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The New Marketing Paradigms: Social Networks, Chaos and Memes

2010 October 17

New ages require new rules.  It should be obvious to even casual observers that there is a tectonic shift in marketing taking place and we all have to adapt to a rapidly changing context.  What’s not so obvious is what that means.  What do we actually have to do to bridge the divide?

Many say that adapting means that we have to abandon old rules and the substrates out of which they grew.  In this view, we need to embrace Google, Twitter and Facebook and abandon the old ways of broadcast and print.

However, a more serious approach is to endeavor to understand the forces underlying the change.  New paradigms arise when old frameworks prove inadequate to solve modern problems.  Yet, for new paradigms to be successful, they need to apply to old ones as well.

What is a Paradigm?

The term paradigm shift was coined by Thomas Kuhn in his classic book, The Structure of Scientific Revolutions. In it, he describes 3 phases:

Pre-Paradigm Phase: When something new comes along, nobody is quite sure what to make of it. There are a lot of ideas and opinions, but no clear consensus. It could be argued that many aspects of digital technology, digital media especially, are pre-paradigm.

Normal Phase: At some point, a new framework evolves, problems start getting solved and things start happening. A consensus builds about the “right way of doing things.” It’s not perfect, of course, there are some anomalies that don’t quite fit, but generally speaking, everyone is happy.

Revolutionary Science: Eventually, the anomalies add up or the context changes in a way that makes the earlier paradigm inadequate.  A new generation of ideas comes along with novel approaches that make significant progress in solving the important problems of the day.

And on it goes…

New Paradigms Build on Old Ones

Many people confuse Kuhn’s concept of paradigm shifts with Joseph Schumpeter’s ideas about creative destruction, but paradigms are conceptual entities while creative destruction applies to economic entities.  That’s an important difference.  Individual organizations can live and die, but good ideas live on.

Physicist Leon Lederman illustrates this point well in his acclaimed book, The God Particle, by comparing Newton, Einstein and quantum physics.  Einstein, quite famously, replaced Newton’s view of the universe with his own and then was himself supplanted by quantum mechanics, which he never accepted.

However, and this is a crucial but often overlooked point, the new ideas were inclusive of the old ones.  Einstein’s physics and quantum mechanics, when applied to Newtonian problems, yield the same results.  Moreover, we still use Newtonian physics in industries like engineering, where medium sized objects move nowhere close to the speed of light.

The new marketing paradigms are very similar in this way.  Social networks, chaos and memetics are, in most cases, perfectly compatible with what we already do well, but will also help us with plenty of issues where our current performance is less than stellar. As digital technology continues to change the context in which we operate, these three frameworks will only become more central to what we do.

Social Networks

Social Network theory, in it’s current form, has only been around for about a decade.  Even so, it has become incredibly important in fields ranging from crime prevention to ecology. It’s ability to describe connections between entities has shed light on so many important topics it would be impossible to list them here.

Unfortunately, much of the talk about social networks has focused on social media and that has created a lot of confusion.  More importantly, the focus on social media has inhibited the adoption of social network concepts into conventional marketing, where they can do the most good.

The true value for social network theory for marketers is how well it explains how ideas spread.  Moreover, because the theory is essentially a mathematical framework, it will go a long way toward replacing myth and conjecture with logic and testable hypothesis.

This is still a very new area and we still have a long way to go before we truly understand the implications.  Nonetheless, there are already some promising approaches.  Among the most prominent is Big Seed Marketing, championed by Duncan Watts.

Chaos

Ever since the time of Gauss, in the early 19th century, we’ve been trained to think in terms of bell curves like this one:

Normal Distribution

The bell curve assumes that things will “average out” because values tend to be evenly and predictably distributed around an average.  It’s important because it forms the basis for modern statistics which is used in financial models, forecasting, risk analysis and other essential business functions.

Therefore, most of the tools we currently use to analyze our businesses are based on the notion that the world is random, but predictably random.

More recently, Benoit Mandelbrot and others started noticing that Gaussian bell curves didn’t explain the world as well as standard statistical methods assume.  In fact, most things like income distributions, product sales, language patters and, yes, social networks follow a 80/20 rule or power law that looks like this.

