The Future Place Blog

User Generated Content Driving Growth

Nielsen/Net Ratings have reported that 50% of the top ten websites in the US in terms of growth in the year to July 2006 were user generated content sites, such as photo sharing, video sharing, and blogging.

The top UGC site was ImageShack, which was ranked at number 4 and grew 233%, from 2.3 million visitors to 7.7 million. In many ways the most impressive growth came from MySpace, ranked 9th, which grew 183% from 16.2 million to 46 million, what makes this so impressive is that it is the only one of the largest 10 sites to have grown by more than 23% (Google grew by 23% in the year to July 2006).

By contrast older top ten goliaths showed little growth, Real Networks +3%, AOL +1%, and Microsoft -5%. The most visited site remains, for the time being, Yahoo, with 106.2 million visitors, but it only grew by 8%.

At these rates of growth it won’t be long before the 10 largest sites are dominated by User Generated Content sites, such as MySpace, YouTube, and Wikipedia.

A real car launched in Second Life

Springwise have reported that Toyota’s progressive brand Scion has launched its Scion xB in virtual reality Second Life, and hopes that sales in the real world will be stimulated by virtual purchases and test drives in Second Life.

The Guardian sums up Second Life in the following way “…the three-dimensional online phenomenon (it is hardly a game) that is taking the web's potential to a new level. When you join at secondlife.com you choose a name and an atavar (a 3D representation of yourself) and you are ready to go. It costs nothing to join and explore until you want to build houses, buy an island for $1,200 (£656) or products from the shops that are springing up.”. 

Scion are following the lead of other brands such as AloftHotel and American Apparel, the first to create a buzz before the first real hotel is even open (not till 2006), the second to support an existing lifestyle brand. American Apparel give a 15% discount to people who have bought the same product in Second Life.

As well as blurring the lines between the real and the virtual, environments such as Second Life raise interesting market research questions. Should we try to interview people in their Second Life environment, or should we try to interview people who have parallel lives, to try and judge its effect in the real world? Will consumption in Second Life lead to consumption in the real world, or will Second Life provide an aspirational environment to buy things that would not be purchased in the real world?

The Pluto revolt has started!

Even faster than I had expected there is outcry over the IAU’s (International Astronomical Union) decision to relegate Pluto from the list of planets and their confident assertion that the rest of the world would rush to amend school books and quiz answers to agree with them that there are just eight planets.

The BBC have reported that “A fierce backlash has begun against the decision by astronomers to strip Pluto of its status as a planet.” and CafePress have joined the fray by promoting a “Honk if Pluto is still a planet” bumper sticker.

The BBC report that the lead scientist on Nasa’s mission to Pluto has called the decision “embarrassing”, whilst a leading member of the IAU has accused a faction he calls “dynamicists” of hijacking the issue, by winning the vote when most of the other delegates were not in the room (although 2500 attended to conference, only 424 were present for this key vote).

It is not clear what the future of Pluto’s status is likely to be, but it is clear that science has shot itself in the foot, it has made itself look silly, arrogant, and it will find it even harder when it is asking for money.

Who decides Pluto’s future?

The International Astronomical Union (IAU) has decided, at its 2006 AGM in Prague, Czech Republic, that from now on there are only 8 planets. They have decreed that Pluto, along with an unknown number of distant, massive bodies will be known as Dwarf Planets. The BBC report that the IAU expects text books to be re-written, and for schools to start teaching that there 8 planets, just as people who were educated before 1930 (the year Pluto was discovered) were taught.

However, the IAU may find that the public, in true Web 2.0 fashion, are not willing to have this top-down edict imposed upon them. The IAU is a largely self-perpetuating body, comprising 8,796 individual members plus 62 countries who have national members (by contrast the United Nations has 192 countries represented and no individual members). The individual members are hardly the most typical representatives of the world’s view, they are mostly PhDs, 87% of them are male, they are drawn from just 85 countries, and in order to vote they had to be one of the 2,500 who were funded to travel to Prague for the AGM.

What happens if the rest of the world rejects or ignores the IAU’s decision? Do they have any sanctions? The IAU is recognised by Governments as the body responsible for things like naming planets, but Governments are also susceptible to public pressure.

Listening to the astronomers speaking about their decision, such as Professor Iwan Williams, chair of the IAU panel working on the definition of planets, quoted by the BBC, one is struck by the confident way they assert that what they have decided is right in some ‘abstract’ sense. Like some quantitative market researchers, they seem to believe that all problems can be reduced to a set of logical and consistent rules, and that rules need to be consistent, as if there were some theoretically ‘correct’ anser . However in the real world this is usually not so.

