This interview with Consensus Point’s CEO, Brad Marsh, was originally published on ZappiStore.com.
To celebrate the launch of Huunu Prediction Markets, the industry’s first fully automated prediction markets tool, ZappiStore caught up with Consensus Point’s CEO, Brad Marsh. In this interview, Brad dives into the Huunu methodology, in-market validation, and some of the most common myths surrounding prediction markets.
Welcome Aboard, Brad! What should people who are unfamiliar with Prediction Markets know about the methodology and the algorithm supporting it?
“Thanks for the warm welcome. We are very excited about our new partnership with Zappi. At its core, Huunu is a behavioral science based insights tool that engages participants to bet tokens on future outcomes about how a target audience will behave, or how a product, service, or brand will perform.
Rather than asking respondents to answer a survey question about their own behavior and preferences, Huunu’s validated prediction algorithm aggregates the collective judgment or “wisdom” of a target audience to accurately and efficiently predict future trends, events, and market preferences.”
What’s the most common misconception about Prediction Markets?
“The biggest misconception out there is that prediction markets are unproven and lack validity, when nothing can be further from the truth.
Prediction markets are a highly validated research method with broad research applications in predicting trends in consumer behavior, new product development, and creative evaluation. We’ve been in the prediction research space for over a decade and our Chief Scientist, Dr. Robin Hanson, is widely considered the ‘father of prediction markets’.”
Myth 1: Prediction Markets lack validation.
“When I made the move in 2015 from Consensus Point customer to CEO, the company had great technology and analytics, but lacked industry and in-market validation, which is critical to credibility and trust. Over the past few years, we’ve conducted extensive customer and self-sponsored validation including correlation to traditional survey methods, side-by-sides vs. industry currency approaches, and perhaps most importantly, in-market consumer behavior, trends, and events. Moreover, we’ve shown probability metrics add even more power when integrated into tried and true analytic techniques like price sensitivity, TURF/LOT, and volume forecasting.
In addition, Huunu, has developed a strong following among insights and innovation leaders looking to identify and size truly disruptive ideas and products. Clients tell us that the unique combination of System 1 and System 2 elements, simply do a better job at identifying the breakthrough potential of a new idea compared to traditional techniques.”
What other misconceptions do you and the Consensus Point team hear in the marketplace?
“Another common misconception is that prediction markets only apply to early stage concept screening or to a ‘Gen Pop Crowd’. While Huunu definitely offers advantages in the early stage idea and concept space, it works just as often in downstream optimization efforts, where a client is looking to quantify potential or maximize trial through refinement of marketing elements or the value proposition.”
Myth 2: Prediction Markets are only fit for early stage screening or gen pop studies.
“While it provides quantitative probability scores and norms on performance, Huunu also gathers deep qualitative rationale as participants defend their bets with verbatim commentary. You truly get the “why” behind the “what” in the consumers own words to provide context and depth around the predictions. In terms of the audience we recruit for each market, we focus on the broadest audience possible that could influence a brand’s success. As a rule of thumb, if a consumer group will be exposed and react to your marketing or possibly buy your product, then they should probably be included in the audience. What is critical, is that the participants have reasonable knowledge on the topic(s), and feel some “skin in the game” for the best prediction.”
Is there anything else that marketers and researchers should know when considering prediction market research?
“Behavioral economics has shown that people are just more honest and better at predicting other people’s behavior than their own, and they also prefer to answer questions when they have knowledge or a strong opinion on a topic. Embracing these realities of human behavior just makes sense and yields better results.”
Fact: Automation plus a validated methodology equals Efficient Confidence
“One of the key benefits to our customers of our joining forces with ZappiStore, is what I call Efficient Confidence at scale. Efficient Confidence reflects the notion that shiny new tools in our industry are popping up every-day, and most “fast” and “cheap” solutions offer little to no science behind them, yet most “scientific” solutions take too long and cost too much for broad scale. With Huunu, powered by Zappi automation, we are providing a behavior based and extensively validated methodology, that is now accessible globally to Brands, Agencies, and Insights departments of all shapes and sizes. That’s efficient confidence which will benefit all marketers and their customers alike.”
Huunu Prediction Markets by Consensus Point can help brands tap into the collective judgment of their target audience to predict in-market success, in as little as 6 hours. To find out more, visit zappistore.com.