Social media may have started out as a fun way to post pictures of yourself acting stupid with your friends, but now, it's seen as the key to success for many companies — both startups and established names. To that end, techies the world over are consistently trying to come up with ways to track every little action that happens on the social web, from Tweets and Likes to upvotes and hashtag volume. But can all this data go one step further than simply providing after-the-fact results, and actually predict the future? According to British economist Noreena Hertz, yes, it can.
As CNN explains, behavior on social networks can tell us a lot about a particular brand of human behavior. But she believes that, with the use of complex algorithms, the outcome of buzzed-about future events can also be determined. They tried their theory out with The X-Factor and it worked remarkably well, accurately predicting which contestants would leave almost every week. Says Hertz of the experiment, "We were pretty much beating the bookies." And what she says holds a lot of weight in the biz — she foretold the global financial crisis three years before in her book IOU: The Debt Threat.
ESP for contest reality shows isn't exactly guaranteed to shake up the way the world works, but it's a start. By "listening in on what the world really thinks," Hertz claims she and her team can come up with insights based on social-media behavior that could have serious impact on the way companies and even politicians behave. We understand the logic, and it's an exciting prospect, but sometimes we can't help but wonder: Do marketing teams read too much into social action? Do 140 characters randomly spat out on Twitter actually have anything to do with an individual's buying habits or their real feelings about a product? It might be subconscious, it might be all smoke and mirrors. What do you think?
Photo: Courtesy of Noreena Hertz; Video: Via CNN.