We can all agree that light comes in three colours (Red, Green, Blue), that absolute 0 is about -273 centigrade, and that the probability of throwing a 6 with a fair die is one-sixth. However, politicians, scientists, and market researchers often behave in too dogmatic a way when talking about their observations of the real world. Is Scotland a country or a state of the UK? Is a whale a suitable animal to hunt and eat, indeed is any animal suitable? What exactly constitutes a continent, why are Asia and Europe considered to be two separate continents, is Australia an island or a continent? Is that new user segmentation rarely useful?

There has been growing concern about the declining influence of reason and the growth of what Francis Wheen has termed Mumbo Jumbo. Several reasons for this have been put forward such as:

• Science mistakes such as the UK Government’s scientists saying cows could not contract the disease that we now call Mad Cow Disease and saying eating beef was safe (over 150 have since died).
• Scandals such as Hwang Woo-Suk, the South Korean cloning expert who was shown to have fabricated his results.
• Science for hire, such as all those scientists who worked for the cigarette companies in the 60s, trying to show smoking was safe.
• The ‘dumbing down’ of our media and of the wider society.

But surely 2,500 professional astronomers, mostly male, drawn from the richer countries, voting by waving yellow cards in the air, without any attempt to carry the wider public with them, is the sort of behaviour that will widen the gap between “experts” and “the rest”.

Evidently that key and influential group of pseudo-scientists, the astrologers, have no plans to downgrade Pluto, they assert that it still dominates Scorpio. It is a worrying reflection of the poor standing of science that I suspect many people will be as willing to believe their star signs as the astronomers.

Bands funded by their fans

Springwise.com reports on a venture to help independent bands get off the ground. Sellaband have created a venture where fans can create the funding to launch a band and then share in the rewards (if there are any). SellaBand creates a platform and offers fans, or believers as they call them, the chance to a share in the band. If and once 5000 shares are bought SellaBand create a professional CD for the band.

The songs are then made available as free downloads, and money is made, for the successful bands, from advertising revenues, which are then split between the band, the fans, and SellaBand. Because the band, the fans share an interest in getting 5000 shares sold and then in promoting the band via downloads there is every chance that a critical mass can be achieved for the right band and for the right recording.

At first glance this approach looks as though it could circumvent market research, and simply profit though the evolutionary process of the fittest succeeding, and the rest failing. However, the challenge for market research is to suggest options for improving a brand's success, either in terms of content, or in terms of promotion.

Why technologies succeed or fail in market research?

Recently I presented at ESOMAR’s Innovation 2 conference on the topic of techniques that succeed and those that fail and I am now in the final stages of writing a chapter for ESOMAR’s new Handbook on the Impact of New Technologies in market research. As part of this process I have had more time to consider the techniques that succeed and those that fail, and here are my thoughts to date:

A new technology will tend to have an impact if it can meet the following criteria:
1.    Can it replace something else and make it significantly better, cheaper, or faster? For example, online access panels.
2.    Can it meet a known or recognised need at an acceptable cost and with an acceptable turnaround? When Hierarchical Bayes was available it was immediately grasped by Choice Based Conjoint modellers who were struggling with the lack of individual utilities.
3.    Can it satisfy a need that was not previously recognised at an acceptable cost, with an acceptable turnaround speed, and in a way that makes enough people realise they have the need. WOM research is currently going through this process.

In addition techniques will tend to fail if they are only available from a single supplier or if the need they are meeting is not sufficiently prevalent in the market.

By these tests it can be assumed that neuromarketing will not be making a major impact on the market research world in the near future, it is not available from a wide range of suppliers, it is not cheap, and it tends not to be fast.

Another example of a technology that has failed so far is mobile phone based research. The technology can produce large sample size, relatively cheaply, very quickly. However, the sort of information that is produced only rarely matches the sorts of needs that brand managers have. Mobile phone research has proved very weak for U&As, concept testing, and even for satisfaction surveys.

Keeping track of what the world is viewing

The WorldTV Internet TV Charts is a site that posts the most viewed video clips from Google, YouTube, Digg, and Videosoft. This is a great way to stay in touch with what people are watching. The site was highlighted by Micro Persuasion, who also mentions popurls.com a great collection of feeds from all over the web.

AOL – a drowning in the electronic wake

The electronic wake is a term that I coined a few years ago to describe the trail we leave behind ourselves in a wired society. For example, mobile phone calls, credit card purchases, smart cards, web browsing, CCTV systems, RFIDs, ATMs, all leave a track of where we have been and what we have been doing (and in some cases who we have been doing it with).

Recently, AOL has caused outrage by releasing part of that wake for general consumption. In early August AOL released the search logs for 658, 000 users, and has since been drowning in a torrent of recriminations, abuse, and threats of lawsuits.

Technology Review reports that the search logs were originally posted to a research site, and were removed once the manure hit the fan, but other sites have evidently re-posted the data. Although AOL changed people’s IDs to a randomised string, the nature and content of many of these searches may have made it possible to identify individuals. For example, people often search for their own names or for their home towns.

