of the by-products of living in a country founded on the principle of
free speech is that virtually everybody has an opinion. Whether it's
commenting to their neighbors on the latest Sopranos plot twist,
talking to co-workers about the current administration, or even
grumbling to their spouse about their like or dislike for a new TV
commercial, people want to feel that their views are important enough to
be heard and counted.
the past eight years, the Internet has emerged as the public forum for
many of these viewpoints. But while most posted comments end up quickly
lost in the vastness of the World Wise Web, there is one area when
online opinions are becoming increasingly important: market research.
The Internet may have stalled as an advertising and commerce vehicle,
but it is quickly gaining favor as the platform of choice for formal
surveys on everything from the state of the economy to the latest in
packaged snack foods. Dean Wiltse, CEO of leading online research firm,
Greenfield Online, says Internet surveys now account for about 27% of
total quantitative market research, up from about 15% from last year and
7% in 2000.
growth is occurring across every segment, but online is becoming
especially important in advertising research. Not only is it far cheaper
than traditional phone and face-to-face polling, but the results can be
compiled and analyzed in near real time, enabling media buys and ad
agencies to tweak their creative or their media weighting on the fly.
Online market research brings with it other advantages as well.
"Unlike with telephone tracking, you can provide people with some
visual stimuli by throwing up a couple of stills to prompt someone when
you're asking if they remember an ad," says Eileen Campbell,
president and CEO of leading advertising research firm Millward Brown.
"Plus it's a 24/7 world, so you can get some people you may not get
during traditional phoning hours."
rise of online is coming at an interesting time for the U.S. market
research community. On the surface, market research seems to be chugging
along quite nicely, accounting for $6.2 billion annually. But along with
advertising, market research has always been one of the expenditures
that are especially vulnerable in a soft economy. "The research
budget is the second part of the marketing budget to be slashed if the
numbers are not coming in," explains Elliott Ettenberg, CEO of
strategic marketing consultancy Ettenberg and Company and the author of The
Next Economy. "The first thing to get slashed is advertising,
the second things is research, and the third ... is consultants.
almost counterintuitive," add Elsye Gammer, advisory director for
the Marketing Research Association. "But marketing research has
always been an area where people say, 'Hey, look, my gut tells me what
my customer wants. It's nice to have the research to back it up, but if
I have to cut my budget, I'll trust my gut.' So people float along for a
year or two without doing any statistically significant research and
they start to see erosion in their sales numbers and they bring back
argues that while this type of strategy may be justified under normal
circumstances, it is disastrous in today's environment. "Things are
changing much quicker," he says. "The customer is changing,
and more importantly, the values of the customer are changing faster
than business can react. For the first time ever in my 30 years of
working with companies who deal with customers, most companies don't
understand what's going on."
their credit the people in advertising and media buying community seem
to have caught on to this quicker than others. Campbell says that while
advertising budgets have certainly been hurt in recent years, her
company's work both in testing creatives before they air and in tracking
the effectiveness of campaigns while they're running has actually been
on the rise. The reason for that, she says, is that in these difficult
times, advertising dollars have simply become too valuable too waste.
money was free, you'd throw anything on the air and if it didn't work it
was no big deal," Campbell says. "That's certainly not the
case now. People are being much more frugal with their media spend, so
they want to make damn sure the ads they're putting on the air are good
addition to providing the tools to predict consumer behavior going
forward, the market research industry is also a bellwether for the
overall economy. Steven Campana, executive vice president with Nanuet,
N.Y.-based Target Research Group, says market research spending
traditionally picks up about three to six months before an economic
revival, a trend that seems to be repeating itself. While many companies
may not be spending a lot on advertising now, they are beginning to
think about their position in the marketplace and how it can be changed
to their advantage as business -- and their advertising -- picks up.
"We're just revamping our branding strategy, so we'll probably
begin doing more focus groups and online surveys as we look to
solidify our brand position," says Daneen Kiger, Marketing
development manager with consumer data storage company Imation.
all market research, advertising research can essentially be divided
into two main categories; qualitative research, which is almost
exclusively focus groups, and quantitative testing, which involves much
larger samples and tends to be survey-based.
in the quantitative category that online has had its biggest impact. For
much of the past three decreases, the bulk of quantitative research has
been done in one of three ways: mail surveys, phone polling, and what
are know as mall intercepts--literally stopping people in shopping malls
and offering them incentives to fill out a survey.
three are now being impacted by the rise of online, but Wiltse notes the
biggest drops have been in phone and mail. "Spending on mall
research decreased from 16% to 15% of total research spending in 2001
and 2000," he says. "Telephone decreased from 48% to
most obvious reason for companies' gravitating to online research is
cost. Joel Friedman, founder of SurveyWriter.com, said a typical market research survey, regardless of what platform
is used, can quickly escalate into the six figures. But online at least
helps keep those expenses in check. Atypical online survey costs around
$8 per CPI (cost per interview) -- about the same as mail, but
considerably cheaper than the $30-$50 CPI for telephone and mall
intercepts. "Most of that's because of the people you need to hire
either do the phone interviews or recruit people in the malls,"
Friedman explains. "Both of those can be very labor
almost as important is the fact that consumers seem to prefer online
surveys, finding them not only less intrusive but also more convenient.
