Since the process is totally automated errors can occur. For example when an old news item about United Airlines filing for Chapter 11 bankruptcy protection got picked up from The South Florida Sun-Sentinel’s website by a financial newsletter it got pushed into the “most-viewed items” section”. Google news gave it a current datestamp and courtesy of the Bloomberg wire service it was syndicated to the markets. The stock briefly crashed from $12.30 to $3 before the error was spotted.

[Update Saturday 12th September] The Times of London has a good follow-up to this story, tracing the exact sequence of events and drawing attention to the role played throughout by automated systems. Automation caused the story to be listed as the most popular on the South Florida Sun-Sentinel website, Google News picked it up automatically, traders responded to the headline, Bloomberg cited the headline when the stock started moving and automated selling programmes did the rest. Anyone who stopped to actually read and understand the story (complete with references at the stock price of $0.97 which clearly signalled its inaccuracy) would have known the story was old. But they would have been the losers, because every other system was in full “sell” mode.

When we first started pitching to institutions in the City of London a few years back a big fund manager said: can’t the analysis of stories be totally automated? We replied that it could only ever be semi-automated because human intelligence was required to interpret the patterns of sentiment, volume and authority. Part of their questioning leaned on the idea that automated tools for understanding conversations could be linked to automated trading tools. This is a dangerous idea – as the United Airlines story proves.

This is a profound remark. The blogosphere indeed functions as a marketplace in information, where spam takes the place of hype, and where a measurable consensus emerges around which companies have good products, and which ones are poor. Where a company’s employees, channel partners and customers spill the beans on how the company is doing 24 hours a day, 7 days a week. The blogosphere can be seen as “setting the price” of goods by forcing those with a bad reputation to discount in the search for buyers. Conversely those with a good reputation can charge a premium.

The interesting thing about this marketplace is that – unlike the stock exchange – the numbers are very hard to extract. You have to use social network analysis, natural language processing and statistical profiling to establish authority and sentiment. Having said that, these techniques exist (we and others are using them) and over time Wall Street and The City will track reputation indices as avidly as they track Standard and Poors ratings.

“What are people saying about my brand in blogs?”

“Can you help me monitor that?”

We say: we can help you monitor blogs, but first you need to do to help us define the questions you want answered. Monitoring blogs, review sites and messageboards on its own gives you large quantities of information, but few answers that can help your business. It is easier to make a business case for spending on online research and analysis if you can be pretty specific about the question that you need to have answered and about the relationship between that question and the business’s bottom line.  These are the questions that we suggest the client starts with:
Question 1: “Why do people choose my product?”

Question 2: “Why do people choose my competitor’s product?”

Question 3: “Why do people recommend my product to their friends?”

Question 4: “Why do people recommend my competitor’s product to their friends?”

Questions 1 and 2 may seem at first blush to resemble questions 3 and 4. But actually they are dissimilar. When someone recommends a product they will often choose a reason that says something about themselves. People will rarely say: “I chose this product because it’s cheapest”, but they may often say: “I chose this product because I care about the environment”. Conversely, why people actually buy a product is often around a combination of product features, reputation and price.

(Reputation and price are in some measure inversely related. Products with good reputations generally achieve that reputation by good service. Good service costs money and although consumers are tempted by cheap offers, they know that “free broadband” generally carries a cost in poor customer support. We recently completed some detailed research in this area which shows that brands with good customer support can keep their prices higher for longer than their competitors. )

All these questions are answerable from online research, and we can put numbers against the characterisitics of a product which are most likely to drive adoption. Those numbers have direct benefit to a key hiearchy of stakeholders within the company:

a) the product managers suddenly know which aspects of the product are key to marketing success (and which need most attention);

b) the marketing managers know what is the key product strength to push in relation to the corresponding weakness of a rival’s product;

c) the word-of-mouth marketers and PRs know which messages are most likely to drive viral adoption amongst users and can devise appropriate campaigns.

With this in mind, we designed a one pager Your 3-step guide to the blogosphere, (PDF download 70k) which we distributed at the conference. The HTML version follows …

1. Get started:

- Go to Technorati, the biggest of the blog search engines.
- Enter the topic you are interested in.
- When you find a blog that appeals to you, you can use Google desktop (a quick download) to automatically notify you when there is new content.
- Or save your search as a Watchlist, and get relevant information from a variety of sources.

Blogs to explore:

Boing Boing: A Directory of Wonderful Things A lively commentary on events, the world’s most popular blog has 66,000 links from 22,000 sites.
Engadget Well-written technology reviews.
Dooce Personal blog by Heather Armstrong, who got sacked for blogging about her work colleagues
Public Relations Onlinefor discussing how businesses can best understand and use consumer generated content
British businesses using blogs:

The Guinness blog – bought to you by the Guinness branding team
The Cadbury’s Creme Egg podcast – with Kate Thornton
The Honda blog launched 28th February 2006, already has 107 links according to Yahoo

2. Join in

- Go to Blogger to create a blog for yourself. It takes about three minutes and is as simple as setting up a Hotmail account. Your blog will have the format http://yourname.blogspot.com.
- If you want to set something up with your own domain name for business, talk to a blog creation specialist like Market Sentinel.
- If you would like to comment on someone else’s blog posting, click on comment and complete the form. Sometimes (in Blogger and Moveable Type) you have to register in order to comment – this is to protect bloggers against spam comments from advertisers.
- You can comment on a blog posting on your own blog and put the address (http:// …) of the original comment into the “trackback” section of your blogging software. This will mean that your blog post is automatically linked to the blog you are commenting on. This facility has been abused by spammers, so most bloggers check trackbacks to prevent spam.

3. Get your blog noticed

- Optimise your blog for the subject matter. If your blog is about skincare, then put the word “skincare” into the name of the blog, and into the url: www.skincare.co.uk
- Update your blog regularly, at least once a week and ideally two or three times. Search engines visit sites according to how often they find new content.
- Tag your content. When you make a post, use the “category” or “tagging” facility to tell everyone what it is about. Someone on Technorati will be searching on the tag “dry skin”.
- Use Technorati or Google blog search to find out who else is writing about your subject matter. When you make an interesting new post, politely email them with the url and suggest that they might be interested in reading what you have written. You will make some new friends, and you might benefit from some links!
- If you are hosting your site, make you “ping” all the right ping servers when it is updated.

Market Sentinel works with top brands like Yahoo! Europe monitoring blogs and advising on marketing response.

For more information on how to integrate blog communications intoyour marketing strategy, call +44 (0) 20 7793 1575 or mail simon DOT rogers AT new DOT com