Socionomics & The Wave Principal

One of my favorite parts about blogging is that thousands of people way smarter than me read my blog and give me feedback. Recently I was sent a couple links about socionomics and the wave principal.

Information markets influenced by a wide array of marketing techniques and publishing formats are likely also bound by the same sort of wave principals that guide economic markets.

The general trend (online or off) goes something like this...Politicians, corporations, and other powerful institutions abuse language, cook the books, and game rating and ranking systems until eventually the fraud can be held no longer. The bottom falls out of a near perfect market. Then the market gets new guidelines and regulations, which start getting gamed before they are even drafted.

The online world largely reflects the offline world, with a bias toward the edges (as smaller markets can be served online, we are more inclined to follow things that reinforce our worldview, and most modern measures of relevancy are aligned with things that easily associated with signs of bias). Here are some examples of how wave theory applies to search, publishing, and monetization.

• Companies and individuals aggressively optimize conversion rates until one day that form of optimization goes so far that some consider it fraud, as reported by a guy who was flamed in the last Internet bubble.

• Every effective marketing method spreads, gets abused, dies down, then is reformatted and reused again under another name, but touches the same emotional triggers.
• Each new social network is easy to game. After early adopters are ingrained in the hierarchy, the story spreads about how easy it is to game, then the ROI is marginal at best for the latecomers.
• All the new social networks spread out consumer interest, so now Google is investing into trying to pull it back together.
• Google trusts links so people buy them. Google starts filtering some obvious bought links and tries to manipulate public perception when they find that they can't do it well enough to put a dent in the link buying market.
• Most new sites are spammy. Google trusts old sites so people buy them. etc.
• You publish news of how successful a site is. Either Google tries to kill it or dozens of people clone it.
• Auto-generated content is getting more sophisticated and trusted sites are pumping out garbage content to monetize their authority, so Google requires more link equity to keep your content indexed.

Measuring relevancy and manipulating it are both forward looking and reactive processes. As is creating a self-funding brand in a fast changing market dominated by misinformation and information pollution.

[Update: Great follow up post at Squareoak.]