Why Social Networks Are Cool on Sharing (Their Data)

With Focus on Ad Revenue, Not Exchanging Prime Data, Social-Media Players Hold Upper Hand Over Market Researchers

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Market researchers may "like" social media, but it doesn't look like social networks like them back to the same degree. And that may present a problem for the many market researchers who believe listening and mining social media for insights is the single largest opportunity the digital age has presented the field.

Social media "is clearly the communication choice right now and in the future. Each of them have tremendous power and access obviously to consumers," said Merrill Dubrow, CEO of Omnicom's M/A/R/C research, who has actually created a collective acronym for the Big Three social networks, "FaTwIn," a combined force he portrays as the emerging powerhouse of market research. "I think they're going to be real players in our industry," said Mr. Dubrow. He then added: "I also think they're going to be a real threat to our industry."

For research purposes, social networks hold great promise. Procter & Gamble Co.'s top global research executive, Joan Lewis, speaking at the Advertising Research Foundation's Re:Think 2011 conference in March, said that consumers increasingly would rather talk to brands in social media than through surveys, which consumers increasingly avoid. And she's far from the only person in research intrigued by the promise of social media to solve research problems, such as the growing cost and difficulty of getting people to take surveys.

So what's the problem? Social networks, more interested in plumbing their networks for advertising purposes, seem to be showing more limited interest in less lucrative research, and have been at times slow to make data, analysis and insights available to marketers. Mr. Dubrow said social networks are trailing demand for research and analytics services around their offerings. One reason, he said, is that they have not yet figured out a "value exchange" that would make consumers or business professionals willing to trade their personal data.

That was the main reason he thinks LinkedIn, after initially taking a stab at providing hard-to-obtain business-to-business survey respondents for marketers in 2008, backed away from the business. Mr. Dubrow believes LinkedIn will come back to the area, but LinkedIn doesn't sound so enthusiastic.

"Providing B2B survey samples by themselves is not a primary focus for us right now," LinkedIn VP of U.S. Sales Dan Shapero said in a statement.

Some of the social networks' slow going on market research and analytics, Mr. Dubrow said, is also likely from concern about intensifying privacy concerns. Facebook, for example, has vetoed third-party efforts to apply outside demographic and psychographic segmentation models to its user base, said a person familiar with the matter, on the grounds that only users should be allowed to apply labels to their profiles.

Perhaps the biggest factor holding back social networks plying the research market is that they're more focused on advertising. Annual U.S. revenue in market research has been $17 billion to $18 billion in recent years, according to the American Marketing Association's Honomichl Report, less than a seventh the size of the $130 billion to $150 billion spent last year on advertising research, according to Magna Global and Kantar Media estimates.

"Our focus right now is on building the advertising business, which we think is the bigger opportunity," said Facebook spokesman Brandon McCormick. "Not only because it's the bigger business, but because we think ads that provide the social context [are] a unique offering in the market."

Such things as brand pages and Facebook Insights are offered free to marketers and meant to support the advertising business, Mr. McCormick added.

LinkedIn's Mr. Shapero had pretty much the same outlook: "We're focused on delivering a world-class suite of customizable advertising and recruiting products to our clients, and research is a part of that effort."

And when Twitter announced an improved research and analytics offering at the Ad Age Digital Conference earlier this month through its Follower Dashboard, it said it was making the tool available only to marketers who buy advertising. For other insights, Twitter is leaving the work to others. It has made slices of its sizable tweet "firehose" available to such firms as Datasift and Gnip. A host of other third-party companies mine and analyze tweets too, storing the data in their own servers for longer-term analysis.

A Twitter spokesman said that when the company recently gave guidance on areas where it sees the greatest opportunities for third-party developers, "real-time data signals" and "brand insights" were two areas it identified as particularly ripe for development. "There are already hundreds of companies doing business in this area," he said, "and we anticipate that will grow."

While Twitter buzz is generally in the public domain and Twitter is letting third-parties commercialize it, making it far easier to get and analyze, Facebook has a much richer trove of what people are spontaneously saying among their friends in wall posts about brands is largely invisible, particularly if those people don't "like" brand pages.

Like Twitter, Facebook's solution has been to work with third parties to build analytics solutions for fan pages, said Jeff Widman, co-founder of PageLever, a firm that works in that space, and BrandGlue, which works to optimize readership of brands' Facebook news feeds. And he believes that may make sense, because ultimately marketers are more likely to believe data about their advertising that comes via a third party.

None of that , however, addresses marketers and researchers' other dream -- of better tapping the vast stream of social-media chatter to find insights and monitor the health of their brands. So while researchers may keep following the social networks closely, it could be a long time before they're followed back.

A correction has been made to this story.

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An earlier version of the story said a study released in March by Yahoo and Cornell University found only 0.05% of Twitter users -- 20,000 in all -- account for half of tweets. The study referred to half of all tweets consumed, based on tracking URLs embedded in tweets, but not of all tweets generated.
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