The Federal Reserve Plans To Monitor Facebook, Twitter, Google News

The New York Federal Reserve Bank is embarking on an ambitious social media monitoring project. Starting this December, the Fed will be monitoring Facebook, Twitter, and the broader web to gauge public response to economic policy. Civil libertarians and anti-big government activists are upset, but should they be?

As Occupy Wall Street gains stream, the New York Federal Reserve Bank wants to know—for better or worse—how they are perceived. And they're going to monitor social media to figure it out. 

A vendor proposal request (or RFP) from the Fed, which describes a "Sentiment Analysis and Social Media Monitoring Solution," surfaced on Scribd on September 25, and was quickly featured on gonzo finance blog Zero Hedge.

According to the document, the Fed is now evaluating bids for a social media analysis system that will mine data from Facebook, Twitter, YouTube, blogs, and web forums—beginning in December. In order to "handle crisis situations" and "track reach and spread of […] messages and press releases," the project will also identify a number of what they call "key bloggers and influencers" to target with their outreach, and presumably monitoring, efforts.

A Federal Reserve Bank of New York spokesperson, Jack Gutt, told Fast Company:

"This is a new effort for the New York Fed that is under consideration at this time and I am therefore not able to provide any details. The reason for contemplating such an effort is to get a better sense of the relevant concerns and discussions that are taking place in the public domain in order to improve our communications and engagement with the public."

Unfortunately for the Federal Reserve, they are facing a hostile climate in terms of public relations right now. Sluggish economic recovery efforts have increased public resentment of both the government and major investment houses. Big banks such as Bank of America drew ire for a decision to raise debit card fees, broadly. Meanwhile, the Occupy Wall Street movement—a kind of left-wing counterpoint to the Tea Party—is gaining large numbers of sympathizers with vociferous, if sometimes incoherent, anti-big business messages.

The Fed's social media monitoring project appears to be large-scale. It shows the institution's interest in much more than just the thoughts of a few financial bloggers and economists. In their RFP, they have requested that vendors offer a monitoring system that can handle international traffic and social media content in multiple languages—in other words, the Fed wants to monitor social media worldwide.

Apart from social media sources, the Federal Reserve also specifically named the Associated Press, CNN, Wall Street Journal, and Google News' stable of aggregated content for in-depth content analysis. The Fed appears, judging from the bid proposal, to be especially interested in finding out if "there is an ongoing trend of negative sentiment in the financial industry" and in tracking public sentiment for specific keywords and companies or organizations.

While Zero Hedge writers justified Orwellian concerns about a quasi-governmental institution monitoring social media to gauge and influence citizen perception of the economy, similar projects have been going on for a long time.

High-level web and social media analytics are a staggering growth industry; private companies such as Google, Apple, and Procter & Gamble have monitoring schemes that would make any government agency green with jealousy. Fast Company recently reported on predictive analysis companies—who offer their high-level clients the ability to predict what customers want to see on company homepages—and on creepy/cool real-time analysis of customers' habits at firms like eBay and Adobe. The Fed's decision to monitor social media sentiment is, however you want to look at it, a natural extension of what's happening in the private sector.

As the Fed goes, so does government in general. Social media monitoring has become a hot topic for government agencies and political candidates. With the 2012 election heating up, nearly all major political candidates have created impressive social media monitoring systems. Firms such as eCairn are promoting social media analysis solutions for the election and the Republican Party is focusing on social media in a big way. While the Federal Reserve's plan to monitor social media might be considered creepy, it's also the future.

[Front Image: Flickr user 85mm.ch; Image via Wikimedia]

For more stories like this, follow @fastcompany on Twitter. Email Neal Ungerleider, the author of this article, here or find him on Twitter and Google+.

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10 Comments

  • Bob Kutner

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  • wendykf06

    I have to echo Denise Wirtz - if you distort your coverage of a topic with sweeping slanted statements, it creates an ugly skew to the article, making me question every statement. Looks to me like you are working in plenty of extraneous keywords to bolster your SEO rather than providing straightforward reporting. 

  • asg749d

    Of course they are going to be upset -it is a de facto knee jerk reaction. 
    Social media outlets are conduits for the voice of the customer -tuning in to that voice will provide insights that the Federal Reserve, and any other company using that technology, can use to tweak/revise its policies and make them more relevant to those it impacts. 
    This is not about tracking you and me as it is about constructing patterns of customers reactions/perceptions. 

  • John E Walker

    As one who will continue to disagree with the pure existence of a Central Bank, let alone it's policies and principles, I would find it disconcerting that they could track me and anyone else who shares my thoughts.  The fact of the matter is that The Fed is an unconstitutional, private institution contracted by the government to print our paper money and loan it to us at interest.  Because of The Fed (and our government for answering to the Fed) we have a currency backed by nothing other than debt.  Why should our government answer to anyone other than the American people? Is that not what set us apart from other nations when we declared our independence and drafted our Bill of Rights and Constitution?  Many former presidents have spoken out against a central bank and many economists have predicted the consequences of this central planning.  If only our voters would research these facts rather than taking the mainstream media's word for everything, we would see the drastic change we desperately crave.

  • Bud Equi

    Interesting to see a government based concern is interested in listening to the "chatter" to better understand how people feel. Novel. This would seem to be exactly what many average people want to actually happen. Monitoring social media is not really difficult if you either have lots of people following twitter exchanges, facebook, etc. Or a computer based effort doing the same with key word tracking. Either way a company or government body can get a read on how they are reaching people without taking any action other than observing. Yet the instant response of the anti-government side is a blocking action. Can there be for one time at least, be a more constructive response than proping up George Orwel up and crying foul.

  • Denise Wirtz

    Just to be clear, OWS is *not* a left-wing counterpoint to the Tea Party. At all. That is a misguided statement, at best. OWS is comprised of people on all points of the political spectrum, but is not itself partisan in any way. Please be aware of that before creating an incorrect image. Otherwise, interesting article.

  • GAM

    The USA should end the Federal Reserve. Most people don't understand the FED and why and how it operates.  To understand the FED there is one video everyone should watch it is called "The Creature From Jekyll Island". It talks about the FED, how it came into being, and how it operates. It is very enlightening. You can find it at:
    http://video.google.com/videop...