Power Law Distribution

This is what chaos looks like.  Notice how the mean (represented by the vertical line) is no longer in the center, but skewed outwards.  This is because in a chaotic world there are far more extreme values then in the random world of Gauss.

Randomness is like a child, haphazardly filling in the lines of the bell curve.  It’s not systematic, but it is fairly predictable.  Chaos is like a felon robbing a few banks and then retreating to the relative tranquility of his hideout only to return, get drunk and break some windows.

In the past, the difference between randomness and chaos went mostly unnoticed.  However, as the latest financial crises showed, our world is governed by extreme values.  Therefore we need to change our assumptions when we analyze data and make business decisions to take chaos into account.

I touched on some ideas about how to do this in an earlier post about social network analysis.

Memes

While the paradigms of social networks and chaos give us new mathematical and conceptual structures about how ideas travel, memetics helps us understand the ideas themselves.

The idea of memes has its roots in evolutionary genetics.  The term was first coined by Richard Dawkins in his book The Selfish Gene.  He invented the term to describe the way ideas, much like genetic traits, need to be replicated in order to prosper.  A successful meme is one that is widely shared.

Like genes, memes spread when they are well suited to their environment and their adaptations can be very sophisticated, even counter intuitive.  For instance a political meme having to do with economics might combine with an altruism meme and result in a meme about politicians kissing babies.

Like social networks and chaos, the meme paradigm isn’t a single concept, but an entire framework of concepts that help us understand ideas as entities themselves rather than just a linguistic way of describing other things.

An Expanding Marketing Universe

The conceptual universe, like the physical one, is constantly expanding.  In a similar vein, just as sometimes stars collapse into black holes, some seemingly sound concepts prove to specious and must be discarded.

However, those are rare events.  Order increases with entropy over time.  The new order does not wash away the old, it augments it and, in many cases, strengthens it.  While we need new ideas like quantum theory and relativity to make things like GPS satellites and iPods, we still use Newtonian principles to build bridges.

So we can adopt the new paradigms without forgetting what we already know.  More importantly, we must do so.  For most of the interesting and important problems we need to solve in marketing today, social networks, chaos and memes will play an indispensable role.

– Greg

Note: On October 14th, only three days before I posted this, Benoit Mandelbrot finally succumbed to pancreatic cancer at the age of 85.  It’s an enormous loss and  his impact on how we see the world can’t be overstated.  I’ll try to get a post out later this week, but for now here’s a TED talk he gave in February, 2010 outlining his life’s work.

10 Responses
  1. October 17, 2010

    Hey Greg,

    Great post as usual. One other thing, thought that I’d like to put on the table concerns your last paragraph with the statement – “So we can adopt the new paradigms without forgetting what we already know.”

    As I look at the last two words “already know” it brought me back to a recent interview I saw with Chilean economist Manfred Max-Neef. He touched upon some very powerful ideas. One simple statement of his that I agree with- “we know alot, but we understand very little.

    As you mentioned early on there are tectonic shifts at play in marketing. That marketing is changing because consumer behavior has also shifted as well (the financial wealth, assets and situations of many have dramatically changed). If household earnings have decreased, spending behavior changes, which impacts business, which impacts commerce, which then impacts economy. What drives economy is changing.

    In my opinion if you aren’t exploring what drives economy (and the paradigm around that) then you won’t be able to re-imagine what your marketing needs to be in a post-industrial driven economic environment. For the last 50 years or so (in the US) conspicuous consumption drove the economy and that ‘center of gravity’, I don’t think, is sustainable. This kind of economic behavior will not determine the economy of the future. I think this is also part of the new paradigm that marketers need to really understand.

    Economy is based on the nature and type of commerce that transpires. Marketing can only be successful if it speaks to and supports the kind of commerce that fits the conditions consumers find themselves in. I’ve personally not been aware of many marketing conversations delving into why the DNA of the market is rearranging itself.

    Also if you are interested here is the interview with Manfred Max-Neef – http://www.democracynow.org/2010/9/22/chilean_economist_manfred_max_neef_us

    Greg Reply:

    Thanks Rasul.

    You make a very good point. The entire world is deleveraging. However, I do think this is a short to medium term phenomenon rather than a true paradigm shift. It’s definitely a change in market situation, but won’t fundamentally change how the market works.

