Editor’s note: George Terhanian is group chief strategy and products officer in the New York office of research company Toluna.
The rise of the 15-year-old online market research industry has been impressive. After many years of double-digit growth, it’s a $5 billion enterprise. Yet market researchers face major challenges. The flesh-and-blood factory model they still employ is unwieldy and expensive. Competition is increasing. Margins are slim. Growth has slowed and leapfrog innovation no longer seems to take place within the industry. It’s time to look outside the industry for ideas on how to move forward.
There’s no need to look far. Their counterparts in digital marketing have experienced even-more-impressive growth during the same 15-year period. Recent estimates suggest that it is a $120 billion industry today, 25 times larger than the online market research industry. By examining what digital marketers have done, and thinking deeply about what they might do next, market researchers can forge a better future for themselves and their clients.
Online marketers and online market researchers began their journey into the digital world at the same time and often worked hand-in-hand. In the late 1990s, for instance, digital marketing company MatchLogic began recruiting online users to participate in sweepstakes. The sweepstakes registration form included an opt-in to participate in Harris Interactive’s online surveys. Both organizations used the information to send targeted e-mails – Harris for research, MatchLogic for marketing. MatchLogic also stored the registration information within digital cookies to “help online advertisers deliver the right ad, to the right person, with the right offer, at the right time … and know within seconds if that ad was successful.” (source) When a registered user showed up on a site that MatchLogic managed (including the various Excite@Home properties), MatchLogic would recognize the user and serve tailored ads. Like others in this space, MatchLogic also relied on cookies to deliver ads to non-registered users.
Today, online market research companies continue to depend on e-mail invitations to select survey respondents. However, some now rely far less on profiling. Rather than going deep to learn as much as possible about individual panelists whom they retain, they elect to go wide, and shallow, in order to scale – that is, to gain access to more respondents for shorter periods of time. Such companies view respondents as blank canvases, coloring them in with the information they receive during interviews. That’s one reason response rates to online surveys have decreased over time: Few people enjoy answering the same initial questions again and again.
Meanwhile, digital marketers continue to depend primarily on information stored in cookies to decide which ads to serve and to whom. The language they use today to describe their overall vision differs little from the language they used back then. Emily Steel of the Financial Times noted recently, for example, that the goal of digital marketers is “to show the right advertising message to the right person at the right time – no matter whether a person is surfing social media, watching television, checking their mobile phone or walking into a store.” (source; registration required) That sounds a lot like the MatchLogic vision.
Digital marketers continue to innovate and invest. Steel indicated that they “are racing to build the next generation of automated advertising systems.” These systems replace roles traditionally filled by people and make it easy to purchase ads at a moment’s notice. Steel observed, as well, that marketers are placing “a huge emphasis on building more robust profiles about consumers.”
The big brands appear to be all-in. Companies such as Apple, Microsoft and Google rely heavily on log-in information to track users across Web sites and devices. This gets around a major limitation of cookies: their poor performance on mobile devices and tablet computers. If effective, log-in tactics will shift the balance of power from third-party ad-serving companies to major hardware and software providers Apple, Microsoft and Google.
Other digital marketing companies are encroaching on the space once reserved for market research. For instance, Qriously, a self-described “real-time opinion start-up,” offers a service called Opinion Targeting. Through the firm’s mobile advertising technology, it poses questions to smartphone users and the users’ responses determine the ads those users will see. Interested in purchasing a new vacuum cleaner? If you say yes, you may soon see ads for vacuum cleaners. Planning to vote for the Democrats in the next election? If so, expect to receive ads, and perhaps even a call, from the Republicans.
What does all of this mean for market researchers? First, they need to shelve the blank canvas approach, which is becoming obsolete. It is better to invest in deeper, wider profiling. In principle, they can collect and store information from multiple sources and then use that information (e.g., social media posts, Web sites visited) as a basis – to borrow a concept from digital marketers – for inviting “the right people to the right surveys on the right devices at the right times.” They can also augment survey data with information from panelist profiles.
Second, they need to think about how technology can automate the flesh-and-blood assembly line, whereby one group of workers is responsible for sourcing respondents, a second selects samples, a third handles survey programming and so on. That’s a model for the past, not the future. They might even go farther, creating automated reporting and analysis modules. There is no reason, for instance, why standardized methodologies, such as copy testing and brand tracking, cannot be automated.
Finally, they should work closely with industry associations to reevaluate the line in the sand that has long distinguished marketing from marketing research. It may be time to loosen the codes of conduct that stipulate that “no action can be taken toward an individual respondent simply because of his or her participation in the survey.” (source)
Such a code prevented MatchLogic and Harris from sharing information beyond that provided at registration. But market researchers may no longer be able to afford such codes. The advantage conferred on companies that are willing to enable advertisers to send specific offers to individuals based on their responses to survey questions may be too great for other firms to pass up – and the penalty for holding back may be steep.
Having earned many years of strong growth online through innovation, investment and hard work, market researchers are positioned well to take these steps. And that’s good, because the time to take them is approaching fast.