Drip some ink on a piece of fabric and watch what happens. Depending on the type of fabric, the blot spreads at different speeds along the warp and woof. The pattern that appears reveals as much about the fabric as it does about the ink. What does this have to do with social media? Here is a picture of a chain email diffusing through the social fabric, created by Cornell researcher Jon Kleinberg (picture taken from a Cornell University news article).

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In this process, merchanidsers have been comparatively passive. In the check I made of air-conditioner ownership in Philadelphia, I found only two cases where the original suggestion to buy had been made by a salesman; in almost all cases the initiative in the purchase had been taken by the consumer himself. To a surprising degree, retailers -- and most manufacturers, for that matter -- fail to appreciate the power of these word-of-mouth networks. Few tend to use "outside" salesmen to speed up the process, and those who do tend to have the salesmen scatter their calls over a wide area rather than work on natural neighborhood groupings... [a footnote continues] Many manufacturers talk about the cut-price problem as if it were due largely to the machinations of discount houses...What has been happening is that the consumer has been taking over part of the selling burden historically alloted to the retailer...The real selling job, in short, is done before the customer comes into the store. Guided by the group, the customer already has determined almost everything about the purchase -- including the fact that he will make it-- except the price and a few minor options; he is earning the price cut, and whether manufacturers like it or not, he is going to get it.

This surprisingly modern analysis, which could apply to IKEA, remember, was written in the 195os, when TV was in its infancy. Howard Armstrong, the iconoclastic inventor of FM radio, had just committed suicide (1954) after losing his legal battles with RCA. Brownie Wise was just inventing the Tupperware party. Whyte describes how the minority of smart WOM marketers operated back then:

With mingled admiration and horror, I heard a door-to-door selling expert explain how a smart merchandiser could exploit the group contagion. First, he said, he'd make a special effort, even if it involved a slight loss, to place air conditioners in the key homes in the neighborhood. Then, after the rest had succummed, he'd leave them alone for a while. Just about the time they would be feeling guilty that there wasn't a conditioner in the childern's room, he would return to trigger the next round of purchases. "All you do now," he said, "is pull the trap. Here's the way I would do it. I'd go in to 'check' the first conditioner, and while I was about it I'd mention to the couple that my wife and I had just bought a second conditioner for the little ones. I'd pause and let that hang in the air for a while. Then, very quitely, I'd say, 'You know, Mr. and Mrs. Jones, now my wife and I really sleep nights.'"

So much for Malcolm Gladwell and his apparently new theory of the tipping point. Whyte was chronicling the same phenomena 50 years ago, as canny salesmen figured out how to leverage WOM and predictable groupthink to drive adoption with domino models and surgically precise nudges.So what stopped the movement in its tracks? Why did WOM and virality need rediscovery in the 2000s? What happened was the few-decades long age of broadcast, a form of cheap mass influence that could be used with so little marketing creativity that it derived its name from the inefficient model of pre-Industrial age agriculture. To "broadcast" is to sow seeds by randomly scattering them in a field. Jethro Tull (1674-1741) perfected the seed-drill, a far more efficient way of sowing seeds (tellingly, at the time, it aroused fears of job losses among farm workers). Mass influencers were not unaware of this waste. John Wannamaker famously noted, well before the Golden Age of broadcast, "Half the money I spend on advertising is wasted; the trouble is I don't know which half."The reason they could be this wasteful of that most precious commodity, human attention, is a brittle construct nearing the end of its design life, known as the 'market segment.' Broadcasting relied, for its effectiveness, not just on the technologies of delivery, but on the social structure that allowed the 'market segment' to exist as a meaningful idea.The Rise and Fall of the Segment, and the Legibility of MarketsWhat happened in the Golden Age of broadcast between the 60s and the 90s (a term I'll loosely use to include mass circulation print, not just TV and Radio), was that three social forces temporarily domesticated WOM and viral dynamics, and conspired to make marketing easier than it naturally is. The Tupperware party, the ancestor of modern 2.0 marketing, was reduced to a marketing curiosity, meant for a fringe type of product, by the Super Bowl commercial.

