Ruslan Kogan, founder of online electronics retailer Kogan.com, just took to VentureBeat to extol the virtues of Google Trends and explain why it has killed traditional market research. Kogan points out what we here at Frequency Group strongly believe – that new tools for sensing consumer demand have displaced traditional market research. Kogan has some strong examples and personal stories, and it is well worth a read. Where he missteps, however, is in 1)not understanding that without a scale of interest, the trends line is only of limited use and 2)that interest equates to buying potential.
On the first point, to those unfamiliar with Google Trends, the service shows you the amount of searches done on a particular phrase over a set time. What it does not do, and this is crucial to using the tool correctly, is give you a scale. You can see that a trend is going up or down, but you have no way of knowing if 5 people searched over a month, or 5 million. You just get the line. To use Google Trends accurately, you MUST find external data to provide some insight to the level of demand, not just the path it is currently taking.
The second point is more damning of Kogan’s thesis. I, and presumably you, have searched for things that I have no interest in buying. I look at what the 4K TV market is doing all the time because I think it is a misguided technology push that no consumer is asking for. Many people are looking at the iPhone 5C not because they want to buy it, but because they want to know what makes it different from the 5. Search interest alone is not sufficient to prove there is a market. Again, outside sources are needed to verify the trend lines and show that consumers are willing to pay for the product.
Like anything else, Google Trends is a tool in your toolbox, a highly useful one but not alone. It is safe to assume the Kogan uses more than this free tool to run with electronics retail business, so it is disappointing when he fails to mention that when talking about Trends uses. This could be very misleading to those unfamiliar with Trends and damaging to their businesses.
Below is his original piece, all smiley-faces are his own:
is critical to every business. Traditional market research is based on sampling, such as focus groups, and very often delivers skewed results and bad information. What people say and what people actually do are two totally different things.
If they use their tools correctly, the new age of Internet marketers have a wealth of information at their fingertips that give them a significant advantage over the competition.
A recent Forbes article (among others) suggested, and showed, that the iPhone 5s is three times more popular than the iPhone 5c. The article had a lot of graphs, research, and sales data from multiple sources in it. To compile all the information in the article would have taken hundreds of hours and cost thousands of dollars. My initial reaction after reading the article was, “No shit, Sherlock.”
Given my company relies on being on top of consumer electronics trends, I had done 15 seconds of research a few days prior which had given me the same information:
This Google Trends information shows, in seconds, that the iPhone 5s is three times more popular than the iPhone 5c. This exactly correlates with the hundreds of hours of research and sales data analysis of non-readily available information that is exhibited in the Forbes articles. Much easier to do a 15 second look in Google Trends, isn’t it?
Any businessperson who is using old school market research techniques needs to wake up or move aside for someone who understands efficiency and accuracy.
Google Trends is a great tool that shows you comparative Google searches. This data is the equivalent of “brain to keyboard with no filter.” In my opinion, you can’t get better market research, especially for a company like Kogan which relies on servicing demand, rather than creating demand.
As a digital marketer, having the right information at your fingertips is critical for all sorts of business decisions. For instance:
1. We know that Air Conditioners sell better in summer and heaters sell better in winter
2. We know that we should be making twice as many 32″ LED TVs as 42″ LED TVs
3. We know to concentrate on 4K TVs over OLED TVs as our next big product launch:
4. We knew in mid 2011 to slow down our production of LCD TVs and concentrate on LED TVs
5. We launched the world first sub $500 Netbook in late 2008 and discontinued it in mid 2011
6. We know we’ve missed the boat if we want to sell Michael Jackson tshirts
As you can see, Google Trends is a marketers best friend. It gives you timely and accurate information which you can use to make real business decisions. Nothing beats brain to keyboard with no filter.
Don’t waste your time on old school reports produced using old school methodologies. At worst they are inaccurate, at best they are overpriced and inefficient.
What do you think of old school market research versus new methods like analyzing Google search data?
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