    Another change that I didn’t mention is the change in marketing planning – from channels to objectives. I have an upcoming post about this.

    – Greg

  2. October 18, 2010

    Very true, indeed!

    As Everett Rogers has found out in his diffusion on innovation studies spanning half a century, people can be divided in to five categories: innovators, early adopters, early majority, late majority and laggards. People embracing new technologies and paradigms are either innovators or early adopters. However, these first two adopter categories form only 10-15 % of the population. This combined with the concept of homophily (tendency to surround oneself with similar people) can create a flawed perspective within a sample population of the overall situation: using twitter to spread the word of new paradigms is like preaching to the choir. This division is more the property of the population more than the individual.

    Like Greg said, multiple paradigm shifts are going on at once and people are trying to apply the results of more advanced paradigm shifts directly to new areas. The combination of different paradigm shifts can create confusion and frustration that the gurus can exploit. If a guru tries to push the paradigm shift straight to the revolutionary science phase, messy results can be expected. Understanding the linearity of the process of paradigm shift and different adopter categories calls for the virtue of patience.

    Also I totally agree on the social network=social media confusion. I try to comfort myself that this brings attention to the importance of connections and the structural properties of everyday life: the idea of representing people as nodes and edges is not that far of leap when you have can see your friends quantified in Facebook. SNA is getting some press…

    -Olli

    Greg Reply:

    Olli,

    Thanks a lot for a very insightful comment.

    btw. I checked out your blog and it’s fantastic! For everyone else, Olli writes a great blog about social network analysis at http://verkostoanatomia.wordpress.com/

    – Greg

  3. October 20, 2010

    Ah, thank you for this. It’s so refreshing to read about media, physics, history, and possibility all in the same article.

    For just the reasons you mention, Telmar has focused in applying Media Fundamentals to Social Media. The trend is away from Reach & Frequency and towards metrics like ‘Impact.’ While we agree that a new era means new metrics, we also believe that throwing out fundamentals is not useful.

    Yes, if Einstein was included in Quantum physics, then include media fundamentals in Social Media chaos. You still want to know how many people you’re going to reach.

    Social Media is just part of Media 360. http://www.telmar.com if you want to know how we apply this.

    Greg Reply:

    Thanks, Sarah.

    Good luck to you and Telmar!

    – Greg

  4. October 22, 2010

    Were you listening to my conversation at Starbucks? I was lamenting over how to stay current in this marketing universe with a very smart friend. We’re both in our 50s. One a creative. One a strategists. Do we give up now and start working on how to be old people? I’m not ready to give up. Besides, there are still a lot of me willing to spend money on products and services. I’m willing to listen and learn from my contemporaries’ children (and grandchildren). And it seems they’re willing to do the same considering the number of baby boomers in the marketplace. I just wish there was a handbook 🙂

    Greg Reply:

    Phyliss,

    I’m right behind you (in my 40’s) and I know what you mean. Fortunately. having spent a lot of time in the digital world, I can attest that everybody else is just as confused as we are:-)

    – Greg

  5. November 30, 2010

    Greg,

    We seem to think along the same vein. So I hope you don’t take exception to a couple of corrections.

    Einstein’s General Relativity and Quantum Mechanics have never been reconciled. Their scales are so different that no one notices, but there is no experimentally verified theory of Quantum Gravity. Both theories still stand alone. QM never replaced Relativity. Einstein believed QM, but didn’t like the formulation as a statistical model. However, it was his work on the photoelectric effect that was the first experimental verification of QM.

    Randomness is not being replaced by Chaos. There are lots of over simplifications should be chucked, like using the the bell curve to describe anything random. It’s far to easy to say that “everything is normal” instead of “the distribution of the sample means from any distribution converges in probability to a normal distribution.” The first is popular jargon, but the second is a statistical proof.

    Chaos, ironically, is completely deterministic. It is just that the equations that describe chaotic systems are so sensitive to initial conditions that vastly different results can be obtained from tiny changes. Many systems that incorporate feedback become chaotic if the feedback constant is close to 1. Weather, stock market, climate change, and chemical mixing are examples. Both imprecision in calculation and random fluctuations can send a chaotic system in wildly different paths.

    Greg Reply:

    Hal,

    Thanks for your input.

    – Greg

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