The announcement of Bing and Facebook joining forces to present socially influenced search is an important yet inevitable evolution of the search industry. The total time spent on Facebook now exceeds Google and Yahoo!. Further, a Nielsen report stated that the average user spends 23% of her Internet time on social networks, up 77% from a year ago. With such rapid adoption of social networks, it is inevitable that it will (and probably, already has) influenced the way people search and buy products. If one does the analysis on these changing trends, the following patterns should emerge increasingly on Search.
Virality: Showing friends who like a product will bring the viral nature of social network into the purchasing funnel. Products that would take time to become popular could become popular instantly much like YouTube hits. On the flip side, initial adopters having bad product experiences could make a movie instantly unpopular. Companies will have to be especially careful when launching new products.
Changes in buying behavior: Collaborative filtering is a new research area that aims to predict one’s preferences based on multi-dimensional user data. The highly publicized “Netflix prize” was a contest for the best collaborative filtering algorithm to predict user ratings for films, based on prior ratings. Recently, newer algorithms have emerged that use Social Network data (Social Network Collaborative Filtering or SNCF) do a great job in predicting preferences. These have the added advantage of not being computationally intensive and hence can be used for a high volume of data. From a business perspective we can now confidently assert what marketers always knew – a consumer’s preference for products and services are well influenced by our friends and family. Hence, with the Bing and Facebook integration, we should expect consumers to buy products and services based on what their friends like. Further, the research phase of the purchasing cycle should be shorter. Net-Net: Higher conversion rates for advertisers on Bing and shorter buying cycles.
Greater integration of Facebook and Search: When Bing ads include Facebook data one should expect a greater degree of overlap between Facebook and Bing in the purchasing funnel. All this makes it more important than ever for advertisers to integrate tracking across both channels to maximize their performance. Needless to say, advertisers have to consider Facebook as part of their overall marketing strategy.
Finally, what about Google ? While Google has made recent forays into the social sphere with products such as Buzz and Orkut, it has been reported that not having Facebook data could be a cause of worry to the company. However, I learned to never underestimate Google a long time ago.
We will keep our eyes open on how these changes are affecting both consumers and advertisers and will report on anything noteworthy as soon as they occur.
Dr Siddharth Shah
Director, Business Analytics
Comments