Growing pains?

Editor’s note: David Day is president and global CEO of Lightspeed Research, London.

Since the late ’90s the market research landscape has been transforming. Like so many other industries, the rise of the Internet has had a massive impact on the industry. Client pressure for increased value from their research partners, falling levels of telephone response rates, rising costs of face-to-face interviewers, diminishing fixed-line telephone installations and do-not-call registries are all conspiring to drive research to the Internet and pre-opted-in research.

According to the latest estimates from ESOMAR, quantitative research methods account for 80 percent of global research spend, and 20 percent of research is now carried out online. In most developed markets it is substantially cheaper to use online data collection than face-to-face or telephone research. In the emerging markets, online is increasingly being used to research traditionally hard-to-reach consumers: the wealthy, the young and business decision makers. As economies grow and wages rise, researchers will turn to the Internet to understand the wants and needs of these emergent consumers.

So the growth in online research looks to be assured for some time yet. In turn, traditional data collection techniques will continue to decline. More call centers will close. More interviewers will join that great field force in the sky. However, not all is rosy in the house of online research. The one thing that we all know about the Internet is the way that people use it is constantly changing and changing fast. Where there was once (yes I said once, at least for Generation Y) e-mail there is SMS and social networks. Ask your kids how often they e-mail their friends rather than poke them or send them a text - a worry for an industry dependent on e-mail as its primary channel of communication.

And oh yes, there’s the mobile Internet. How do we get those huge grids to be visible on a screen two inches across? It wouldn’t be a problem if everyone used a PC to access the Internet but plenty of people today do not. In some emerging markets mobile phone penetration well outstrips fixed-line Internet access. Surfers’ expectations of the professionalism and user-friendliness of content on the Web is often well ahead of the usability of our surveys and quality of appearance. Researchers should always try doing their own surveys before they field them and ask themselves if they’d want to spend 25 minutes of their life doing that rather than some other fun thing on the Web.

And then of course there’s respondent quality. There has been a rising drumbeat across the industry over the issue of respondent quality. There is no doubt that without careful processes in place during recruitment and fielding of surveys, there are risks that bad or even fraudulent responders can get into a sample. The truth is that now most reputable panel companies put a lot of energy into reducing the risk of poor-quality results and we’ll talk more about this below.

No stranger to consolidation

The online panel business is no stranger to consolidation. In the main it has been driven by two factors: a quick way to achieve new market entry and business expansion and, secondly, the need to drive down costs to remain competitive in a market where a lot of buyers choose purely on cost. The recent high-profile mergers and acquisitions in the panel industry are unlikely to be the last. Scale is all-important in such a price-sensitive environment.

Prices will not continue to drop forever. As online becomes a more prominent part of the market research universe, the demand for quality online sample becomes stronger. There is a continuum of prices out there but there is also a continuum of quality. In addition to the true panel companies, there are rivers, aggregators and e-mail lists. Buyers should ask, “Who can provide the appropriate level of quality I need for this study?” as well as, “Who provides the cheapest price?” as there is a relationship between the two. All come with different price points and different levels of quality.

It is also important to realize that when mergers of online research providers take place there is a lot of work to do to integrate the panels from each company. Correspondingly there are questions that clients should ask if information is not being volunteered. For example, there may be a degree of duplication between the panels in a given market. This is typically a problem where usage of online is high and the online population is low. Overlaps of 10-20 percent are not unheard of so it is important that there are processes in place to de-duplicate the panels.

E-mail address is often used but is not a fail-safe method. Some form of unique machine identification is better. It is always important to remember that panel companies recruit and incentivize their panels in different ways and this may have some impact on how the panels respond. This is particularly important for continuous studies or those using norms so clients should ask their provider what steps they have taken to identify such differences and provide some mitigation. Finally, it is important that the past behavior of both panels is retained when they are merged. This is because many clients want to control exposure to a particular study, category or even type of survey. If this data is lost, the ability to control for these exposures goes with it.

Industry-wide standards

In July this year, Kantar and GfK announced the formation of Promedius, a new alliance devoted to improving online data quality. Promedius is a not-for-profit endeavor that aims to develop industry-wide standards and tools for online research. The foundation of Promedius is a direct response to calls from research leaders in many of the largest client companies. Promedius hopes to be an inclusive organization, one which will have a governance structure reflective of its membership and that will be drawn from both full-service market research companies and online panel companies. Its staff will be employees of Promedius and not affiliated with any single organization.

Q-Point, the Promedius quality solution, includes tools that validate the physical address of online respondents, identify respondent uniqueness and overlap across sample sources, as well as capture category participation using a common standard. The new service also includes a tool to prevent duplicates in studies and provides automated online reports of widely used industry metrics both for end-user clients, researchers and online panel suppliers.

Promedius will also license the intellectual property at no cost to online panel companies that wish to run the solution solely across their own internal panels. From my perspective, this is key. Industry standards need to be transparent and accessible. Promedius also plans to conduct a program of research-on-research to be freely available to the industry and to support both education and the development of the service.

Do access panels have a future?

One question I was asked recently at a conference was, “Do online access panels have a future?” It’s a sensible question.

Despite the rapid consumer adoption of the Internet, it is already becoming harder to not only recruit for but to maintain quality panels. Consumers have a vast number of activities to do online and keeping them engaged on a research panel is becoming more challenging. As noted above, respondents don’t want to be bombarded with irrelevant, boring and/or badly-written surveys - and believe me there are plenty of them out there! With so much more to occupy them when they are online, research companies don’t have long to retain the interest of respondents. I hate to use the term “surveytainment” but you have to look at the world of research in the context of all the other things battling for a respondent’s time and attention.

One very basic element of ensuring quality is to minimize respondent disturbance by sending them only surveys that are relevant to their lifestyle, life stage and interests. Accurately-targeted surveys mean reduced fieldwork times, better responses and, ultimately, cost savings. The best online panel providers employ a continuous panelist screening and profiling program that gives them not only important demographic information but details on key market sectors such as media and entertainment, health and wellness, financial services and automotive, to name a few.

So part of the answer to the question of the future of access panels is, “It depends.” If the industry does not wake up to the fact that respondents are not just a commodity with plenty more wherever they came from, there is going to be a problem with sustainability - at least at the CPI (cost per interview) rates typical today. This is why we need more partnerships between online suppliers, researchers and clients, working together to optimize survey design and enhance the survey experience.

Today in the developed world, online is a major advertising channel (bigger than TV in the U.K.) and many consumers make some of their biggest purchase decisions either online directly or use it to research the products or services they want to buy. Many of us bank online, do our grocery shopping online and find love online. If we want to understand today’s consumer, in many cases it has to be online where we do that research. People are quite comfortable with uploading photos and videos, with chatting online with friends or even complete strangers in social networking. Brands and research companies are utilizing this trend more and more to understand the market and how consumers interact with brands.

In the permission-based world we live in, it will be ever more important to have the agreement of our research subjects secured before we try to understand them. I also believe that we will see more linkages between panels in the future. Understanding the impact of an online ad or viral marketing on in-store sales or the incremental reach that a cross-media advertising campaign delivers are examples of where linking existing panel capabilities will deliver more sophisticated insight.