VS. DIGITAL PRIVACY A Consumer Study

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1 SOCIAL LISTENING VS. DIGITAL PRIVACY A Consumer Study Your Practical Guide For HOW TO ENGAGE CONSUMERs BASED ON THEIR ATTITUDE TOWARD PRIVACY

2 SOCIAL LISTENING V S. DIGITAL PRIVACY Brou ght to you by : Exe c u tive S U M M A R Y To uncover and understand consumers opinions, emotions and behaviors, companies now regularly listen to conversations in social media about brands, products and services. But doing so raises new questions related to online eavesdropping and digital privacy. Do consumers know companies are listening? Do they find it acceptable? Which kinds of comments do they want companies to respond to? And looking at the big picture, does pervasive social listening turn companies into an online Big Brother? J.D. Power and Associates (JDPA), in association with NetBase, conducted a survey in December 2012 in order to answer these questions. While the survey results differ by age group, they reveal a striking level of ambivalence about social listening: Surprisingly, 32% of consumers of all ages and 38% of Millennials (18 24-year-olds) have no idea companies are listening to what they say Over 40% think listening online intrudes on privacy, even though this is social media Nevertheless, nearly 50% say companies should listen to improve products and nearly 60% want companies to respond to complaints On the one hand, many consumers feel that they should be free to talk about brands without the company listening in. On the other hand, just as many know that companies are listening and expect them to respond to both compliments and complaints posted online. SO... what s a company to do The take-away for CMOs, digital marketers and others responsible for social media strategy is that you need to be telepathic which you re not, so the next best plan is to: Don t just listen, understand first Consider the context of updates and conversations Engage with the intention of delivering mutual value Demonstrate how listening doesn t intrude but instead builds relationships Do those things and consumers are much more likely to understand and appreciate the upside of social listening.

3 About the Survey To understand how consumers of different ages feel about companies listening to conversations in social media, JDPA, in association with NetBase, conducted a survey in December 2012 of 1,062 U.S. consumers ages Following are the questions asked, percentages for each possible response in five age ranges, and interpretations of key findings. Video sharing spans all generations, but companies can tailor content specifically for the platforms used most by specific age groups. What Are Different Age Groups Doing on the Web? When it comes to the general usage of web tools, social networking (Facebook) ranks highest among consumers. Ninety percent of Millennials (18 24-year-olds) use social networking platforms compared to 71% of Boomers (45 65-year-olds). As for other web tools, Millennials use the web for video sharing (75%), photo sharing (43%), shopping (42%), and microblogs (39%). Similarly, Boomers next-most-common web activities are shopping (38%), video sharing (32%), ratings/reviews (19%) and photo sharing (16%). Social Networking 90.4% 81.7% 84.5% 77.3% 70.8% Blogs 36.5% 36.9% 28.2% 21.0% 14.2% Microblogs 39.1% 35.8% 29.0% 30.9% 15.8% Photo Sharing 42.6% 38.8% 29.4% 17.7% 16.2% Video Sharing 75.7% 64.2% 53.5% 51.9% 31.6% Shopping 41.7% 55.2% 55.1% 48.6% 37.5% Location Sharing 15.7% 16.0% 12.2% 3.9% 2.4% Rating and Review 25.2% 37.3% 36.7% 27.6% 19.0% Bookmarking and Tagging 32.2% 32.8% 20.4% 16.6% 13.4% Figure 1. General Usage of Web Tools by Age Group

4 Who Knows Companies Are Listening? Although year olds are the most likely to be using social networking sites and Twitter, they are the least likely to realize that companies might be listening to them online (38%). Following Millennials, older Boomers are the second most likely not to know companies are listening (32%). Did you know companies may be listening to what you say online? No 38.3% 31.0% 31.0% 28.2% 32.4% Yes 61.7% 69.0% 69.0% 71.8% 67.6% Figure 2. Awareness of Social Listening by Age Group Be more open with consumers when it comes to social media. This will also help to educate consumers about social listening. Do Consumers Want Companies To Listen Online? A majority of consumers say they do want companies to listen but only to what they say about that company. Of those who don t like Big Brother companies, Boomers put up the biggest fight (36% said they don t want companies listening to what they say about them online), while only 17% of Millennials said no. At least 20% of each age group (and 25% of year-olds) don t yet know how they feel about companies listening. Do you want companies to listen to what you say about them online? Don t Know/ Not Sure 25.2% 21.3% 20.0% 23.2% 23.3% No 17.4% 18.3% 16.3% 17.7% 36.0% Yes 57.4% 60.4% 63.7% 59.1% 40.7% Figure 3. Approval of Social Listening by Age Group This is another opportunity for companies to raise awareness (especially with Boomers) and set the standard on engagement.

