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A Fundamental Change in Market Research and Business?

Since I like to comment on mainstream media trying to rationalize the blog word, Sunday's  New York Times article entitled "A Blog Revolution? Get a Grip" is a perfect example of the raging debate on whether blogs are a new business model or a fundamental change in marketing and business.   In it, Nick Denton of Gawker Media says "A blog is much better at tearing things down - people, careers, brands - than it is at building them up."  As for the blog revolution, he says: "Give me a break." 

While comparisons could be made to personal web pages, I think the ease and anonymity of blogs are allowing for a fundamental change in the way business is done. There is too much rich data to be found in combing through them especially if you can express your thoughts without fear of retribution. Look at what happened at Los Alamos with the director resigning after bloggers brought up some very serious allegations and then the NYTimes picked up the story.

As we all know, many people love writing and reading about negative issues.  Today, the ability to air issues, likes as well as concerns allows for marketers to look for trends and analysis that in the past would call for extensive primary research and focus groups.  Finding out what problems consumers have with dealers or new features can allow timely insight and the ability to react to the situation.

The reason that this does represent a fundamental change is the confluence of these various factors including linking, track backs,  and RSS distribution.  Another factor that points to  a significant change from traditional journalism is the credibility that can sometimes occur when large numbers of people air very similar concerns, with an issue or a leader, similar to what happened in the Los Alamos situation.  I am not saying that having 300 people say the same thing makes it right but it allows a marketer or a corporate executive to see troubling or interesting trends that might point to an opportunity that competition has not seen. 

Even examining what Nick is doing underscores his need to use blogs to attract large amounts of readers to make his business model work.  I think we will see a slowdown in the rapid growth of consumer generated media as the novelty wears off and we will see a flight to quality.  However, the huge amount of relevant and dynamic information will continue to provide a windfall for marketers in understanding how the brands and products are perceived. The ease and low cost of distribution has certainly allowed many to post their thoughts.  And the wealth of information presented in blogs, usenet groups etc. has created a demand for those looking to purchase products and get good up to date credible information.

The best companies will seek to make use this information to their advantage as Daimler-Chrysler is doing with the marketing in Dodge Charger division.

Posted by Andrew Bernstein on May 10, 2005 at 06:20 PM | Email this post Permalink

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Comments

The notion that blogs will replace 'extensive primary research and focus groups' is laughable if you're talking about mass consumer goods. Until you can randomly sample the blogs of 75%+ of the population (what, 2% keep regular blobs now?) forget it. You're more likely to over-react to meaningless trends.

Posted by: Paul | May 11, 2005 6:36:06 PM

I am not suggesting at all that blogs will replace extensive primary research, in fact the contrary. I think they are viable new means of primary research. I do disagree that 5 million people daily (Pew Internet project) posting or sharing information through blogs has meaningless or statistically valid information. Considering the demographics, the daily nature and the type of information shared, it is hard to argue that there the trends and insights are not valuable to marketers. It may not appeal to some vertical industries but consumer products companies, automotive, pharma to name a few are paying close attention.

Posted by: Andrew Bernstein | May 12, 2005 5:32:52 PM

Instead of talking about 'fundamental changes in the way business is done', if you had talked about blogs in a strategy specific manner, your article might have convinced me. There are obvious consumer goods industries where the propagation of messages in a viral manner makes sense (pharma and auto as per your example). And tracking product/service/brand messages in blogs probably makes sense (as much sense as tracking PR messages and other information regarding your brand that you don't have direct control over). Is this information valubale to marketers? Yes/no/maybe, it depends. I don't want 5million people dissing my brand online, but do 20 complaining about poor service really matter? Is it reflective of actual service overall? No idea.

I am not going to argue blogs aren't useful, but they are nowhere near a fundamental change in the way business is done. I think Nick Denton is right on this one.

Posted by: Paul | May 13, 2005 10:06:08 AM

I do agree that you have to carefully understand and analyze information in blogs before you can draw conclusions as to meaningfulness. However, how is this different than most primary research? I have been involved in many focus groups where expert facilitators have lead the witness...

You outlined two strategic ways to potentially use blogs. I would also argue that there is also a rich store of information that can yield to new insights. For example, just a cursory read of some of the auto related blogs showed that BMW X5 owners are complaining about blue tooth compatibility or that many auto enthusiasits are starting to use Dell DJs and IPODs in their cars instead of radios. The distribution of this information so quickly can give markets an edge or a serious problem that has seldom been seen before in conventional marketing. Additionally, many of the people who are posting are the early adopters, innovators and often opinion leaders. If blogs can better connect marketers to this population, then the value is quite high. I will not disagree that it is still early in the development of CGM. thanks for your comments

Posted by: Andrew Bernstein | May 13, 2005 11:06:15 AM

Ok, so this is not trying to get the last word in here, but I do want to make one more point. With all the research major brands do before new products hit the market; with all the tracking they do of performance in market; and with all of the ways a customer can complain - if the first time you hear/know about a product defect is through a blog, you should be worried about your job.

If you analyze customer blogs to look for new and interesting ways they are using your product/service, more power to you.

Posted by: Paul | May 13, 2005 1:40:56 PM

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