FreshNetworks Blog

Image by World Economic Forum via Flickr

An article in today’s Daily Telegraph in London (Networking site cashes in on friends) reports that Facebook has plans to monetise in a way that it has been unable to do to date. It’s not advertising or charging for premium services. Rather Facebook is going to get it’s money from a rather more prosaic source: the market research industry.

The social network is trialling features that would allow firms to survey its 150 million members to find out their thoughts on their product or market, get insight into their lives or test new concepts with them. In fact they could test just about anything they wanted. And given the fact that Facebook collects vast volumes of profiling information, they would allow this research to be targeted based on location, gender, age, and just about anything.

The company has been demonstrating the benefits of its new polling feature (called Egnagement Ads) over the last week to some of the most influential business leaders at the World Economic Forum in Davos. It asked a range of questions to Facebook members and were able to feed responses back to those at the Forum pretty much in real time. Engagement Ads are also being trialled at the moment by two firms: CareerBuilder, a global graduate recruitment firm, and AT&T.

As Randi Zuckerberg, Facebook’s global markets director, said to the Telegraph:

I had tonnes of people saying ‘this could be so incredible for our business’. It takes a very long time to do a focus group, and businesses often don’t have the luxury of time. I think they liked the instant responses.

We’ve written before on this blog about why Facebook really can’t be your online research community. Facebook, and indeed other social networks, isn’t suited to getting the depth of qualitative information that you can get from an online research community. As we wrote at the time:

It’s only in a research community that you can really make sure you get the most out of the discussions and debates [...] do you have right of response and an ability to enter into an equal discussion with other members [...] can you build and analyse the profiling data you get from the members and the vast backlog of their contributions and opinions [and] do you have a set of members who are their to engage and interact directly with the brand and there to support you

Perhaps what Engagement Ads more closely represents is a large online research panel. With firms able to buy questions and target a particular set of respondents based on their screening criteria. Even here, there are some concerns about Facebook. Panel providers spend a lot of time screening participants. They hold the same data on every participant and are therefore able to screen respondents fairly and comprehensively. The problem with Facebook is that it just does not collect data in the same way. As a member, I can opt what data I give them. I don’t have to tell them my age, my location or even my gender. So if somebody wanted to poll men aged 25-34 in London, England, Facebook might not approach me, even though I fulfill all those criteria. Respondents are therefore biased towards those who are willing to reveal this profiling data, rather than being a fair and random sample.

But of course, Facebook has a significant advantage. Size. With 150 million members, spread across the globe, it doesn’t matter if a proportion (even a large proportion) havent’ filled in their profiling information and so are excluded from the sample. There will be more than enough respondents available to get the responses they need. And to get them quickly.

So if Facebook is to use Engagement Ads as a market research tool then it won’t be tuning into an online research community. It won’t even compete fully with online panel providers. But it will offer something new to the market – a vast, rapid-response and (potentially) relatively cheap way of testing opinion and getting a flavour of what people think. For more depth of insight, however, firms are probably going to have to look to other sources.

Subscribe to updates from the FreshNetworks Blog

Some more reading

• Facebook’s Monetization Plan? Polls. And Lots Of Them (mashable.com)
• Facebook offers up users as marketing tool (guardian.co.uk)
• Facebook begins testing ad-driven polls (venturebeat.com)
• Facebook Polls Bring Reality To Davos Elite (ajax-blog.com)
• Mark Zuckerberg, WEF, and the Sentiment Engine (allfacebook.com)
• Not in Davos? Get Your Opinion Heard, Via Facebook (mashable.com)
• Facebook (NOT) Rolling Out New Product Research Service (Updated) (allfacebook.com)
• Facebook is NO ‘Market Research tool’ ! Telegraph misinterprets FB (techpluto.com)
• Newsflash: Facebook Not “Cashing In On Friends” (ajax-blog.com)

At FreshNetworks, we work very much in Research 2.0. Our sister company, FreshMinds, has been market research agency of the year here in the UK for the last couple of years and some of our communities are specifically designed for research. It was interesting, therefore, to listen to a great presentation from Guillaume Weill at CRM Metrix on his take on what Research 2.0 is.

For Guillaume, Research 2.0 is letting brands finally converse with their customers. They talk to them (advertising) and listem (market research) but don’t actually engage with them. In fact Guillaume would say that brands talk 50 times more than they listen as global advertising spend is about 50 times the spend on market research.

To start to converse, Guillaume things that market research companies need to shift from a vertical view of the world to a horizontal one. He defines these as follows:

To acheive this, Guillaume recommends that brands and market research agencies:

• use the potential of online conversations to listen to their customers
• analyse these conversations in a new way – allowing customers to comment on and refine others’ contributions
• converse more often with their consumers, ideally leaving the conversation on all the time

This all makes sense and is similar to what we have been saying for a while and wrote in our white paper earlier this year (see post here).

So what does this all add up to? Guillaume thinks that Research 2.0 allows you to get the same quality of results but more quickly. This is where we disagree. We think that the quality and depth of insight you can get from a well managed conversation with your customers can be qualitatively different to traditional research techniques. Taking qualitative methods online can revolutionise the depth of insight you get and the ability to bring your customers inside your business.

If you want to find out how we’d do this then feel free to get in touch of course!

Forrester released a report on this issue last week (see here) and their answer is “Yes, but high costs mean that firms with big budgets lead”. This may be true and if it is then it’s more to do with the nature of using online communities for research. They mean building an ongoing relationship with a group of people than needs to be actively managed at all times. This is then available for the brand to dip into for research or to track.

The real issue here seems to be the shift from a project-based approach to research buying and running an ongoing research resource (which obviously has an ongoing cost). At FreshNetworks we think the benefits of using online communities for qualitative research are huge. We wrote our own white paper on the issue earlier this year (see post here). The depth and quality of insight you can get by building real communities with stakeholders can be incredible and the real value comes from the other benefits of building a community like this.

Traditional market research is very transactional. People answer a survey or attend a focus group. Using online research communities, brands can really engage with people. Involve them in their research, feedback to them and incentivise them not with the cash of traditional methods, but with the knowledge that their input is making a difference. Critically, and this is the really exciting bit, traditional market research depends on you know what questions you want to ask. With online communities, the community can tell you what you need to ask. And that’s probably something much more important and relevant to you!