Markets and betting suffer from an image problem and a learning curve — they appeal strongly to a certain demographic but are repelled by others. As much as I’d like this mentality to change, I don’t see it happening in the near future.
In my view, the prediction market consultants should focus on the market-literate people out there (the sophisticated users of markets) before branching out to other forecasting techniques (”-competitive forecasting”-), which the other (i.e., non-market) forecasting professionals do master better.
Read the last blog posts by Chris. F. Masse:
- Al Gore prediction markets
- [ABC7 Futures Market] – An Inkling stock has ended.
- Jesus’ Tomb Event Derivative, anyone??
- TradeSports-InTrade Trader: Todd Griepenburg is right.
- Globalization = Internationalization + Localization
- BetFair Radio will be a mix of live horseracing commentaries, informed debate and detailed betting analysis.
- Oscars 2007 – Hollywood Stock Exchange – Bingo!
- Oscars 2007 – TradeSports-InTrade – Bingo!
- InTrade-TradeSports to one of its big customers: GO TO HELL.
- InTrade-TradeSports to Todd Griepenburg: GO TO HELL.
- HSX co-founder Max Keiser on a quest to reinvent economics
- To My Readers – Todd Griepenburg vs. TradeSports-InTrade
My conclusion is somewhat different. Markets have the advantage of being fun (for some) and thus providing an incentive to trade if a financial one is missing. But for companies that are serious about “crowd wisdom” and willing to provide financial incentives, competitive forecasting has the advantage of draining less time from a potentially smaller number of employees. Yes, forecasts may not update continuously and may be opaque to users, but managers may want it that way. I would think that consultants in this area should be familiar with the advantages and pitfalls of both techniques.
Chris,
I would put this somewhat differently, though I am clearly looking at this mainly from my specific position.
We don’t need to market prediction markets to market-literate people (how many “markets” can I get in one phrase?), we need to find where prediction markets can solve a particular need for businesses, organisations, or people. In other words, don’t market the tool, market how the tool will solve their pain. Certain people will understand it straight away, and others won’t, but they’re more apt to understand it if they have a problem that can be solved.
That’s just my two cents/pence…
“I would think that consultants in this area should be familiar with the advantages and pitfalls of both techniques.”
Jason, if I were looking for forecasting techniques, I would buy prediction market software from our prediction market providers. If I wanted another forecasting technique, I would buy it from the other forecasting technique providers. I’m a great believer in specialists.
“Certain people will understand it straight away”
Jed, the ones who will understand it straight away… are the market-literate people, I’m sure!!! That was my damn point. Don’t try to evangelize the Earth planet. Focus on people who are already friendly to the market ideas.
Only my two “centimes”…
And you’ll notice that there are no comment to this piece:
The Question of the Day about our Prediction Market Consultants
http://www.midasoracle.org/2007/02/20/the-question-of-the-day-about-our-prediction-market-consultants/
Chris, I think you misunderstand my point.
As someone that’s trying to get prediction markets used more in the corporate world, I’m not going to try and find market aficionados and then try to sell to them. Sure, they may find prediction markets a great tool, but they’re not going to use them unless they NEED them.
Instead, I’m trying to find businesses that NEED better forecasting ability, and introducing (or helping promote) prediction markets to them. It doesn’t matter if they’re an aficionado or not; if they see a solution to a business problem, they’ll be interested.
My problem with your approach is this: how do you identify market-literate people?? Should we all be hanging out at the local PaddyPower, Totesport high street shop, Vegas sports book halls, BetFair/Intrade forums? Certainly they’ll understand prediction markets, but that doesn’t mean a thing when it comes to adopting them.
** Prediction markets are a solution to a problem. Find the people with that problem, and selling the solution is simple.
#1. Jed, precisely, the point of this (apparently, very controversial) blog post is to say that a successful marketing approach for prediction market consultant would be to “find market aficionados [*] and then try to sell to them”, as opposed to trying to convert the whole Earth planet to prediction markets (CDA).
[*] Second criterion: AND WHO NEED FORECASTING SERVICE
#2. “how do you identify market-literate people??”
Ever heard of targeted marketing/advertising? (I’m not in position to lecture you on that. Just a general thought for you.)
#3. “Prediction markets are a [**] solution to a problem.”
[**] A SOPHISTICATED solution to a common problem (corporate forecasting). And all the prediction market consultancy are currently sale-intensive operations, as said rightfully Jason Ruspini, the other day. The typical kind of activities that need a more targeted marketing, so as to be more profitable. Improving the efficiency of your marketing, when this one is huge, can have a huge impact in your bottom line.
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Jed, I respect your knowledge and your personal angle. In this blog post, I wanted to lay out an idea about the efficiency of the marketing strategy of the prediction market consultants. I leave it to the readers and the other commenters to see whether I’m in the wrong. That could well be!!!!!
Hi, Chris.
I’m not trying to be controversial here; just trying to broaden the “conversation.” It’s good that we have this forum to bash some ideas around, even if we’re both talking about two different parts of the same thing.
By the way, what’s going on with comment spam here? I thought you set it up so that couldn’t happen?
“broaden the conversation”: Absolutely!!
Yes, three trackback spams made their way and I had to delete them manually.
The “Simple Trackback Validation” I have requires that each trackback does indeed deep link to one Midas Oracle blog post. If that condition is fulfilled, then the trackback is accepted. Obviously, some spammers managed to build in the required condition.
The alternative (other than stopping accepting trackbacks) would be to use Askimet. But one can’t use it for trackbacks only, and the way it deals with comments is annoying. It holds hostage many legitimate comments; they are held for “moderation”, even though they come from our registered commenters.
Anyway. Thanks for your input here.
I agree with Jed. The central issue is finding customers with forecasting needs that will demonstrably have an effect on profits. Assuming that a market is always the best forecasting tool, or that market-oriented consultants can’t also have expertise in non-market techniques aren’t the most “fit” views.
“finding customers with forecasting needs that will demonstrably have an effect on profits”
The whole point of my blog post was to acknowledge the difficulty that our prediction market consultants currently have to recruit new clients. If what you said were true, then our consultants would register new customers by the ton. They have only a fistful of them.
Which is why I proposed a screening test: Are you or are you not a market aficionados? If the answer is “no”, then move on; leave that prospect to a classic forecasting service provider.