5 Should Companies Respond When Consumers Talk About Them Online? Although 17% of Millennials don t want companies to listen and 25% don t know how they feel about listening, 64% want companies to respond when they re talked about. Although 36% of Boomers don t want companies listening and 23% don t know if they do, 50% want companies to respond when they re talked about. Millennials (64%) account for the highest number of respondents who want companies to respond, while Boomers are the lowest. Do you want companies to respond to you when you talk about them online? Don t Know 18.3% 17.5% 15.9% 18.8% 17.0% No 17.4% 23.5% 20.0% 17.1% 32.8% Yes 64.3% 59.0% 64.1% 64.1% 50.2% Figure 4. Should Companies Respond When Mentioned Online? There s clearly a growing desire for companies to respond to consumer issues online but only if a conversation is directed toward them.

6 Should Companies Respond When Addressed Directly? About 65% of consumers expect companies to respond if spoken to directly via social media. Boomers are the most likely to think that listening is a form of intrusion (54%). Consumers ages and are the most likely to agree that companies should monitor conversations in order to improve products and services (over half of both groups agreed). Consumers vary on their opinions of when companies should be listening and how they should respond, except when it comes to complaints. If a consumer is making a complaint, companies better be listening and ready to respond! Companies that listen to online conversations are intruding on consumers Companies should monitor online conversations to improve products and services 40.9% 38.1% 41.2% 41.4% 53.8% 40.0% 53.7% 49.0% 56.9% 36.8% Companies should respond to complaints posted in social media (e.g., Facebook, Twitter) 62.6% 60.1% 58.8% 63.0% 49.4% Consumers should be able to talk about companies online without that company listening in 40.9% 51.1% 48.6% 49.7% 58.5% Companies should only respond to online comments made directly to them (i.e., on their Facebook page, tweeted to them, etc.) 67.0% 63.8% 63.7% 63.5% 64.8% If I make a negative remark about a company in an online post, that company should respond to me 47.8% 49.6% 40.8% 53.0% 38.7% If I make a positive remark about a company in an online post, that company should respond to me. 47.8% 44.4% 40.0% 48.1% 33.2% Figure 5. Desire to Have Companies Respond When Directly Addressed. Note: Percent figures below note respondents who agreed with the statement by rating a 4 or 5 on a scale of 1-5.

7 SO... What s a company to do Consumers in social media want it both ways: They don t want companies listening in on their online conversations (too Big Brother), but they expect them to respond to their needs. So what s a company to do? The take-away for CMOs, digital marketers and others responsible for social media strategy is that you need to be telepathic. For those of us who lack paranormal abilities, the next best plan is... DON Tjust listen. The first step is to understand what consumers are saying. Are you hearing one loud voice or a growing trend? Is sentiment up because of a product feature or a great advertisement? By understanding the full picture, you can craft responses that are aligned with your social media objectives. CONSIDER the context of updates and conversations. Are consumers reaching out to you directly or just venting to their friends? Remember that their context not yours is driving their expectations of a response. ENGAGE with the intention of delivering mutual value. In the e-commerce world, consumers have shown that they are willing to give up some level of privacy in exchange for better service. Likewise, proactive service that clearly benefits them is the best way to alleviate their privacy concerns. DEMONSTRATE how listening doesn t intrude but instead builds relationships. Your actions speak louder than your words. And the social web can magnify the positive effects of those actions.

8 Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies. NetBase delivers the enterprise social intelligence platform that global enterprises use to monitor, understand, and engage with customers in real time. Using a high-precision natural language processing (NLP) engine combined with text analytics and machine learning, our platform processes billions of social media posts to extract structured insights delivered via customizable dashboards. Our solutions enable marketing, public relations, market research, customer service, sales, and product innovation leaders to craft winning strategies faster. Clients include Coca-Cola, Kraft, HP, ESPN, Taco Bell, GfK, and J. D. Power and Associates. NetBase powers the weekly Sentiment Tracker in the Wall Street Journal and our solutions are sold globally by SAP AG. For more information, visit: NetBaseInc NetBase Solutions, Inc NetBaseInc 2013 NetBase Solutions, Inc. and J.D. Power and Associates