As an example of the sort of data that can be accessed News.com reported “it's possible to guess that AOL user 710794 is an overweight golfer, owner of a 1986 Porsche 944 and 1998 Cadillac SLS, and a fan of the University of Tennessee Volunteers Men's Basketball team. The same user, 710794, is interested in the Cherokee County School District in Canton, Ga., and has looked up the Suwanee Sports Academy in Suwanee, Ga., which caters to local youth, and the Youth Basketball of America's Georgia affiliate.
That's pretty normal. What's not is that user 710794 also regularly searches for ‘lolitas,’ a term commonly used to describe photographs and videos of minors who are nude or engaged in sexual acts.”.

News.com also reports the AOL apology “This was a screw-up, and we're angry and upset about it. It was an innocent enough attempt to reach out to the academic community with new research tools, but it was obviously not appropriately vetted, and if it had been, it would have been stopped in an instant,”.

The New York Times ran a story showing how it had identified a woman from Georgia, USA, just from her ‘anonymised’ search logs. The New York Times asked the lady for her views about what had happened and reported “Ms. Arnold says she loves online research, but the disclosure of her searches has left her disillusioned. In response, she plans to drop her AOL subscription. ‘We all have a right to privacy,’ she said. ‘Nobody should have found this all out.’”.

On the one hand, logs like these could be tremendously useful. Analysis by people like AOL Stalker have used the data to evaluate the importance of being in the top five items returned by a search, and show that 46% of these searches did not result in a click. Given that the number of users logged was 658,000 and included some 21 million searches, the base is pretty substantial!

On the other hand, the privacy concerns are immense. Most people were unaware that the big companies store all their searches. Almost everybody would have assumed that the terms that they had used in searches could not be traced back to them. And now they are aware, they seem pretty unhappy.

There are clear lessons for market researchers here. The first is the need to stay on the right side of the people we research, and the second is to make sure that we have the skills to work with this sort of information whenever it is legitimately available.

BTW, curious about how people like Google manage to keep your searches connected? Simple, they use a cookie. So, when you change machine or when you clear your cookies you break their link, for the time being.

Bill Gates, champions women’s health

In reporting the 16th International conference on HIV and aids the BBC did not refer to Bill Gates as the founder of Microsft, nor as the world’s richest man, they said “The American philanthropist Bill Gates has said the key to stopping the Aids pandemic lies in giving women the power to protect themselves.”. A recognition that the impact he may have on third-world health may one day be greater than the impact he has had on IT.

Particularly striking was Bill’s Gates emphatic statement of women’s rights "A woman should never need her partner's permission to save her own life. There's progress on these, but the pace has been too slow.”.

The BBC report that "In his opening address, Mr Gates said his charitable foundation would be putting more money into developing drugs and microbicide creams that women could use before sex to prevent infection with HIV. ". The report added further support for this view from Stephen Lewis the UN special envoy on Aids in Africa who said “To change the sexual behaviour of men is a question of generations. Women are dying now.”.

Bill Gates appears to be living the old proverb “What you give for the cause of charity in health is gold; what you give in sickness is silver; what you give after death is lead.”.

I know this is nothing to do with market research, but I feel it is important.

2007 - the year of the price crunch in Europe?

A growing number of companies, such as Greenfield, have been reporting figures that show a higher volume of work, but with lower revenues. In recent conversations with panel company representatives I have certainly picked up on cost-cutting and in my dealings with end-clients there is clearly a climate of lower cost competitors becoming more prevalent. My prediction is that the last few months of 2006 and throughout 2007 we will see deep cuts in quantitative research projects.

The key driver to these price cuts is online research, and in particular online panels. Changes that happened in the US about five years ago are now happening in Europe. There is a growing range of panel companies, each competing to get more business, more and more studies are moving from CATI and face-to-face to the Internet, and low cost options from small to medium-sized agencies are also having an impact.

Another driver of cost-cutting is the growth in the number of clients asking for very quick turnaround projects. Quick turnarounds preclude deep analysis, and often mean that a comprehensive set of deliverables have to trimmed. Less analysis and fewer deliverables imply reductions in costs and increases the number of agencies capable of handling projects.

However, these price cuts only appear to be happening in quantitative research, qualitative is largely safe from these changes. The key risk being cases where a client is unsure whether to go qual or quant. In the past, there were clients who instead of doing a quant job would simply buy a couple of focus groups. The way things are going the cheap option will be to do a 300 cell quant survey with a panel company, rather than the two focus groups.

I see the key changes over the next two or three years as:

• Decreasing prices for ‘commodity’ market research (i.e. most quantitative research).
• An increased number of low-cost, small to medium-sized agencies, outsourcing most aspects of their business.
• Increased prices for ‘value-added’ or more technical projects (e.g. advanced modelling).