Predicting the future with Social Media.

The Past

How does our online habit such as searching, blogging and tweeting affect the future, is it really possible to predict the future using trend analysis?

This is not some new idea many people have tired over the centuries to predict what the future may hold. Now with today’s technology and the advent of tracking what people do online it has become quite possible to analyse what people are searching, tweeting and blogging today to what may occur in the future.

I am not afraid of the future, for I have seen it today – William Allen White

Scenario

Sounds a bit farfetched I can imagine but take this scenario as an example. On Monday the highest searched item is the soccer world cup, way down the list are various searches for new jobs available. On Tuesday the World cup is replaced with the new twilight movie and now in the top ten is a search for jobs. Wednesday same thing back to the soccer world cup and right behind it is “new job wanted” or “new jobs available”. I’m sure you can see the trend. So say for arguments sake that 50 000 people searched it the first day and the next day 100 000 people followed by Wednesday with a staggering 250 000 people. Couple this with the statistics that the average African household is 4.11 people, that already is a population of 1027500 people possibly being affected by an unemployment increase.  Using the data collected one can ask a few questions.

What is happening, is the unemployment rate on the increase?

Why is it on the increase what attributing factors could account for this?

And the most obvious question,

Are we going into another economic recession?

You may be thinking right about now that to collect all this information would take serious amounts of energy and time but actually the information is already there one just need to collate it into a manageable amount of usable data.

Politics and Twitter

Getting back to the main point everything one does on the internet is traceable from search topics, blog post to twitter feeds. In April this year twitter made it to 55 millon tweets per day around 640 tweets a second. With the Soccer World cup Twitter made a record of 3200 tweets per second.  Most of it is random information and personal bites of information. Yet even with this it is quite possible to make economic predictions.

In 2008 leading up to the American elections Bryan Routledge and his colleagues did a sentiment analysis on tweets during the initial stages of the presidential election relating to Barak Obama and John McCain. They used the data to then asses how people would vote. The results showed that this twitter rating tracked the more formal opinion polls quite closely. Though they could not predict or improve on the accuracy of the polls the work done showed that twitter could be used as a cheaper and quicker alternative.

Finance Markets and Blogs

Predicting the stock market behavior with blogs can be done at least according to Eric Gilbert and Karrie Karahalios who showed their findings at the International Conference on Weblogs and Social Media. What they did was use over 20 million posts from the LiveJournal website to formulate an approximation of the mood they dubbed the Anxiety Index. Basically it measures the amount of times a word appears in a post such as “nervous”. They used this method to forecast the movement of stock for S&P which is a stock market index that has a large amount of public American companies. What Eric and Karrie found was that when there was a spike in their Anxiety index S&P ended the day with a slightly lower stock value than other models predicted.

Sales and Searching

Hal Varian, Google’s chief economist and Hyunyoung Choi wrote an article called Predicting the Present with Google Trends where he took various industries and analysed the data and compared search results to sales. In certain cases there was a significant increase in the accuracy of the prediction ranging from 18% for the car spare parts to housing trends which saw an increase of 12% in prediction accuracy.

May this year Google invested money in to the company Recorded future a company that runs as a web application to predict the future by supplying quantifiable information from the past and the present to predict future trends.  Currently the topics on offer are financial markets, geopolitical news, industry changes, public figures, technology and information security.

As Predicted

The future may no longer be as unknown as we once thought the real question is. Should the ability to predict future trends be available who should have control over it… if anyone? I can imagine if your business is run on future events such as stock prices it would make sense to have the ability to forecast future trends in the market place. Now how about advertising and the way the media presents products to us think about it this way you could be searching or blogging about some product and just as you post your entry you start to immediately see adverts on TV radio and online.

Sounds quite scary yet fantastic at the same time.

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