Editor’s note: For his annual contribution to our international research issue, our West Coast ad rep/roving reporter Lane Weiss traveled to Denmark, Germany, and the Netherlands to interview principals of research firms in those countries. In Denmark he spoke with Erik Liljeberg, director of Vilstrup Research, Copenhagen. In Germany he talked to John Attfield, managing director, RMM Marketing Research, Hamburg. And in the Netherlands he interviewed Fred Bronner, general manager of Veldkamp, an Amsterdam research firm. He also visited Berlin to attend a conference on new product research in the 21st century, organized by AEMRI, the Association of European Market Research Institutes.
Quirk’s: How is marketing research viewed by the public in your country?
Erik Liljeberg: Generally the view is positive but not as positive as it has been. The Danish research industry is doing some work to find out what to do in order to improve the perception of the population.
Our response rates are higher than in the States but they are declining. But the majority of the population of Denmark is still interested in taking part in marketing research.
The awareness is high. We are small country with approximately four million adults and Danish market research companies do approximately one-and-a-half million interviews per year so about one-third of the population is interviewed each year.
Fred Bronner: A negative factor in the Netherlands is confusion between marketing and marketing research. But we did research about participating in research and we found about 10 percent will always participate, 10 percent will never participate, and 80 percent say it depends on the subject, the time of day they are approached, etc. We have a “your opinion counts” advertising program on radio and television with about 20 research agencies that communicates the importance of participating in research.
John Attfield: I don’t think it has a particularly positive image in Germany. It’s not so negative that you can’t work here. I don’t think that refusal rates are exceptionally high here compared to other European markets. But I think there is a lot of skepticism, due to a variety of factors. In Germany one big factor is the whole question of privacy and data protection because there are very, very big concerns in Germany about Big Brother and the authorities. There is always a high refusal rate to disclose things like household income. There are concerns about, am I being watched, am I being filmed, those kinds of things. So there are definitely issues in terms of public perception.
Quirk’s: What research methods are most commonly used in your country?
Liljeberg: In Denmark the vast majority of interviews are made by telephone. Telephone has taken over the position of face-to-face interviews. We only use face-to-face interviewing when the research demands it. Postal interviews are used but not to a very high degree, which has to do with the size of the country. We have a rather small, densely populated country compared to our neighbors in Sweden, where they are much more used to postal interviewing because of the distances.
Bronner: In the Netherlands, at the moment, face-to-face interviewing is very difficult because we have to pay more taxes for interviewers than we did some years ago, and it is difficult to get interviewers because the job market is doing well, so in the whole of the Dutch research market - the 35 largest agencies - face-to-face interviewing is now about 10 percent. We see a decreasing importance of face-to-face and a growing importance of Internet panels and Web interviewing.
Attfield: In Germany the most common is probably the telephone interview, whether CATI or on paper. There are a lot of CATI studios in Germany. There’s a lot of studio work, studio tests, focus groups. Street interviewing is not so common because of the difficulties of conducting street interviews. You have to have a license from the local authorities to intercept and invite respondents into a hall. So there are some cities where there are a lot of test studios because it’s easier to get permission there from local authorities.
Quirk’s: Is Internet research becoming more popular and more feasible in your country?
Liljeberg: Yes. We have, as do the other Scandinavian countries, a very high Internet access - two-thirds of the population has access to the Internet either at work or at home. So we have high coverage, which makes it feasible to do interviewing using the Internet. It is growing rapidly. We still don’t have population-representative studies done via the Internet because we still miss one-third of the population and we still haven’t found the weighting methods to compensate for that. But it is coming and growing rapidly.
Bronner: We use a kind of hybrid, mixed-mode method because not everyone in Holland has access to the Internet - about 65 to 70 percent of the population has access. So in a sample you can approach 60-70 percent via Internet and 30 percent you have to do by telephone or other method. Ten years ago we would use only one method of research, face-to-face, telephone, etc. But at the moment we mix modes. We approach clients and give them a choice of e-mail, paper, Internet, etc.
We acquire respondents for the Internet panel by interviewing people in their homes and asking if they have a PC and access to the Internet and we ask them to join the panel. I think that is an advantage because some agencies in the Netherlands acquire panelists via the Internet, which gets the Internet enthusiasts in your sample. By acquiring them by classical means, you get a better sample.
Attfield: Internet is certainly becoming more feasible in Germany and it certainly is becoming more trendy. I think that will only increase because despite all the problems with e-commerce as a whole it’s not so difficult to conduct research online. So there are a lot companies that offer panels or various online research methods. Internet penetration is becoming high enough in Germany to make online research viable.
Quirk’s: What are some of the ways you see the Internet affecting market research?
