June 6, 2007

Incentives Matter: The Role of User-Generated Content in Advertising

Filed under: Incentives,Observations — admin @ 6:04 pm

I found this quote to be well… not surprising.

Recently, MasterCard ran a fairly structured, fill-in-the-blank consumer-created “Priceless” campaign. And even within the structure of the program “we were hard-pressed to find a lot of good ads,” she said.

What incentives do consumers have to create advertising that is effective in generating clicks, leads, sales, or whatever. A payment scheme linked to something measurable (e.g. clicks) would be more effective in inducing a consumer to create something of value.

The article:
Advertising Age – Digital – Video Report:The Role of User-Generated Content in Advertising

July 8, 2006

Incentives: the next step in user experience

Filed under: Incentives — admin @ 8:15 pm

Incentive-centered design is a new and promising approach to solving problematic issues in the design of complex software, websites, or information systems. In short, the idea is to give users incentives to adopt behaviors that are socially beneficial (i.e. it’s not just about the user). A more elaborate definition can be found here. For instance, spam is a common problem because users have misaligned objectives (i.e. spammers want to send spam, but recievers don’t want spam). “Improving Email Service with Markets“, a project at the University of Michigan’s School of Information, provides a possible solution to spam.

Simply recognizing that users have misaligned objectives and designing incentive-compatible mechanisms can vastly improve the user experience. I had a previous experience with a seemingly trivial software feature that was attentive to incentives. Flash, a software that use quite frequently, comes bundled with a scripting language. When I type in the scripting pane a contextual menu will pop-up to give me the next available options. The caveat, though, is that the menu will only appear when I use a certain naming convention (as defined by Macromedia or uhh… Adobe). For a while I was perplexed by this. It seemed that from my experience with programming it would have been easier to make the menu always appear. Wouldn’t that provide a better user experience? Why would Macromedia design it this way?

Well… it’s about incentives. Flash is typically used as a single user desktop application, but Macromedia has been pushing it towards a collaborative development environment. One hang up (and there are probably others) is that users might find it difficult to share documents if they are written with different naming conventions, and, thus, avoid collaboration. Even if users do recognize the value of collaboration, coordinating on which naming convention to adopt is difficult from the user perspective. To put it concisely, Macromedia rewards users with a better user experience if they adopt their naming convention. Even I eventually and reluctantly adopted the naming convention.

The more interesting take away is this. Organizations with a large user base might be in best position to design incentives that allow coordination and collaboration on activities that would have not been possible otherwise.

June 30, 2006

Fusing Organizations and Market Knowledge

Filed under: Aggregation,Market — admin @ 5:31 pm

Information technology is undoubtedly changing the way the live, but the most radical shift will be in the way organizations connect with the market’s knowledge. We can already see this already occurring. The market supplies Amazon with preferences, and in turn Amazon processes it into relevant recommendations. The market supplies Google with hyperlinks, and in turn Google processes it into better search results. There are two recent incarnations that follow this same pattern. First, Crowdsourcing is where the market actually supplies an organization with goods (e.g. Photography) via the web and in turn the organization redistributes it to those who want it. Second, Freedbacking is where the market supplies an organization with constructive feedback, and in turn the organization can process and make better decisions about product updates.

The market as a vast resource of knowledge isn’t exactly new. In 1945, F.A. Hayek proposed that market price was an aggregation of the market’s knowledge on the scarcity of a resource. Within the last couple of decades there has been an explosion of research and commercial applications of this concept (usually called Information Markets). The most notable example is the Iowa Electronic Markets, a market for predicting economic and political events. A more interesting example is the experiment between HP and Charles Plott where an internal information market was able to forecast future sales better than top sales executives. And now, as mentioned beforehand, we are seeing even more interesting dynamics linking market knowledge and organizations.

June 22, 2006

Designing for the (dis)Organization

Filed under: Information Design — admin @ 6:16 pm

I am currently reading “Information Design” by Robert Jacobson. In the chapter “Chaos, Order, and Sense-Making: A Proposed Theory for Information Design” Brenda Dervin describes that

Information is a tool designed by human beings to make sense of a reality assumed to be chaotic and orderly

This was particularly interesting to me. Organizations function somewhere in between chaos and order, but (as I learned in my knowledge management course) organizations tend to create information that give the perception that everything is organized and working properly. While absolute organization may seem palatable, it doesn’t leave room for the new (i.e. innovation), and, of course, absolute chaos produces perpetual novelty without taking advantage of core capabilities.

So… here’s my question.

Do the increasing number of tools that automatically “organize” information really cause organizations to become myopic to the underlying (and increasing) disorganization? For instance, workflow diagrams tend not to really describe how work is actually performed.
Secondly, (as alluded to above) we shouldn’t caste disorganization as being something to avoid. How can we design information/tools that accurately reveal disorganization (i.e. chaos) that is in need of organizing? And how can we design information/tools to reveal disorganization that is actually healthy and produces alternative perceptions and innovation?

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