Emerging Market Tech Series: Social Media, The New Election Predictor?

Many Americans followed the run up to the recent Egyptian presidential election with great interest.  If you were like me, you were perpetually frustrated with the lack of credible polling in the country.  It seemed there was no reliable way to predict the results or to gauge voter sentiment.  Conducting a traditional poll in Egypt would be expensive and time consuming, and, given the current political climate there, perhaps impossible.  This got me thinking about alternatives and as an Internet Strategist with Anant Corporation my first thought was to turn to technology.

While technology cannot completely replace traditional polling you just might be surprised at how close it can come.  There is a huge range of online tools that when compiled and analyzed in their aggregate can provide critical insight to political events where little other quantitative analysis is available.

Perhaps, the best known tool for such online political analysis is intrade.com. Intrade allows users to bet on political events through buying “shares” if they believe a certain outcome is likely.  Just like the stock market, share prices move up or down based on demand and Intrade is able to produce predictions for various events based on market sentiment.  For example, Intrade calculates that there is a 45% chance that Bashar al-Assad will not be president of Syria by the end of this year.  It gives an Israeli air strike against Iran a 32% percent chance of occurring and Chavez a 78% chance of winning re-election in Venezuela.  Though betting might seem an odd way to analyze political events, Intrade has a surprisingly strong track record.  In 2004 they correctly predicted every state in the U.S. presidential election and in 2008 they missed only two states.

Intrade.com is what I would call a “secondary market” for analysis.  It aggregates information from people around the world who may or may not be involved in a specific political event.  There are several other tools that can give analysts a better sense of “primary market” sentiment.  Twitter received lots of press for its recently launched Twitter Political Index that tracks sentiments of users towards President Obama and Governor Romney.

At last look, the index had Romney with a +12 advantage over Obama in terms of sentiment, perhaps reflecting his anticipated convention bump.  The index also tracked sentiment over Romney’s potential VP choices and clearly shows the stock of Rep. Ryan rising over the past several months while several other candidates such as Senator Portman saw their name trend downwards.

The Twitter Political Index is powered by Topsy, which has a paid version that gives robust analysis for search terms.  Traditionally this tool has been used for market research by corporations, for example to track sentiment on Nike vs. Adidas.  However, it can also be a powerful tool for political junkies.

The above chart shows online mentions of Venezuelan presidential candidates Hugo Chavez and Henrique Capriles over the past month.  The search has been narrowed to searches conducted in Venezuela and shows Chavez with a fairly consistent lead.

Google Trends offers a similar, though slightly differentiated tool.  It gives you excellent insight into search volume by language and region.  Thus, you can tell that Chavez is not only mentioned more, but he is also searched for more.  An additional, albeit more crude, method of analysis is to compare the followers and friends of political leaders and track the engagement of those individuals.

Admittedly, all of these tools have their limitations – particularly when it comes to developing countries.  Limited internet penetration is the most obvious hurdle and can often prevent statistically significant samples from being gathered.  Various government censorship efforts can skew results and can be difficult to account for.  Finally, internet users tend to be younger and wealthier than the average citizen in most countries.  Controlling for these factors is essential to gathering accurate information.

Despite these obstacles, internet tools for political analysis can help substitute for the absence of traditional polling.  Over time these tools will continue to be honed and sharpened, but some organizations have already had clear success.  Tweetminster predicted UK national election results with 91% accuracy.  The UK market is much less challenging than Egypt or Venezuela, but it is likely just a matter of time until that level of success is replicated around the globe.


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