Liljeberg: It affects it in the sense that it can be one of the tools that we have to improve the position of marketing research in the population because it makes it easier to tell the respondents, you don’t have to do the interview now, you can do it when you feel like it, when you are prepared to do it. So it is less intrusive.
Bronner: It makes data collection easier but the danger is, people don’t look at the quality of the sample. They just collect by pop-up screens a lot of interviews and nobody knows what the sample is. I compare it always to the situation in the U.S. in the 1930s. There was a famous example of a publication that, from a sample of two million respondents, predicted that [Alf] Landon would be president. And Gallup, with a sample of 400 people predicted that [Franklin] Roosevelt would be president. So that was the first time that everybody realized that it was not the size of the sample it was the quality of the sample.
We laughed at that story when we heard it from teachers in school but we are in the same situation again. People are selling huge Internet samples but nobody knows the quality of the sample. So we say, you can use the Internet, but you have to acquire and build your sample carefully.
Attfield: It’s a young methodology, so people are making all the mistakes that you see with any new method. I think in the end it will simply become another tool.
Quirk’s: What are some of the problems facing marketing research in your country and around the globe?
Liljeberg: As a representative of the Danish research industry, we see some problems with the newcomers to the market. It is very easy to enter the industry. You just have a computer and a telephone line and you are in business. But these firms are not always very good at what they are doing so they affect the industry negatively. The way we can improve it is to introduce better quality assurance systems, which we are working on on a European basis with EFAMRO [the European Federation of Associations of Market Research Organisations]. Last year we introduced the EMRQS, the European Market Research Quality Standards, which are now in place in many countries. CASRO (the Council of American Survey Research Organizations) is interested in that as well so they may become global standards.
Bronner: The main threat is non-response, followed by privacy legislation, research by non-specialist agencies, the difficulty of getting interviewers in the current labor market, confusion between telemarketing and research, competition from universities, and lower prices from suppliers in other countries.
Attfield: I think it’s some of the things we have discussed already: the problems of public perception, the pressures that always come from clients to make questionnaires longer, to try to find different ways of getting more private information, which people are unwilling to disclose.
Quirk’s: Are there privacy laws in your country that make it difficult to conduct legitimate marketing research? Does telemarketing have a damaging effect on legitimate research?
Liljeberg: Researching under the guise of sales does occur but not too much. We do have privacy laws in Denmark, as in almost all European countries, based on a directive from the European Union, which all member countries have to put in their national laws. So there is a data privacy law which says that we have to contact the data registrar to do the research, especially if the research is about sensitive areas like race, religion, sexual attitudes, diseases, etc. We have a clear distinction between telemarketing and marketing research in the law. We feel that Danish legislation is quite favorable to our industry as compared to other European countries.
Bronner: We have not faced severe regulations but there will come European rules. For example in Germany there is the rule that you cannot do cold-calling, without an introduction, to participate in research. First you have their information and then you can phone them. So if there is a European rule based on the German rule, there will be a problem. Then you have to turn to panels, because people have to give their approval to participate in the research.
Attfield: The issue in Germany hasn’t been telemarketing so much as privacy in general. In England there is much more concern about telemarketing. There you have to give people the assurance that you won’t try to sell them anything. In Germany you have to assure them their data will be kept anonymous. The ADM, the main professional research association here, spends a lot of time negotiating with the government to try to establish the difference between research and telemarketing and so far it has been successful, so there are fewer restrictions on research than on telemarketing.
Quirk’s: How has the consolidation in the market research industry, both in the U.S. and around the world, affected the industry? Is consolidation helpful or harmful?
Liljeberg: The consolidation has affected the industry simply by reducing the number of suppliers. But it has made it easier and better to market good, branded research products so I think it is helpful.
Bronner: At the moment, a lot of multinational research companies have acquired companies in the Netherlands, so some years ago everybody was a Dutch agency, but at the moment the main agencies have been bought by multinationals and you get more uniform products. So it is an advantage because you can do research in a number of countries using the same approach and compare the results. But the freedom is less because you have all kinds of standard products.
Attfield: I think that if companies need to invest in new techniques, such as online techniques or techniques that are expensive to introduce, then they have to have some new capital to do that. The main way that has been happening is that larger companies have been taking over smaller companies, hopefully to invest in them so they can make positive developments in the future. In that sense I think it is helpful. The negative side is that it reduces the variety that exists.
Quirk’s: Do your clients have reasonable expectations about what they can do with or learn from marketing research? Do they make effective use of the information they obtain from research?
Liljeberg: In some cases yes, in others, no! I don’t think the picture is very clear. Some of our clients know what they are buying and use what they are buying. Some just buy field and tab and do all the interpretation and analysis themselves, in other cases we do it for them and discuss the results afterwards. But other of our clients buy it out of habit and do not exploit the material as fully as they might.
