Innovation around what consumers want is essential, but identifying what consumers want requires listening. The explosion of social media intelligence offers a vast opportunity to listen and engage with customers to shape products and services that tap into unmet demand.

Social media is the fastest growing media in history. Today, more than three in five Internet users engage in social media and usage continues to grow every day. In fact, NM Incite research reveals that one-quarter of social media and online discussion mentions a product, service or brand. And this exposure to positive buzz can drive additional sales.

The opportunity to engage with and listen to consumers via social media is clear, and more and more brands are finding it essential rather than optional. “However, the wide range of opportunities given by social media creates uncertainty for many reasons,” says Brad Little. “How do we engage the right way? How do we measure the influence of paid media against earned media? How do we implement what we learned from social media into our organization?” While there are many examples of both hits and misses when it comes to social media, using the right tools, metrics, and appropriate strategy, brands can leverage social media intelligence for competitive advantages and build successful demand.

One success story demonstrates how social media was used to reshape a baby diaper campaign with enhanced results by combining both listening and asking research. The traditional survey results showed that the majority of consumers believed that “environmentally friendly” was the most important product attribute. But in authentic, online conversations, consumers indicated that “organic” and “avoiding diaper rash” were the most important product features. The social media analysis revealed a more accurate picture of consumer sentiment around product desires. This lead to a new campaign theme centered on “Caring,” which produced phenomenal results for the brand.

To win in this new business model, a company must stop fine-tuning the supply chain and shift to an information model built around the rapidly changing demands and needs states of their most profitable consumer groups. It means an end to constantly pushing products to consumers with one-way advertising and move to a new model where adding customer value, transparent two-way feedback loops and conversational skills are the focus.

In the past six months, the index has plummeted to a record low 77 points from 84 points. The catalyst: Latin America, Russia and other emerging nations are now feeling the full effects of a recession that began in the United States, officially, in December.

Though consumer anxieties about the economy take many forms, the most widespread fear centers on job loss. For the first time in the Nielsen survey, it was global consumers’ top concern, ranking No. 1 in 31 out of 50 countries surveyed.

Six months ago, only 9 percent of respondents cited job security as their primary worry. Now, nearly a quarter (22 percent) indicated they were more worried about going without a paycheck than over issues like work/life balance and the economy overall.

“With global redundancies affecting every industry, the economy and job security have eclipsed all other concerns in life today,” said James Russo, Vice President of Global Consumer Insights at The Nielsen Company.

Declining confidence has changed spending habits, with 70 percent saying they have taken steps to save on household expenses. Purchases of new clothes and out-of-home entertainment are the biggest casualties, with 56 percent and 53 percent of respondents cutting spending in those areas respectively. Forty-five percent have cut down on takeout meals, and 41 percent have switched to less expensive groceries.

Even when the economy improves, 40 percent will continue to try to save on gas and electricity, down from 45 percent economizing in that area now. And more than 20 percent will continue to look for less expensive groceries, cut down on takeout meals and buy fewer new clothes.

U.S. Confident, But Not as Much as China

In contrast to global worries, the confidence of U.S. consumers dropped only slightly, to a score of 80 from 82 and 83 for the second and first halves of 2008, respectively. (For the sake of reference, overall U.S. consumer confidence indexed at 100 during the second half of 2007.)

The modest U.S. decline may be a harbinger of better times. “We may be at, or at least very near, a bottom in this economic cycle,” Russo said. “Specifically in the U.S., while [consumers are] clearly adjusting their spending and savings, with 40 percent stating they are paying off debts and putting into savings. Americans are increasingly optimistic.”

Indeed, nearly 20 percent of Americans polled predicted an economic recovery within the next 12 months. Internationally, nearly one in five (23 percent) said their countries will emerge from the recession within a year. The Vietnamese and Indians made this prediction most frequently, with response rates of 60 percent and 56 percent, respectively.

