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Traditional market research is seeing another shake up with the inclusion of social networking into their mix of techniques. While we’re all accustomed to seeing advertising on Facebook (everything from “That’s what she said” t-shirts to floral gift baskets are being hawked on their ad board), a new strategy has been popping up in the marketing departments of major companies. Now, not only will you see ads for your favorite products, but you will be asked to discuss them in social networking forums.

The process of tweaking and improving products is being taken out of the hands of R & D departments and being thrust upon the consumer. In an increasingly user-generated world, everyday consumers are being asked for their feedback on everything from doggie treats to tax software, all through the lens of online networks. Not only is this a cost-effective way to conduct high-level focus groups, but people sitting in front of a computer are more likely to be brutally honest than those sitting in a stuffy conference room. Some companies are using the standard sites like MySpace and Facebook, while others are creating their own social networks. Some are made up of selected consumers or internal employees, while others are open to a larger market set.

A good example of this is Proctor & Gamble’s networking site Capessa, which is open to any internet user. It focuses on what are believed to be “women’s issues” like health, beauty, parenting, relationships, and gardening. As the website explains, “Capessa is a gathering place for real women to share their stories, offer their personal wisdom and practical advice, improve their lives and be inspired. It’s a place where experiences are the common thread, where advice comes from personal experiences. Capessa is you and women just like you.” Not terribly subtle, is it? What is subtle is Proctor & Gamble’s involvement, which is mentioned hardly anywhere on the site. Users can post blogs and videos, recommend links, and chat about their favorite shoes and makeup, while P & G collects their opinions and ideas for future product development.

Another example of this is model is Turbo Tax’s Inner Circle, which is a social network open to any taxpayer, whether or not they use the software. The site boasts a membership of about 5,000 users, and they can ask questions and post comments about taxes and the software packages offered by Turbo Tax. Their marketing department monitors the questions and concerns and even stokes the conversations to gather data. What differentiates this from Capessa is the open acknowledgment that user comments and ideas will be used for future product cycles. The website urges users to, “Tell us how we can improve our products and services. Contribute ideas for new features.”

In addition to individual companies who have created online forums for focus group research, there are a few pioneering technology firms developing social networks as a business service. Mzinga, which translates as “Beehive” from Swahili, allows companies to integrate social networking tools into their existing website. These add-ons can include blog-style forums, wikis, consumer surveys, polls, user profile pages, and social bookmarking. Another front-runner in this trend is Networked Insights, has the added feature of rating customer comments and activity based on the responses they receive. For example, an active commenter who does not spark debate or attract other comments would be less important for market research than a one-time commenter who set off a firestorm discussion. This allows marketing departments to screen ideas based on their validity and popularity.

Companies who engage in focus groups based in online networks are reaching out to users in a low-cost, high-yield way. Clever marketers could potentially get free advice from people who actually care about the outcome of the product. One word of caution, however: be prepared to actually use their suggestions. There’s nothing quite as puzzling to consumers as ignoring their opinions. Making a product based on user-generated data not only has the power to appeal on a massive scale, but it also has a built-in consumer and the buzz of word-of-mouth advertising. It’s the recipe for a perfect storm, and I suspect that more and more corporate websites will be asking me to create a personal profile in the near future.

Wednesday, February 13th, 2008 Both comments and pings are currently closed.

By Haley January Eckels