Bronner: I am very optimistic about the future of market research because all our clients will be flooded with data because they have data from research, client databases, they have data, data, data! And market researchers can serve as a kind of rescue brigade to help them analyze the data.
Attfield: We are mainly a fieldwork provider but clients do tend to have an expectation to squeeze more out of the questionnaire than is realistic in terms of questionnaire length. But apart from that, I have usually encountered a reasonably good understanding of the strengths and weaknesses of the different techniques.
Quirk’s: What things could marketing research companies be doing to help their clients make more effective use of marketing research data?
Liljeberg: We think there is a need to build up better skills and a better image in the field of marketing research. The traditional view of the research industry is that they deliver their data and perhaps a report but they do not help the company enough to use the data in their organization. So what we need and what we work hard on in our company is to raise our skills in being good consultants and giving clients advice.
Bronner: There is much more demand for benchmarks to carry out research in a comparable way. There is also another development in the Netherlands: there is a lot of combination of qualitative and quantitative research. They are not so separate as 10 years ago. People start with qualitative research and follow up with quantitative research and expect that it will fit together. Another development here is that we are growing from marketing researcher to information manager because we have to connect internal databases with marketing research.
Attfield: Because of our position, almost all of our work is with companies who are operating internationally. We do research in Germany for overseas companies and conduct research overseas for German companies so I think that something very important for us is to help clients understand national differences or differences in the character of international markets.
Quirk’s: Have you seen trends in the use of marketing research in your country? Are certain kinds of companies or industries doing more or less research or doing research for the first time?
Liljeberg: The picture is as it has always been. There are always new clients on the market. Other companies have always done research. Some companies may reduce their budgets but that is based on their own consolidation. When two or three or four client companies go through a merger, the number of clients goes down. We see a tendency toward more qualitative and less quantitative research.
Bronner: We see that marketing research is growing and we are talking to people in companies at a higher level than before. Previously we would talk only to the marketing research departments but now we are talking to management. We are doing a lot of segmentation work because there is the belief that there isn’t one uniform market but there are segments in the market and companies need to approach each one with different marketing instruments. We also see an enormous growth in advertising response research. For every medium - direct mail, television, print advertising, newspaper - there is a desire to measure response. And that is because of the accountability discussion that came in the mid-1990s. Companies were spending a lot of money for advertising but didn’t know what worked and what didn’t so that discussion stimulated advertising response research.
Attfield: From what we see, this tends to follow general trends of technical innovation. That means that you’ll have an upsurge in the demand for research among, for example, telecommunications companies after the liberalization, or an upsurge in demand for research from mobile phone firms. But then they will go into reverse and we will have a demand for research in traditional industries like food or clothing. It’s difficult to see a clear trend except that anything related to high-tech is in the long run becoming more important, especially because a lot of those companies are young companies that don’t know much about their markets.
Quirk’s: Are the research departments in the client companies growing or shrinking? Are client companies looking at research providers as consultants in information management?
Liljeberg: We have the field and tab, data-gathering suppliers and we have the consultants providing the added value to the figures. But the old days of research companies just doing data collection and traditional reporting doesn’t work any more. You can do just the data collection, but if you do much more than that then you have to do much more, including the consultancy.
Attfield: I don’t think the research departments in client companies are shrinking. I think that they do remain important, though you do hear of cutbacks. I think you encounter so many different attitudes toward marketing research from clients that I couldn’t generalize.
Quirk’s: How has globalization of the world economy affected marketing research? Do you think more companies will rely on a global marketing approach or will they tailor their marketing efforts, and by extension their marketing research efforts, to each country?
Liljeberg: It’s true that the world economy is undergoing a globalization. But still there are so many cultural differences between the different parts of the world that we haven’t come to a true global marketing approach. On the other hand, the fit to each country is too small. Many European companies and especially U.S. and Japanese companies don’t know Denmark, they don’t know Sweden, they don’t know Norway. They may know Scandinavia - they have a regional approach in what they are doing and their local organization is Nordic-based - but they have a regional approach. So we as research suppliers to make sure that, though we are Danish and to that extent we are local, we have a very good network in Scandinavia in order to meet the needs of the big international companies.
Bronner: The multinationals in marketing research are growing and a lot of companies will do research in many countries. The globalization affects market research because more uniform procedures are used. So this is an advantage for the client because he can compare results across all the countries. But it has required researchers to do things the same way that researchers in other countries do them, so perhaps it has limited them to a certain extent.
Attfield: There are very, very few global brands where you can do the same thing in every market. In terms of Germany I think there are relatively few companies that conduct global research. Germany is still relatively parochial. What we see is a large amount of global research conducted from the States or from England and my sense is that that will continue to grow.