen

- On Diggs and Votes, but no Reads.
- Digg’s Upcoming Features?

Cristian Mezei

- The Digg Algorithm – Unofficial FAQ

Rand Fishkin

- Why It Doesn’t Pay to Game Digg (or Other Link Aggregation Sites)
- Top 100 Digg Users Control 56% of Digg’s HomePage Content

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Chris Sandberg is an independent internet marketer from who blogs regularly about search marketing and internet business.

Usability expert Jakob Nielsen has some cold water for those starry-eyed techno-philosophers: participation inequality on the Web is rampant. The offline silent majority, whose main concerns are check engine lights and E. Coli-free spinach, reserve their right to remain silent on the Web as well. Nielsen’s haunting summary:

They also account for nearly all the content – confirmation that freedom of speech is a rarely used protected institution? Maybe, but that’s beside the point. This seems to be the general rule of Web 2.0 – that the smallest numbers of people contribute the most insight, rather than the other way around. And it’s gotten worse since the Usenets of the Nineties.

A study of Compuserve bulletin boards, Internet mailing lists and internal discussion boards found that 25 percent of messages were from three percent of participants. In the 21st Century, the Elite Web has grown much more powerful.

The breakdown:

Blogs and Wikis are worse. Only 0.1 percent of users contribute to the blogosphere. Only 0.003 percent edit a Wikipedia article. At Amazon, one reviewer has written over 12,000 book reviews.

Last Spring, our own David Utter reported on organized factions of Digg.com users collaborating on which news stories were promoted to the front page of the site.

If there is any real wisdom among the crowds, they’re not taking the time to share it with the rest of us. And, as the participatory Web imitates life imitating art, the squeaky wheels are the ones rolling this whole thing forward.

Nielsen gives some advice for encouraging users to make a contribution to the online society, a few of which are tricky but essential within the realm of Internet philosophy. It’s worth a read if you’re a Web-democratization evangelist.

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• SXSW: We Got Naked, Now What?
• From The “Why Doesn’t Everyone Do This?” File…
• This One Goes To 11…
• SXSW: Wisdom Of Crowds (liveblogging)
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Bummed I’m not there for the Cluetrain: Seven Years Later discussion today…

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Christopher Carfi, CEO and co-founder of Cerado, looks at sales, marketing, and the business experience from the customers point of view. He currently is focused on understanding how emerging social technologies such as blogs, wikis, and social networking are enabling the creation of new types of customer-driven communities. He is the author of the Social Customer Manifesto weblog, and has been occasionally told that he drives and snowboards just a little too quickly.

Three examples of the phenomenon:

In “wise crowds,” there are typically a few experts, a few people in the middle, and lot of people who individually have a high rate of error.

Yet…if you take the average of all the “guesses,” the average is usually a very good approximation…in some cases, within a few percent (3%-5%) of the actual value. Surowiecki: “Results of the market map almost perfectly onto the outcomes of events.”

There are a number of examples where the “collective guess” has provided good results:

• Siemens (what will be the market lifespan of a product?)
• Google (how many users with GMail have after three quarters?)
• Eli Lilly (which drugs will make it through clinical trials?)

Why does this work?

Everyone participating in these markets has “some” idea of what the answers will be, but they also have biases.

However, this doesn’t always work. For this to work, it requires three things:

• Some form of aggregating peoples’ judgements
• Diversity
• Independence

Why is diversity important? Wise crowds need cognitive diversity … difference in frames of reference, tools used to solve problems, etc. It simply expands the range of information that is available, and avoids the hurdles and obstacles that a single individual may run in to. Diversity helps to even out the blind spots and biases in a crowd…and the biases and blind spots of “experts” as well.

The phrase “collective intelligence” is being used extensively to capture this concept.

Diversity also helps in get around peer pressure. Story is told of peer pressure in psychological experients, as well as examples of “groupthink.”

Independence – make decisions on own intuitions, not piggybacking on the statements of others. Instead of aggregating the judgements of independent people, instead we come to watered-down decisions in groups, trying to find the lowest common denominator that makes everyone “happy enough.” The more “independent” the participants in the group are, the more applicable the wisdom of crowds idea is.

Humans are naturally imitative. Example: Put a person on a street corner and have him gaze up at the sky (at nothing). If one person is doing this, some passersby look up. If five people are put on a streetcorner to look up, half the passersby look up. If eight people are placed on a streetcorner and look up, eighty five percent of the people passing by also look up.

One reason independence is hard to come by is that “going with the group” is a way to protect self-reputation. Keynes: “It is better to fail conventionally than to succeed unconventionally.” If you go with the group and are wrong, you can easily say “that’s what everyone was doing” and protect reputation.

Fundamental lessons

The knowledge that we want is often NOT in places that we think to look. We also typically overestimate who “experts” are.

IMPORTANT: There is a difference between “experts” and “expert information.” We overestimate what an “expert” says, but a diverse, independent crowd can derive the “expert information.”

Great point on the “echo chamber” effect — people get locked into small worlds, even on the internet. (Think of the case where one only gets information from a limitied set of sources.)

Final story: What collective intelligence can look like

USS Scorpion, SSN-589, a nuclear submarine, was lost on tour of duty in 1968. The Navy searched fruitlessly, then tried a crazy idea led by John Craven: Craven assembled a diverse crowd of experts, and came up with scenarios (Russian sub had hit it, torpedo went off in tube, etc.). He asked experts to bet on the scenarios (which one do you think is most likely?). He also asked them to bet on direction, velocity, etc. Independent judgements were pulled together, and pointed to a particular place on the ocean floor. No one person knew the facts, for example, how steeply the Scorpion had fallen to the ocean floor, how fast it was going, etc. More importantly, no one individual in the group came up with the location that was predicted by the group.

A few months later, the sub was found 220 yards from the location predicted by the group.

Q&A: “How many people does it take to make a crowd?”

Over 50, it’s pretty certainly a “crowd.” However, even in small groups (6-8 people), even the group’s collective judgement may surpass the results of the group’s smartest member. The challenge with small groups is that it takes a lot of work to ensure diversity and independence.

Q&A: What are some other areas where the wisdom of crowds could work?

Crime solving is one. Juries could be another…although the drive for unanimity is challenging.

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Christopher Carfi, CEO and co-founder of Cerado, looks at sales, marketing, and the business experience from the customers point of view. He currently is focused on understanding how emerging social technologies such as blogs, wikis, and social networking are enabling the creation of new types of customer-driven communities. He is the author of the Social Customer Manifesto weblog, and has been occasionally told that he drives and snowboards just a little too quickly.