February 2010 ‘Socialising’ with research By Suheil Patel Benjamin Franklin said, “Be civil to all; sociable to many; familiar with few; friend to one; enemy to none.” Maybe Benjamin Franklin did foresee how social media would operate in the 21st century. The rate at which social media has evolved and spread its reach has left everyone, right from multinational companies, educational institutes to media celebrities and the common man, looking to leverage the most out of it. Traffic to Facebook and Twitter in the last one year has jumped by 200% and 1500% respectively. Time spent on social networking websites has also increased over the past one year by 67%. Social media is an interface where data in a raw (or crude) form is exchanged amongst consumers. This is like a direct (and frank) feedback about a product, service, individual, company, destination, etc. Impact on businesses Why has social media become a big frenzy and how does it help consumers as well as companies? As consumers, we have a tendency to ask our friends and family for opinions and preferences before purchasing a product/service. With the advent of social media, consumers now have a platform with a huge audience base to receive feedback and opinions. Social media not only offers a platform for consumers to receive and give feedback but it also allows companies to interact with their consumers. From FMCG companies and telecom operators to retailers and automobile companies – everyone wants to know “What do consumers want?” According to a research by Nielsen, time spent on social networking websites out of the total time spent on the internet has increased from 6% in August 2008 to 17% in August 2009. Exhibit: Online advertising spend Source: Nielsen research Companies around the world are increasing their spend on online advertising in order to reach out to a wider audience in a short span of time. Market research: leveraging on social media Market research industry has also realised the potential of social media. Research through social media helps market research companies define their research methodology based on the geography that they are tracking. For example, research through social networking websites will receive huge impetus for geographies in Latin America like Brazil, Argentina, and Chile where number of online users (social networking website users) are more. Further, market research industry has evolved from the traditional (surveys, interviews, panel discussions) to out-of-the-box (social media, consumer tracking tools) research techniques. The US$32.5 billion industry has seen a temporary blip in terms of revenues; however the industry is looking at innovative research techniques and operational models to counter recessionary pressures. Global market research giants including AC Nielsen, TNS, Synovate are looking to adopt innovation in their research techniques and online media technology and tools. Research companies have introduced tools and technology that are constantly tracking, evaluating and monitoring comments from social network websites. These tools (e.g. Nielsen's BUZZMETRICS) not only monitor websites but also come with customisable dashboard and research tools that facilitate in collection of data and streamline the data for analysis and decision-making. According to Sunil Mirani, CEO, Ugam Solutions, “With the rise in the number of users on social media websites, small companies tracking feedbacks and consumer preferences have mushroomed over the past two years. Large MR agencies were slow to react, but addressed the scenario by acquiring these small tracking companies.” Market research companies using technology are filtering raw data floating over the web and delivering actionable insights that are helping clients to get random, real-time updates and consumer responses about their product/services. Smaller companies (with 10-15 employees) tracking social media websites have also grown over the past one year. Research agencies now have dedicated employees managing and tracking social media websites. New job profiles like Community Manager, Director of Online Media, Interactive Account Director, Emerging Media Manager have been introduced. Next stage The utility of social media in business is not limited to a manual or a set of guidelines. Companies are using social media as part of their networking and marketing plan. Zappos used Twitter as its customer service platform in addition to phone line communication and email. Walmart constantly implements platforms for its product reviews “My Starbucks Idea” programme introduced by Starbucks encourages its customers to submit their ideas for new products and services. Best Buy uses a private social media network for internal communications with its employees to track employee satisfaction and sharing of innovative ideas. For a market research company, tracking social networking websites has become an integral part of the research plan. It gives a research company a colossal audience to track and constantly receive feedback and insights about products and services. Says Sunil Mirani, “Traditional research techniques entail asking questions to a target audience. Whereas research through social media is about drawing inferences/insights from various consumer conversations/interactions taking place in the digital world at large.” Going forward, social media is set to become a conventional means of research. While it would not be a substitute to traditional research techniques, it may outgrow or eclipse some of the traditional research techniques. At the end of the day, you need to be where your customers are! Suheil Patel is an analyst at ValueNotes, a leading research provider focused on the outsourcing industry.