Why Social Networking is Killing the Traditional Survey

TechCrunch announced today that LinkedIn is going to begin its own ad network. Non-personally-identifiable information about users' age, income, education, etc will be placed into cookies that will be shared with partnering sites to help target certain ads based on a user's profile.

This is quite similar to the idea that I discussed last month about advertising based on financial profiles. The premise of my idea is to develop an exceptionally "sticky" personal finance website that would make assumptions about its users based on their financial transactions and then advertise appropriately.

Networking sites are starting to understand that their users are spending an incredible amount of time online, entering terabytes of their personal information in hopes of developing a new life-changing business or social relationship. The more useful features that these sites develop, the more information they'll be able to obtain about their users. For instance, if Facebook were to place a mapping feature on their users' photos albums (like Picasa has), they could see where their users travel and sell that information to local advertisers.

Back in the 90s, companies would try to obtain this kind of information by sending its customers index cards that asked questions about income, address, etc. Retail stored would ask for a zip code or area code to find where its customers were coming from.

Today, social networking sites are becoming Survey Central, and their users may not even realize it. By sites developing new features that are perceived as useful/fun/cool for users, they're opening a door into yet another dimension of personal information. By providing users with a useful or fun product, sites can collect the honest, accurate information that traditional survey adminstrators couldn't dream of. Take LinkedIn for example. As many join the site in hopes of being discovered by the Donald or at least scoring a lucrative business deal, their descriptions of their work experience are likely to be pretty accurate. Just as most people place reasonably accurate and verifiable information on their resumes, the professionals on LinkedIn will enter similarly accurate information into their profiles.

Social Networking sites should work with their key advertisers to figure out what information would be the most valuable to them and develop "back-door" applications and features to try and extract that information. Bars in New York City may be interested in advertising to Facebook users that are between 21 and 28, live in NYC, and have listed their interests to be "partyin" "drinkin" "gonig out" or "chillin." A government contractor looking to fill a handful of positions might ask LinkedIn to advertise the positions to users that log in frequently, are interested in job offers (a metric tracked on LinkedIn), and have at least five years of experience working for the federal government.

Because of user-created content on social networking sites, the way that companies collect data is doing a complete 180. Instead of asking 20 specific questions in a survey and deducing a conclusion about the participant, companies can inductively analyze a collection of user-provided data and target groups and demographics based on a predetermined strategy. Because of the nature of social networking sites, potential customers are already answering unasked questions. Now all advertisers need to do are figure out how to ask the questions and fill in the answers accordingly.

Gmail -- now with a dry sense of humor

As you may know, Gmail's computers explore our emails' content in hopes to learn more about us as consumers. Thomas Friedman predicted this type of marketing in The World is Flat by using the example of a young couple searching the internet for information about their soon-to-come first child. With their how-to results came customized ads for baby crap, like strollers, bottles, and toys. Friedman envisions these ads to eventually transcend the personal computer and find their way onto consumers' television and radio programs.

We're not quite there yet, but we're getting closer. But even though Google isn't laying down custom television ads, it is picking up on our sarcasm. Consider this:

Unlike me, just about all of my college buddies are single...I mean really single. And they all like to give me grief about my transition from a collegiate knuckle head to a domestic, engaged professional. There is, of course, some serious substance to their argument.

Yesterday, I emailed Steve (website) and mentioned a new piece of furniture that my fiance and I bought for our house. In the nature of giving me a hard time for being 'domestic,' he sent me a very simple, sarcastic reply:

"Well isn't that just adorable."

I shook my head, accepting his remark, but then looked closely at the ads on my screen. One read (and I'm paraphrasing because I can't directly copy an ad), "Dry sense of humor? Check out our funny, sarcastic t-shirts."

How about that?!? Their marketing campaigns have actually evolved from looking from key words to key phrases. Is it possible that they're only looking at those key phrases stated by one man to another? Now I'm curious to know if I would have had the same result if a woman had said that to me. Steve is a registered member of Gmail, so I assume they would have access to his name, maybe gender, and other demographic information.

In all seriousness, this would be an interesting move for Google and its advertisers: evaluating phrases and the context of the conversations in which they are used. I have never had a male friend of mine say "isn't that just adorable" without risking a shoulder punch. But if my great aunt Evelyn said that about a picture of my dog, it would be a different story.

Extracting the context of phrases based on the demographic using the phrase...now THAT's something! I guess they could also extract a searcher's location (based on IP) and give custom results based on local dialects.

I'll be interested to see where Google and custom advertisers take this...