These forces fed on each other. For example TV and Hollywood creating one-size-fits-all grand narratives that further homogeneized communities, making them even more susceptible to broadcast. This virtuous cycle created the stable echo chamber known as the market segment. The idea of an identifiable, localizable, homogeneous group of consumers, who enforced and policed the homogeneity so strongly that WOM/viral effects became predictable and contained. Not only did everybody see the same commercial on TV, but they talked about it within a predictable group of people like themselves and created en bloc responses. The result was that the only possible effects were wholsesale amplification through echoes, followed by adoption, or wholesale rejection. 1 or 0. An entire complex culture of buying reduced to a geographic map that could be broken down into segments marked 1 or 0. For a few precious decades, the fog of human complexity lifted, and human buying behaviors organized themselves in ways that were, in the words of James Scott (Seeing Like a State) "legible" to the coarse eye of the large organization. The market became legible as a very coarsely pixellated black-and-white geographic map. Something even the primitive visual apparatus of the organizational brain could parse.Think about it. This actually makes no sense at an absolute level. What exactly is a market segment independent of the product that induces a segmentation? Why should constructs like "suburban Midwestern white female" mean anything in relation to a car model?Demographic and socio-psychographic profiling have been serendipitously effective tools for several decades. Tools that have enabled marketers and other persuaders to not think about the problem of mass persuasion in all its richness. This effectiveness has been a function of these 3 factors, all of which are in full-reversal today. The direct line of sight is vanishing; society is trading surface area for volume. The largest mass audience is much smaller than it used to be, which means messages that do get through to everybody do so indirectly, soaking in from the listening 'surface'. Second, socio-geographic mobility has accelerated to the point that the homogeneous echo chambers are gone. You cannot predict individual reactions to messages by locating the individual on a map and in a neighborhood. Making the map more fine-grained isn't going to help. Worse, it isn't just that these homogeneous "neighborhoods" have gone virtual. They just don't exist, period. This is because each of us now belongs to dozens of overlapping virtual networks rather than one all-subsuming geographic or virtual community. The fact that I share a specific group context with somebody on Facebook, prima facie, tells you precisely nothing about how I will react to a message, because that affiliation accounts for just 1% of my identity, not 100%. Further analysis may yield some intelligence, but you can't hope to just use that data bit in simple ways.Goodbye Segment, Hello InkblotTaken to its logical extreme, the logic of 'segmentation' gets us to the somewhat ridiculous idea of mass personalization/customization, the idea that the market can be profiled, sliced, diced all the way down to market segments of size 1. The idea of mass personalization is actually applicable only to a small group of power users of a small group of products and services. The vast majority of economic activity will remain aggregated in larger chunks. The problem isn't that the chunks of the market are getting tinier. It is that they are becoming less visible and are bleeding into each other.Think about it. Is everything you own customized? How about 90%? 10%? Yup, that's right. Very little is actually customized. I buy commodity rice and ball-point pens, branded, but mass-produced cameras and cellphones, and so forth. What has changed is that it has become very very hard to predict what total basket of goods and services any of us will consume. In terms of total buying profile, we have all become very unique.Some marketers are getting the idea. The authors of "Trading Up" get that it isn't about mass customization/personalization everywhere. It is about selecting where to go personal/customized. Our 'trade-up' choices, instead of bonding us to a single cultish group, pull us centrifugally towards many, and our loyalty to each is very limited and contextual.So what replaces the idea of the relatively product-independent market segment? It is the highly product-dependent Inkblot. Conceptually, this is the social grouping created by just letting WOM operate naturally and watch where your product or service actually goes, and to what use it is actually put.Practically, however, you cannot operate this way. You cannot find your product/service inkblot by a priori analysis or by the risky strategy of letting your product/service "find its market" after launch (witness the Segway). But you do have to discover and size your market before investing too much in developing it. This then, is the real reason viral, social media marketing is valuable. They are not tools of cheaper-than-Superbowl-ad promotion and persuasion. They are tools of Inkblot discovery, like radioactive tracers. Which brings me to diffusecasting, the process of discovering and mass-influencing illegible, foggy markets that cannot be found on a map (geographic or virtual), predicted through psychographic profiles or inferred reliably from the intent of product/service design. At least, not for much longer.The Seven Laws of DiffusecastingA lot of this section are my analyses of empirical observations conveyed to me by Jeremy Epstein. I am totally an armchair guy myself. So a major hat-tip due to to @jer979

As always, I am just trying to stir the pot here to invite debate. This isn't a complete or rigorous analysis by any means. Heck, I am not even a marketer. But this is just the beginning. A great deal more needs to discovered about diffusecasting. I am personally fascinated by the idea of a 'diffusion editorial' -- the discourse that emerges around a single viral probe into a market. I might blog about that sometime.Venkatesh G. Rao writes a blog on business and innovation at www.ribbonfarm.com, and is a Web technology researcher at Xerox. The views expressed in this blog are his personal ones and do not represent the views of his employer.