How social listening platforms have evolved through consolidation

Last week, Crimson Hexagon and Brandwatch announced they were merging. Same for Linkfluence and Back in April, Meltwater acquired Sysomos. Together, they point to signs that these B2B platforms are maturing and that social media is gaining acceptance as a source for customer insights.

It’s a big change since Brandwatch launched in 2005. Facebook was less than a year old. YouTube had just launched. Instagram, Twitter, Snapchat and Pinterest didn’t exist. Advertising on those platforms wouldn’t be normalized until years later. These days, the duopoly of digital advertising is still going strong; new companies become known through Instagram; and Twitter has emerged as the place to share and comment on the news.

As social media became more pervasive to consumers and, therefore, more valuable to marketers, the interest in social listening grew. Brandwatch raised a $1.5 million Series A in 2011, $22 million in 2014 and $33 million in 2015. Crimson Hexagon raised $2 million in 2010, $5 million in 2011 and $20 million in 2016. Money also poured into competitors. One founder has raised $228.5 million to fulfill his vision for a suite of tools through a startup he called Sprinklr.

“The consumer is in charge, and the brands have lost their messaging which is a net positive to me. But now for brands to take charge, they need to listen. We called it social media analysis and then four or five years later we got called social listening,” said Giles Palmer, founder and CEO of Brandwatch.

Now come the mergers. Niklas de Besche, executive director of products at Meltwater, said consolidation is necessary as the industry requires more sophistication such as using natural language processing and artificial intelligence to keep up with social media’s growth across channels and languages.

“Many smaller players are lacking momentum, growth and resources to survive on their own and must partner or join other companies to expand their product and customer footprint,” he said.

Several insiders argued that it took a while for the industry to gain hold as brands took time to figure out where social media would fit inside their organizations: marketing, research or new digital teams. Over the years, more companies hiring data scientists and integrating digital into all their teams strengthened the need for these platforms and led to winners and losers in the industry. Sprinklr is arguably the strongest with the most amount of funding.

“Social listening is not new, but until recently it was understood by younger marketers, digital natives, that understood they need to listen to social media to see if a campaign worked. Now, it’s for marketing, consumer insights and market research,” said Guillaume Decugis, CEO of Linkfluence.

As the industry consolidates, these social listening platforms have plenty of case studies to share on why social listening matters even amid the decline of Facebook usage and the increased scrutiny around data privacy.

Will McInnes, chief marketing officer of Brandwatch, said Unilever — one of the world’s biggest ice cream makers — wanted to test that notion that people buy ice cream when it’s hot. Turns out, according to Brandwatch, people are more likely to buy it when the weather is just horrible and they’d rather be inside.

Jessica Prassel, director of search and social at Mindshare North America, said her agency has long used its own technology to analyze online conversations, but supplements it with third-party platforms when the client, say, needs more real-time information or wants to combine more datasets into one system.

“Brands see value in social listening because it went beyond just evaluating comments and what was going on from blogs and forums. It’s what their consumers are saying without it being a forced interview,” Prassel said.

Social listening has helped the agency figure out how to act on these conversations. One of her agency’s CPG brands was recently mentioned by a celebrity in a sort of joking manner. The team had to decide whether to respond to the video, so they analyzed the reaction on social media to see if people were going along with it. The company decided to go along with the joke and responded by having their brand mascot recreate the same video.

“It was a decision made with speed, and social listening helped,” Prassel said.

Of course, social listening is just part of the decision-making process within brands and agencies. Mindshare touts “The Loop,” a room in its offices where they display data on several large screens that don’t just include social listening but also sales numbers and industry forecasts.

Social listening companies and marketers welcomed the industry consolidation.

Jared Feldman, founder and CEO of Canvs, a company that measures emotion for many major television networks, said consolidation means fewer companies building similar solutions and the possibility for more innovation.

“The market is evolving much more toward being insights-driven. It’s not as important to surface what happened, but rather to understand what the insight says about people or can predict about the future,” Feldman said.

The future for these platforms and the greater industry relies in part on combining insights from social media with more traditional metrics, observers said.

“The real coupling needs to be happening between the new and old school, traditional measurement and software-driven,” Brandwatch’s Palmer said. “We need to be everywhere the voice of the customer can be heard and provide an infinite knowledge of their consumer.”

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