Yesterday, Duncan Watts posted an interesting article about the effect of cumulative advantage in the music and movie markets. Through an online study of more than 14,000 participants, Watts, along with Matthew Salganik and Peter Dodds were able to draw a few important conclusions. The most important finding was that while quality had an impact on listener choices, social-influence had a much larger impact.
Because the long-run success of a song depends so sensitively on the decisions of a few early-arriving individuals, whose choices are subsequently amplified and eventually locked in by the cumulative-advantage process, and because the particular individuals who play this important role are chosen randomly and may make different decisions from one moment to the next, the resulting unpredictably is inherent to the nature of the market.
The findings of the study support the strategy adopted by both the movie and music industries. Production companies diversify across a number of products since a small percentage are successful (somewhere around 1 in 10 succeed in the music industry). What are the implications of the study in regards to marketing?
I personally interpreted the findings to suggest that yet again, the most important marketing strategy is word of mouth marketing. I suggested this last week in my article “The End of Mainstream Marketing”. Conversely, mainstream marketing may still be effective as a way of communicating a certain product to key influential consumers. Ultimately, the results of the study further support the idea that luck is a major factor in a successful business. I am a believer of the idea that thought leaders can help to guide consumer decisions but in the end it is ultimately up to the consumer to decide. By diversifying your marketing strategies, you can help increase the odds that your product or service reaches the hands of influential consumers (the consumers that are discussed in Malcom Gladwell’s “Tipping Point”).