TEXT OF STORY
Kai Ryssdal: The political futures markets are busy today as people place their online bets for a particular candidate before the polls close.
Prognostication’s nothing new, of course, especally not in business. People make a whole lot of money trying to figure out which way a stock will go or whether a new company will hit it big or bomb.
Now there’s a company trying to make guessing itself into a business. Predictify.com lets you guess the outcomes of sporting events, elections, even television shows.
And there’s some money to be made on the side. Marketplace’s Sean Cole logged on.
Sean Cole: So, we go to Predictify.com…
And there are basically two buttons: “ask” and “predict.”
Cole: Click predict and there’s all these different questions, different categories: pop culture, politics…
I chose politics.
Cole: Ah, which Democratic presidential candidate will Al Gore endorse?
All the questions are black and white like that: multiple choice, yes or no.
Cole: Your prediction? I’ll say Hillary Clinton…
And as i’m doing this i’m thinking “Wait… what do i know?”
Parker Barrile: There’s actually a fair amount of research supporting the concept of collective wisdom.
This is Parker Barrile, co-founder of Predictify. He says there’s a lot of knowledge in them thar Internet users and that crowds tend to average out at the right answer.
Barrile: So the idea was how can we harness that information in a way that really adds value?
Which is where the money comes in. Most Predictify users are in it just for fun and there are no ads on the site. But some askers post “premium questions.” That is, they pay — one dollar for every response they get. In return, they get anonymous demographic information of the answerers: age, race, etc. And not only that…
Barrile: On premium questions, when Predictify collects a fee from the question asker, we then share a portion of that fee with the predictors based on their accuracy.
Cole: And how much money can I make on the site if I’m guessing on a premium question and I get it right?
Barrile: So last I checked, the highest pay out to date had been I think was $13.75.
Barrile: Some would say that’s not a whole lot of money. Others would say there aren’t a whole lot of places on the Internet where you can make $13.75 for one minute of your time.
Meantime, some folks are using Predictify in place of expensive market research — and one of them is kind of famous.
Scott Adams: Yeah, well, I was kind of wondering “does the crowd really have wisdom?”
This is Scott Adams, the guy who created Dilbert.
Adams: Or is it just a bunch of idiots and you put them together and their idiocy is magnified. I didn’t really know how it would work, so I thought I’d give it a shot.
In short, he paid a dollar a response to ask how many copies of his new non-Dilbert book would be in print before the end of January. In the end, the crowd — about 1,300 people — predicted 406,857.280 copies. Adams says they way overshot:
Adams: And I suspect they’re not right, but it shows a lot more optimism than I have about the book and I think that the Predictify results kind of energized me and so I think I put in a lot more hours in the publicity than I would have if I hadn’t seen the Predictify estimates.
Other premium question-askers have said the demographic information gives them a genuine business advantage. But Kathleen Seiders, who teaches marketing at Boston College, says this demographic breakdown is too crude and stick-figurey. And these kinds of answers don’t tell you much:
Kathleen Seiders: It’s incredibly limited because when we do marketing research, we typically want to find out what people’s attitudes are — their perceptions, their intentions, their beliefs.
But there is one way Seiders thinks Predictify can help marketers. Not as research, but as actual marketing:
Seiders: You’re gonna see savvy people post questions when they’re really more interested in creating some kind of awareness of something.
Cole: It’s an advertisement phrased as a question?
Seiders: It’s a promotional opportunity that doesn’t look crass. And these are the kinds of things that people and companies are looking for.
People like Scott Adams, who’s way ahead of her on this one. He says his new book has been a little tougher to promote than usual…
Adams: Because I’ve got a problem with my voice.
A rare condition called spasmodic dysphonia.
Adams: So I was looking for ways that didn’t involve the traditional method of going out and giving speeches and talking to people in bookstores. So Predictify kind of worked perfectly into that idea.
Of course, if all you want to do is promote something on Predictify, there’s nothing to stop you from posting a question for free.
I’m Sean Cole for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.