Social Media, the Future of Market Research?

This article examines the market research capabilities of social networking sites including Facebook, Myspace and Linkedin. SIS International Research details the pros and cons of using these sites to survey specific targeted audiences.

Facebook is truly an example of a social networking site that has innovated the way the world’s youth socialize on an unprecedented daily basis. Increasingly, this site and other Social Networking Sites are providing useful business solutions not only to advertisers, but also to market research companies and marketing services companies. Beyond this, these companies are revolutionizing the way companies communicate with their customers.

Facebook targets its markets effectively by ensuring that people register with Facebook’s university, school, organizational networks to help verify the identities of its users. This has helped it to avoid much of the criticism in American media leveled on Myspace for its perceived lack of protections against sexual predators.

Rupert Murdoch’s Myspace is concerned. Despite the fact that Myspace is attracting over 230,000 registrations per day (double Facebook’s registration numbers) and is the sixth most visited English website, Facebook’s registration of the highly targeted 18 – 24 membership age base is growing rapidly. Facebook is attracting college students as well as companies, using its services for their own purposes through Facebook’s opensource software. Not surprisingly, Rupert Murdoch announced on October 18, 2008 that Myspace is planning to convert its software to open source to compete with Facebook.

However, in the research market, Facebook is one step ahead of its formidable competitor. The company is not only opening its interface to Market Research firms, it is targeting them. First, an analysis of Facebook’s Market Research capabilities can provides insight to solutions and the overall online market research trends.

 

Benefits and uses of Facebook for Market Research

• Real-time results (within an hour)
• Highly targeted market of 18 – 24 year olds
• Specified demographics, as polls only target members with vendor’s
• Simple interface and easy-to-use
• Poll network of over 30 million users for around $26 USD.
• Opensource software for companies to develop proprietary “applications” to offer users. This gives companies a piece of the networking phenomenon.
• “Groups” allow firms to actively and passively recruit respondents

 

Limitations of Facebook Online Polls:

• Misrepresentation
  • The question must be asked: How reliable is the information when users can, at the click of a button, change their demographic information while research clients have little ability to screen respondents?

• Sampling & Methodology
  • Facebook’s surveys seem to provide limited feedback to companies needing detailed and reliable research.
  • Are the right people answering?
  • Can we base decision making on these results?

• Single-Response Poll Format
  • Only one response can be selected per question by the respondent.
  • This limits the type of data that can be elicited. For example, how can researchers ascertain all the different media channels accessed in a day?
  • If these limitations are consequential to research quality and objectives, then these concerns should be voiced directly to the client, or this methodology should be discarded.

 

Recruitment: Respondents and even Employees

Other potential uses abound for market research firms including the recruitment of respondents for focus groups. Facebook essentially offers Market research professionals:

• Passive Recruitment:
  • Recruiters create “groups” for interested young respondents. Companies can send messages to all group members at the click of a button and motivate respondents to attend.

• Active Recruitment:
  • Research firms can search for potential respondents according to their age, location, personal interests, even down to movie preferences.

Clearly, Market research firms can use Facebook to target both consumers and business executives. But given the increasing competitiveness of the Market Research and Competitive Intelligence Industries, to what extent can Facebook be used for employment recruiting and other competitive activities? Companies could find it simple to “poach” employees from competitors in local markets with a simple search. However, poaching poses ethical dilemmas and requires further reflection as to the limits of such competitive behavior.

 

Social Networking Wars

Many other social networking sites companies are innovating their products to involve market research services and to redefine the way that companies transact and communicate with customers.

Cotterweb.net- Research Tool and Brand Communicator?

Cotterweb, founded by young adults, is capitalizing on the social networking phenomenon. The company’s goal is to create a go-to-interface whereby consumers go to interact with companies. On its website, companies offer market research surveys, product trials, advertising and many more. It offers incentives with “Inbox DollarsTM” and rewards for consumers who use the company’s services on Cotterweb. However, given the nature of the registration process, it is still difficult for researchers to positively know the identity of those whom they survey on this site.

What is significant is that not only does Cotterweb allow companies to participate in transactions with consumers, but also it allows brand communication. Cotterweb currently boasts 3.5 million users and strong growth.

 

Linked In.com - An Online Networking Dinner Party?

This professional networking site had 15 million people October 2007 in 150 industries. The site’s main premise is the creation of a large social networking environment that not only emphasizes job postings for executives and professional networking, but also includes personal relations with friends and schoolmates. Linked in is not directly geared toward researchers, but given the nature of its website, it could potentially allow for recruiting of executives and B2B research.

Furthermore, in a service called “Answers” consumers can ask questions about industries, companies or anything on the minds of users. Thus, similar to Cotterweb, it is establishing a new form of communication between executives and other people in their networks. This way, executives receive expert opinions or advice on key issues that they specify while the experts receive notoriety.

 

Myspace.com - Preeminent Marketing Destination for Preteens and Baby-boomer?

Myspace is a social networking site for everyone, and has earned a reputation for attracting mostly younger teenagers, as well as older individuals. It offers vast services to users by allowing them to download to their profiles entertaining applications, music, movies, pictures and video. It has rapidly expanded into other forms of media and communication, such as blogs, TV on-demand and classifieds. It also caters to the phenomenon of young people broadcasting themselves, their movies and music to become instant Internet superstars. Essentially, it is a comprehensive virtual society, limiting no one and offering almost everything.

Despite this market positioning, Myspace.com is not emerging as strongly as a partner for market research firms. Moreover, its registration process would make it difficult to track and accurately detect the true identities and demographics of respondents.

 

The Future: A Convergence between Market Research and Social Networking?

Several trends are evident in the research market:

1. A general trend of focus on new forms of web research, but an overall reluctance to embrace or trust such forms
2. Social networking sites are diversifying to provide services to various industries, e.g. Market Research

Facebook.com has acknowledged that it is continually working on its market research service. For instance, it is trying to add more response options to poll questions in the future. It will be interesting to see whether these services will become innovative forms of market research that offering dynamic tools, or rather a variant of web surveying. While Social Networking Sites are presently emerging into basic Market Research services, it largely remains to be seen whether these research services are worth their value for customers.

Among all social networking sites in this analysis, Cotterweb has various controls to increase the quality of web surveys. While less frequented, it is growing rapidly. LinkedIn can offer solutions for recruiting executivies for jobs and in-depth interviews. What is particularly significant among the social networking sites is that Facebook is opening its interface to software and other companies, which have already created “Applications” for users. Myspace is following this trend. Ultimately, this allows for companies to invent their own application to lure users to download such applications to their profiles. With this strategy, Facebook appears to have powerfully maintained itself as a go-to-place, even a playground, for the young adult, and a curiosity for market research professionals.

 

This article was written by Michael Stanat, Research Executive at SIS International Research. Visit the company website at www.sismarketresearch.com.