"A lot of people are willing to participate in surveys, but
only if it's done on their timetable," says Beth Rounds, senior
vice president with Custom Research Inc., one of a host of firms now
outsourcing their online work to companies such as Greenfield online.
the advertising world, online has become especially popular as a way to
track an ad's effectiveness. "Ad tracking is used for a lot of
different purposes, but the biggest one is understanding the return on
your media investment," Campbell says. "Are you getting
awareness, and what's the source of that awareness? Is it coming from a
company's TV spend or is it coming from their print spend?"
set thresholds," she continues. "They'll say we want to keep a
fair amount of our money spent in TV until the awareness hits a
particular level, and when it hits that level they can back off, moving
from print to off-prime or from network to cable or print."
outside of the cost, Campbell argues that most ad tracking can be done
just as well as through phone polling and mall intercepts as it can
online. And when it comes to testing ads prior to their launch, the only
area where online is gaining is in print campaigns. "I would say
our print business is now 70% offline, 30% online" Campbell says,
adding that in areas such as TV copy testing, the market is still
dominated by either mall surveys or focus groups.
them seem like vestige from a bygone era, focus groups continue to be
the dominant methodology for qualitative research. According to John
Houlahan, founder and president of Stamford, Conn.-based FocusVision,
there were 225,000 U.S. focus groups and an additional 250,000 that were
done overseas. Almost all of them were conducted the old-fashioned way:
gathering people in a room and having a moderator lead them through
questions and answers dealing with everything from the latest ad for
toothpaste to the newest packaged snack foods.
recent years, there have been some attempts at introducing virtual focus
groups, where people in different locations are gathered online and led
through a product of ad evaluation. but Round says, "A lot of the
things you're trying to do in a focus group -- getting feelings and
emotions our of people -- you can't do in a medium like online. So much
of this is face-to-face and letting clients see the whites of people's
the Internet is having an impact on focus groups, and that's through the
use of streaming video, which eliminates the need for advertising
executives and their client to go to a remote location to see the ads or
products being discussed in person. Currently, the market for video
streaming is dominated by ActiveGroup and FocusVision, who between them
have equipment in about a third of the 700 focus group facilities in the
streaming] means that ad execs don't have to travel out, so companies
don't have the wear and tear on their personnel," notes David
Nelems, president and co-founder of Atlanta-based ActiveGroup. "But
the bottom line is that it just helps them get to the marketplace faster
with their decisions. you can have your whole ad team as well as your
client watch, and then you can do a debrief on the chat or you can do a
debrief on the teleconference afterward."
adds that video streaming also helps even before the form ad word
begins. "What we've seen more of lately is when agencies are
pitching an account, they'll do some creative work and focus groups on
the forefront," he says. "So when they do their presentations
they're able to say, 'Look, we've done this work and we already know
what your customers are thinking.'"
video streaming and archiving, they can now integrate clips from the
focus group directly into their presentation. "So they can say,
'Rather than me telling you what to think of the ads why don't we hear
what your average customer says?'" Nelems says.
rise of the Internet in market research does have its critics who, while
conceding that it has its place, worry that today's marketers have
become too infatuated with the low cost and seeming ease of online
think that we'll see that online will take its place as a prominent
method of collecting consumer information, but its relevancy will be
relegated to a certain type of research," says Patrick Galloway of
San Antonio, Tex.-based Galloway Research.
think there are some questions regarding Internet interviewing that
media buyers should always raise," he continues. "First of all
they should question the sample frame, i.e., where is the sample coming
from and what is the incidence of non-response. There are also issues of
security. It's easy to find out who you are and why you're doing
borrow a term from the industry, there's no doubt that market research
is "trending" toward online. "A lot of companies are
finding online simply the better way to do it, so we're winning more and
more of that business and there is a shift from mall or phone to online
methodologies," says Wiltse.
Campbell says that regardless of the methodology, ad agencies and media
buyers need to start viewing market research not as a roadblock or added
expenses, but as an oincreasingly necessary component of any advertising
program. While 95% of the time they are hired by the client rather than
the ad agency, Campbell says, "we far prefer a working relationship
with the agency. We're not in the business of killing advertising--we're
in the business of making that advertising better and more