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03/01/13

What is Netnography and How Can It Benefit You?

Friday, March 1, 2013, by Louis Sakoda, Harrison Hayes, LLC

With the exponential increase in the general population's online presence over the last few decades, researchers have tried to capture the internet's true potential. "Netnography" is a fairly new concept that researchers are using to gain access into the minds of a widespread consumer base via cyberspace. So what exactly is Netnography? What are its advantages? Who is using it and what are they using it for? To find out, we must first understand its origins.

Netnography is simply an extension of ethnography. Ethnography is defined as "the study and systematic recording of human cultures; also: a descriptive work produced from such research" (Henning, 2011). Some of you may have been the subject of an ethnographic study where researchers observe your behaviors, attitudes, purchasing decisions, etc. in order to discover opportunities or validate concepts. This process can be very expensive and extremely time consuming. The reliability of the data has been a subject of debate as well. Some opinions express a concern for consumer behaviors to be skewed as they know they are being observed and thus might not act in the same manner as they normally would. Because of the surveillance method used in ethnography, the number of subjects that can be observed is greatly limited by time and money. This is where Netnography truly shines.

Netnography utilizes various online tools such as targeted forums, focus chat rooms, blogs, etc. to reach its subjects. These tools are set up and monitored by the researcher whom can direct or redirect the dialogue according to the specifications of the client. Some subjects are incentivized to provide their opinions, and others may simply have a vested interest in a product or service and state their opinions for free. So how is this better than ethnographic studies?

In theory, the data that is provided in Netnographic studies is considered to be more accurate. This is because the subject is in a remote location, is allowed his/her anonymity, and is not bullied by a dominant respondent in a focus group. As a much less intrusive research tool, this has a profound effect on the opinions that are expressed. People are much more inclined to provide truthful, unbiased responses in this type of online environment. Netnography is also vastly more cost-effective than ethnographic studies. The main costs that a researcher would incur might be the setting up of the online Netnographic tools and paying respondents to go online and provide their "expert" opinions. Now that we have a better understanding of where Netnography came from and the benefits that it can provide, let us explore why it is important and how it is being applied in the real world.

"'More than 50% of Fortune 500 companies have made open innovation an integral part of their innovation strategy.' Open innovation extends to consumers, embracing their 'knowledge, experiences, creativity and ideas [and] are understood as valuable partners'" (Henning, 2011).

This is an important concept as businesses understand that consumers are not just people to sell to anymore. They are the most important tool in conducting market research and concept validation. More and more companies are now developing ideas for their innovative initiatives by using an open-source strategy. So what exactly are companies needing consumer opinions for?

We see a lot research conducted in the realm of "innovation." We hear this word a lot, but in this context, we refer to it as developing fresh, creative opportunities in the marketplace. Another area in which Netnography is greatly utilized is exploring new products and/or new industries. We see this often with manufacturers wanting to extend their reach into a new realm to generate more revenue. Since this uncharted territory is obviously not a core competency, they must conduct an ample amount of research before making the leap. One other main use of Netnographic studies is to gain additional perspectives on existing sectors (Henning, 2011). Going back to the example of a manufacturing company, they might not want to make any revolutionary changes, but still would like to explore new revenue streams. In this case, consumer insight or the opinions of experts in the field might uncover a new use for an existing product within one of the company's already existing competencies.

The use of Netnography as a research tool is limitless. Ultimately, it is a cost-effective, unobtrusive, and accurate way of uncovering the data that companies are constantly seeking. As our global population's online presence continues to increase and our technological tools at hand become more effective, we will see Netnography become more and more prevalent.

Citations 1Henning, Jeffrey. "Review of a Decade of Netnography Research." Review of a Decade of Netnography Research. N.p., 27 Oct. 2011. Web. 01 Mar. 2013.

2Southern, Richard. "What Is Netnography and How Can It Help You?" Ezine Articles. N.p., n.d. Web. 1 Mar. 2013.