Commentary

Are Buzz Monitoring Companies Racing Towards a Cliff?

The exponential growth in social media has seen a rapid proliferation in buzz monitoring tools and so-called listening platforms. However, what was once a lucrative seller's market is now becoming increasingly commoditized.

The honeymoon period for listening platforms is coming to an end as clients have matured quicker than expected. Attracted from the outset by charts, graphs, neon lights and cute flash animations, they no longer have a need for information for information's sake. Clients now want actionable insights they can use to improve their business. The players that listen to this change in expectations and take steps to deliver value will be able to protect revenues, but those who ignore it will inevitably see prices collapse.

I've seen the listening platform market grow steadily over the last seven or eight years, but it has really exploded in the last two. This growth has been fantastic for the buyers - brands and agencies that use these services - as it has provided them with a massive amount of choice and increased the pressure on the vendors to innovate. The intense competition has pushed listening platforms to deliver improved functionality and usability and this has driven the market forward.

Competition is great news for customers, but worrisome for vendors while the pressure on innovation remains relentless. While the leaders in the industry have built successful businesses around their solutions, I'd argue that none of them have yet built a truly established brand. As a consequence, very few can differentiate themselves based on anything other than price. It's obvious that vendors are beginning to cannibalize their own market, with prices falling at least 50 percent in just 18 months.

Although the larger economic picture has played its part in this price collapse, the lack of differentiation amongst services will continue driving down the segment's value if changes are not made. The only thing that will stop the rot and prevent prices from falling through the floor is a focus back on substance, not style -- actionable insights, not more cute animations.

Clients are investing in buzz monitoring solutions because they want to gather information and feed these insights back into their business in a way that will deliver genuine value. Unfortunately, the majority of platforms are focusing on new ways of presenting the same data, rather than uncovering deeper insights. Only by delivering deeper, actionable insights will listening platforms survive in the future. This means exploring different technologies (semantic Web, natural language processing, etc.) that can deliver a much more sophisticated analysis of online conversations - providing greater insights into themes, topics and sentiment as well as identifying key influencers across thousands of sites and millions of pieces of content. Those vendors that invest in better analysis will be able to differentiate themselves from the competition and protect their prices.

As an example, the Scandinavian market for listening platforms has matured ahead of the U.S. and U.K. and it has already gone through this pain. It follows three clear stages: adoption, price compression and (r)evolution. In the U.K. we are just beginning serious price compression and we can expect to see the market change substantially over the coming months. With Microsoft and Google about to launch their own tools, things are set to get even tougher for listening platform vendors.

But the future is bright for the vendors that are committed to investing in better technology to deliver rich and actionable insights from social media. They will not only protect their pricing, but also ensure that their business is in the best possible position to take advantage of the certain consolidation in the market. Proceed with caution because the shake-up is inevitable and rapidly approaching.

4 comments about "Are Buzz Monitoring Companies Racing Towards a Cliff?".
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  1. Katie Paine from Paine Publishing, April 20, 2010 at 9:55 a.m.

    I couldn't agree more. As someone who uses monitoring companies to provide data and analysis to my clients, the vast majority of services aren't accurate enough to provide an accurate basis for analysis.
    The other problem is that unless and until companies realize that the content that these firms are monitoring impacts the entire company, not just PR or Marketing, it will remain a minor (and disposable) service. Only when you integrate the monitoring into customer service, business intelligence, competitive insight and market analytics will it be seen as truly valuable

  2. Fadl Al tarzi from SocialEyez, April 21, 2010 at 12:47 a.m.

    Definitely very true. We've been closely studying this market for the past year and couldn't agree more - even in less technologically advanced regions such as the Middle East, where our group is based. As a matter of fact, the Cliff may be even closer in our predominantly Arabic speaking region, since the vast majority of technologies out there are simply incapable of analyzing Arabic text. The real value is in being able to offer concise & actionable reports which decision makers can read & learn new insightful information - they keyword being information, not data. I'm happy to say that SocialEyez (www.socialeyez.ae) has managed to do so, through investing in Natural Language Processing technologies, but more importantly in qualified analysts. Technology cannot replace people, at least not yet!

  3. Gray Dudek from Infegy Europe, April 21, 2010 at 5:32 a.m.

    Great article.

    And I agree - continually evolve, provide deep-actionable and accurate insights or fall of the cliff...

    At Infegy, creators of Social Radar, we have long maintained our position within the Research, Insight & Analytics arena versus generic 'listening' and for this reason we have had to have Natural Language Processing in place for over 4 years now. We have also had to develop simple NLP onwards internally, using a number of different bespoke algorithms & partnerships, to keep up with the changing pace of online conversations and emergence of new words / phraseology across languages and continents.

    We agree that convergence is going to be seen in the over-saturated 'listening platform' market and we encourage this because this will pave the way to much needed regulation and common benchmarking abilities.

    This will ensure that clients are able to safely review and procure systems to help and support Social Media optimisation and research for the future and not have to worry about inaccurate (yet slickly sold!) systems damaging their businesses in this critical economic year and beyond.

  4. Patrick Boegel from Media Logic, April 22, 2010 at 3:07 p.m.

    The issue of buzz monitoring really boils down to how one gains maximum value from the quantity of data you receive.

    There was some good discussion over at Jason Falls SME blog on this same topic. http://www.socialmediaexplorer.com/2010/04/02/where-social-media-monitoring-services-fail/

    You simply can't wait for software to make this work happen alone, price points not withstanding. You need a human approach to the process to get to the heart of the matter. It is not the technology that needs to get better, it is getting past the notion that the technology alone will provide the rich and actionable results.

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