Anticipative demand and consumer intent prediction

Social economic networks improve the value proposition for both individual and institutional consumers since products and services can be discovered and targeted with greater relevancy.

Rich attribute information posted publicly by social media users (individual and institutional) can be used by marketers and other interested parties (for example, potential employees) to infer the values, preferences, and interests of others. In response, hyper-personalized advertisements may be presented (Reference: Shih, The Facebook Era, 2009).

Hyper-targeted-marketing, recommendations, and authentic product endorsements from friends are some of the ways that social economic networks have improved commerce relevancy.

The next obvious step would be for vendors to predict demand before it occurs, responding to customer intention.

Intention prediction could be accomplished by merging aggregate Facebook or other social media ‘likes’ and comments from high-influence users into purchase intent well before sales transactions. An anticipative demand market could arise.

Traditional economics equations could be further transformed as vendors test large varieties of targeted offerings in cost-effective ways via the internet.

The long-tail of supply and demand could meet in millions of micro-markets, possibly even at the level of individual pricing and individual offerings. Smaller lot sizes means higher margin. There are numerous entrepreneurial opportunities in facilitating product and service generation, production, and distribution at the level of n=1.

Social currency unlocks value for individuals and organizations

Social currency, shared information which encourages further social encounters, is transacted through social economic networks.

From an economic perspective, the role of social economic networks is to unlock and monetize hidden value. This value is mainly in the form of information asymmetry as buyers and sellers hold information that is useful to each other. Both buyer and seller realize greater utility than if the social economic network did not exist.

Social economic networks are impacting both individuals and organizations at the global and local level. Transactions may be between anonymous parties or parties who know each other. For example, in the Groupon / Peixe Urbano group-purchasing model, individuals pre-commit to a purchase to obtain a discount if a minimum number of people participate.

With social economic networks, organizations can unlock intellectual capital (social business intelligence) in ways that were not possible before with tools such as prediction markets (a mechanism for collecting and aggregating opinion using market principles). The concepts are attractive on a global level and can be implemented on a local level with the democratizing power of the internet.

Social economic networks could likely grow in the next several years, particularly in the type of assets created, and in the venues and models for their exchange.

Social economic networks and the new intangibles

Social economic networks are helping to monetize the new intangibles that arise from alternative currencies such as intention, attention, time, ideas, creativity, and health data. Individuals are starting to realize that they have more assets that have economic value besides labor; multiple currencies that are starting to become monetizable.

The new currencies have new measurement metrics for monetization such as awareness, influence, authenticity, reach, action, engagement, impact, spread, connectedness, velocity, participation, shared values, and presence. As market principles become the norm for intangible resource allocation and exchange, all market agents are starting to have a more intuitive and pervasive concept of exchange and reciprocity.

Reputation has always been an important intangible asset, and was one of the first alternative currencies cited; however it was not really monetizable other than as an attribute of labor capital. Now, there are more alternative currencies, such as social currency, that are directly monetizable through social economic networks.

Real value and real assets are being created in social economic networks. For example, products and services have higher value when they are recommended. An information asset that has been generated, largely through crowd-sourced labor, is product and service recommendations. Some examples of these information resources that facilitate shopping include Amazon reviews, Yelp local business recommendations, social shopping sites (e.g.; Kaboodle, Polyvore, StyleHive, ThisNext), and product attribute discovery and dialogue sites (e.g.; Stickybits, ClickZ).