Despite consumer confidence falling overall, the survey revealed interesting disparities among respondent nations. Consumers in Indonesia, Denmark and India seemed to be the most optimistic, with confidence ratings of 104, 102 and 99, respectively. Still, 77 percent of those polled across the globe indicated their homelands were in recession, up from 63 percent who said the same thing six months ago. Surprisingly, 65 percent of Chinese respondents denied there was any recession in progress at all.

“While China’s economy has undoubtedly slowed, February retail sales are still 15 percent up on last year and many Chinese consumers now believe the next 12 months could be a good time to go back to investing in stocks and property,” said Chris Morley, managing director, The Nielsen Company China.

Nonetheless, the weight of currency devaluations, weak export markets and falling commodity prices caused emerging markets like Russia (down 29 points to 74), UAE (down 21 points to 89) and Brazil’s (down 15 points to 82) to turn in consumer-confidence figures that had plummeted significantly. Consumers were the most pessimistic in South Korea, with consumer confidence score of 31, Japan (42) and Latvia (48).

Perhaps the survey’s most telling finding was that Latin America has seen its confidence shaken. “Six months ago as developed markets hurtled towards the epicenter of a global recession, Latin America was the world’s most optimistic region,” Russo said. “However, it hasn’t taken long for the tentacles of the global recession to reach them.”

The Nielsen Global Consumer Confidence Index, compiled twice a year, tracks spending habits and concerns among 25,420 Internet users across 50 countries. Respondents were surveyed between March 19 and April 2.

Download the report.

More and more researchers are waking up to the reality that mining the growing volume of conversations on blogs, message boards and social networking sites (i. e., “listening” to consumers) can provide timely, penetrating insights on a wide range of issues and brands.

A series of parallel studies we conducted with Procter & Gamble demonstrates that both surveys and listening are often required to tell the whole story. We looked at a number of brands and products: everything from orange juice, to razor blades, to the infomercial hit, the Snuggie.

While surveys provide a sense of size or magnitude but are not ideal for capturing passion or intensity. That’s where listening comes in. Both magnitude and intensity are essential to capturing the “energy” associated with consumer beliefs. Perhaps the most significant finding of our investigations is that when it comes to deciding the best course of action to pursue in the marketplace, understanding intensity can be just as important as understanding magnitude.

One real-world case in which “listening” to consumers informed a course correction for Tropicana, was when they redesigned their Pure Premium packaging. After tracking intense commentary on the web, the brand went back to its original iconic look.

“What we didn’t get was the passion this very loyal small group of consumer have,” noted Neil Campbell, President, Tropicana North America. “That was something that came out in the research.”

Asking is More Left Brain… Listening is More Right Brain

Another brand that employed listening was Snuggie, the blanket/robe hybrid that became a viral web sensation, spawning tributes, You Tube parodies, and enough buzz to land it on the “Today Show.” “We were definitely in on the joke,” noted Scott Boilen, CEO of AllStar Marketing, the firm behind the ads. “Do we expect a family to wear these to a football game? No.”

Tracking Snuggie conversations online and employing Nielsen Online’s Brand Association Map (BAM), the results show responses and associations with the brand that are more “right brain,” allowing for more emotional, immediate and contextual understanding when compared with the survey responses.

Chief among these thrifty advertising alternatives – the auto-themed Speed Channel, which Republicans are 52% more likely to watch, compared with the average American.

In comparison, Republican voters are 48% more likely to watch FOX News and 33% more likely to watch Country Music Television. 

The takeaway: well-placed cable advertising can reach core Republican constituents at a more favorable CPM.

Nielsen’s report is based on a survey of 40,000 registered U.S. voters, conducted online on September 30. 

The report’s findings track the TV viewing habits of Republican, Democratic, and Independent voters, pinpointing which TV networks reach the largest percentages of voters of each political affiliation.

View Nielsen PreView’s report.

Read coverage of Nielsen’s findings in The Independent and The Hollywood Reporter.