Here's Why Facebook Investors Should Be Thrilled About the Company's Emotion Manipulation Tests

Facebook's allegedly exploitative experiments provide an indication of the company's relevance.

Jul 7, 2014 at 10:05AM

Facebook (NASDAQ:FB) has recently been catching heat for using its members as experimental guinea pigs. Tests were conducted with the hope of ascertaining whether users' emotions could be influenced based on the stories that were displayed in their feeds. Results showed that the selection of stories did have an effect, but outrage followed soon after the experiments became public knowledge. The fact that the social media giant anonymized users in these tests has done little to ease the disquiet of vocal Facebook members and media outlets. In response, the company recently issued an apology.

While troubling implications can be derived from Mark Zuckerberg's experimentative exploits, the tests also highlight the value of the world's most widely used social network. What's more, Facebook isn't alone in its aim to better utilize emotional data. Amazon (NASDAQ:AMZN) recently used Twitter (NYSE:TWTR) posts to map the world's emotions. Investors should be excited about this developing data frontier.

Facebook's test yields predictable results
Facebook conducted its now widely publicized emotional experiments at the beginning of 2012. The company created special feeds for 689,000 users and found that giving preference to positive or negative posts made those in the study slightly more inclined to create content from the corresponding perspective. While the revelation that the social network carried out this test has sparked controversy, its results are anything but surprising; that emotions can be contagious is basic psychology.

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Few would bat an eye at the suggestion that music, writing, photographs, and video have the potential to influence a person's experiences. How a television program makes an audience feel is a factor in the advertisements that are attached to it. Songs are chosen for ads (and other video content) with the hope that they will immerse their audience in the information and message being presented. The results of the tests merely confirm what should have been apparent: Facebook has become an emotional medium unto itself.

Advertising is an emotional game
Paying attention to users' emotional states opens the door for more effective advertising. To what extent this tactic is used remains to be seen, but the public's response indicates Facebook's relevance. With digital ads accounting for an increasing portion of marketing spend, Facebook has great opportunities to grow revenue in this area. Reading, and perhaps shaping, emotional waves gives the company a greater chance of delivering relevant ad content. Paying attention to feelings and communication patterns of its users also allows Facebook to steer user engagement in beneficial directions.

Facebook uses emotional data to better shape its platform
In addition to tinkering with the emotional states of its users, Facebook has also been gathering data and shaping its online ecosystem with experiments on conflict resolution. When someone on the site contacts a friend about content that they find objectionable, they are prompted to select from a list of options that might represent their feelings at the time. Facebook then generates a selection of canned responses. According to the company, this structure yields substantially better results than free-form interchanges for resolving disputes and creating a more pleasant user experience.

The new system has also led to a ten-fold increase in conversations about controversial status updates and a five-fold increase in conversations about controversial share posts. This is just one example of the ways in which the social network actively guides users' emotional states.

Tell the Internet how you feel
Facebook isn't the only social network that could provide relevant emotional data to advertisers. May saw the unveiling of a partnership between Amazon, Australia's scientific research agency CSIRO, and mental health group The Black Dog Institute. The group's goal was to map the world's emotions based on Twitter posts. Amazon Web Services created the tool to collect and process tweets, while CSIRO developed algorithms to analyze positive and negative emotions indicated by the user-generated content.

The study was put forth under the auspices of mapping and improving mental health, but such feedback could also be of tremendous value to advertisers. In fact, it's not unreasonable to believe that advertisers are already receiving and integrating similar information. Cloud gatekeepers like Amazon have access to massive swaths of user data that are already being sold for marketing purposes. Mapping the emotions of individual users and population segments is a logical progression, and one with incredible possibilities.

Foolish final thoughts
It's easy to look at emotional mapping and manipulation through social media and envision dystopian applications. While there are legitimate concerns related to the issue, much of the outrage surrounding Facebook's tests ignores the nature of the company and its platform. Facebook is a social entertainment product and not a tax-funded public utility.

Escaping data mining on the Internet has become increasingly difficult, but the public can easily choose not to channel large segments of revealing data through sites like Facebook and Twitter. The fact that users opt to stick with these sites, even in light of apparent privacy concerns, is one thing that makes them so compelling.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends, Facebook, and Twitter. The Motley Fool owns shares of and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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