Reading Tea Leaves with Free Data

Never before in the history of mankind (or womankind) has there been so much free data at our disposal. For the marketer or public relations professional, this is sheer gold. The tools we now have can tell us an awful lot about the people we are trying to reach, their thought processes and how they talk to each other.

Every few months we get access to new tools that take some of the guesswork out of marketing. The trick is to pull them all together. Over the next few weeks I will blog about many ways you can take advantage of all of this free information. These posts will be filed under the new Research category on my blog. Here's one example.

In the United States manufactures think a lot about confidence as a future indicator of the consumer's interest in spending on big ticket items like cars. Naturally, fuel prices are a big influence on what consumers will buy - hybrids or SUVs. Let's take a closer look and see what the data shows us.

A Google News search on the subject turned up 771 articles just today that mention "gas prices." Gas Buddy confirms that the hype is real. A gallon of gasoline in the US, as of this writing, is $2.85 - the highest since the run-up after Hurricane Katrina. Naturally, as the media hype rises, so does the blog chatter. The conversation volume mentioning "gas prices" is running about 1,000 posts per day, down slightly from late April.

So are price sensitive consumers freaked? Well, the data says they're getting there. If you take a look at the four charts below you will notice gas prices, traffic to gasbuddy.com, and blog chatter are all rising in sync. Google Trends appears to be lagging behind the other leading indicators, but that might be a function of their data not being quite as current as the rest. Meanwhile, an Indeed.com search shows that hiring at gas stations is picking up too, which may indicate that demand for fuel is hardly waning. The takeaway here is that consumers don't appear to be conserving a lot - at least yet.

Let's see if this carries over to autos. With all of the hype around gas prices rising over the past few years it would stand to reason that interest in hybrid cars like the Toyota Prius might be outstripping big SUVs like the Hummer. Well, no.

Take a look at the following charts. You will note that: Google searches for Hummer have hardly slipped, while searches for the Prius rose for a brief time but have flattened. In addition, the Hummer's blog chatter has been rising more rapidly than that of the Prius.

While none of this data is a slam dunk, the trends do lead us to a few conclusions:

* Fuel prices are a big consumer concern once they creep above $2.25 a gallon or so
* The blogosphere directly mirrors the hype in the press
* Despite the rising gas prices, interest in SUVs hasn't waned yet and hybrids are not taking off quite as fast as perhaps people think

This is great data that can help guide many marketing programs - and it's all free.

Technorati Tags: Data, Hybrids, Market Research, Gas Prices, SUVs

Comments

[Mike Abundo]

Soon, the only excuse for not seeing the future would be acts of God.

Or the singularity.

[Sexton Lovecraft]

The Free Data is on the internet - it must be valid!

Where is data for the elusive long-tail? Off the bottom of the chart.

[Ross Monaghan]

Great post about the research possibilities of the Internet. It really got me thinking.

I agree with much of what you say, but I think you're drawing a long bow on a couple of issues Steve.

A fuel price over $2.25 may be causing interest in the blogosphere, but it doesn't necessarily mean there is concern. I’d like to see an analysis of the blog post before deciding what caused the spike, and what bloggers thought about fuel prices.

Perhaps an increase in comments in the media, as you point out, translated into a corresponding increase in blog posts about the issue. Given the well know agenda setting power of the media, I don’t think that’s surprising. The ripple effect is well understood in the blogosphere. Ripplogging occurs when one story appears online, then a blog post comments on it, and another blog post springs from that. So I’m not surprised that the statistics show issues in the media are mirrored in blogs.

Three comments on your last point relating to SUVs and demand. Firstly, you talk about the Hummer. Rather than dissuading purchasers, I’d suspect higher gas prices would stimulate sales of the high-end models. Why? Because the Hummer is a status symbol. The higher gas prices are, the more “exclusive” your Hummer is. If you can afford to pay in excess of $100,000 for a vehicle, a few extra dollars filling it up aren’t really going to worry you. Sales certainly show this to be the case. Secondly, the Technorati graph on "hits per day for the Hummer" reflects the efforts of GM's marketing department. There’s a spike around the time they produced an advertisement for the Superbowl in February, and more recently, when they announced that they may phase out the high-end model. The Google search trend is interesting though. In the past few months there appears to be a slight upward trend in Prius searches, and a slight downward trend for Hummers, or is that my imagination?

[Diane Ensey]

Thank you, Steve, for showing how to actually use all of this data to come to a conclusion. Seeing these things separately, it is hard to get my head around how to use them. Watching you put them together, against one another, was a real "aha" moment.

[Diane Ensey]

Ross - one thing I meant to mention - Hummer is stopping production of its largest model and that was announcing in the last couple of weeks. That could be a source of increases Hummer buzz.

[Marshall Kirkpatrick]

While I think this is great, one problem is that buzz generally doesn't differentiate between hype and anti-hype. Hummers, for example, are pretty widely hated by some pretty vocal folks. Wired had the site fuh2.com on its hot list last month - buzz like this gets included in sheer count of mentions.

[edward cotton]

great stuff on gas prices and various searches- here from Hitwise