Technological innovation in digital communications, epitomised in the shift from the informational web (Web1.0) to the interactional web (Web2.0), provokes new opportunities and challenges for social research. Web2.0 technologies, particularly the new social media (e.g. social networking, blogging and micro-blogging) as well as the increased accessibility of the World Wide Web through highly portable and prevalent devices like smart phones, tablets and netbooks generates new forms of data which are of significance for social research as well as new methods and techniques for analysing this kind of data. Even though we are in the midst of this rapid innovation, it is nonetheless possible to distinguish three basic lines of argument about its current and prospective impact on social research. Some commentators suggest this innovation generates methods and data that can act as a surrogate for more traditional quantitative and qualitative research designs such as experiments, sample surveys and in-depth interviews. Others argue that digital communication technologies re-orientate social research around new objects, populations and techniques of analysis. It can also be argued that digital social research augments, but needs to be used in conjunction with, more traditional methods. C. WrightMills’ classic statement of The Sociological Imagination is used to clarify the distinctive contribution of digital social research; what can it do that traditional methods cannot in understanding how social relations are constituted, how they can change and how they generate social identities. It is argued that digital social research, particularly the analysis of new social media, is distinctive in capturing naturally occurring or ‘user-generated’ data at the level of populations in real or near-real-time. Consequently, it offers the hitherto unrealisable possibility of studying social processes as they unfold at the level of populations as contrasted with their official construction through the use of ‘terrestrial’ research instruments and curated data-sets. Realising this research potential entails the development of digital ‘observatories’ such as the Cardiff Online Social Media ObServatory. The paper concludes with a discussion of the political and ethical, as well as the technological, implications of observatories, focusing in particular on tensions between the ‘panoptic’ and ‘synoptic’ powers of digital observatories and the allied possibilities of a ‘signature science’.