Online Research in the U.S.: What's Taking So Long?

This just in: according to a new study (by Cambiar), the value of the U.S. online research market will grow from $1.2 Billion in 2003 to $4 billion by 2008, largely by introducing a large number of smaller users. Online usage is firmly established among larger corporations with 28% of their budgets devoted to online research. For smaller companies, those using online also devote 28% of their budget to it, but overall penetration of online techniques is lower. 51% of non-users surveyed saying they definitely or probably will start using this medium in the next three years. Hence the opportunity to grow the category lies in penetrating larger numbers of smaller companies.

No doubt this is an opportunity, but there is still plenty of room to grow among those larger companies. Twenty-eight percent is a shockingly low number, particularly when one considers how many advantages online represents over traditional methods. Data gathering by phone, mail, fax or intercept all have significant disadvantages in sampling and setting, not to mention cost and timing. What are the big companies waiting for?

This is where the real opportunity lies for the industry. Our experience is that the industry has been incredibly slow to embrace the Internet, slower than consumers, in fact. Issues of response rates and quality of sample are still the most widely mentioned causes for concern when considering online research.

It's different in the rest of the world. A parallel study among 50 research companies worldwide, representing c.$1.2bn in research revenue, and found commitment to heavy investment in online over the next three years: 55% intend to increase their scripting resources, 77% to invest in panel expansion and 55% to build new panels. 78% ‘already conduct online research and have invested heavily in order to compete in this market’ and 59% are able to manage entire studies using their own resources.

The U.S. needs to catch up with consumers and with the rest of the world and start thinking of online as THE way to do research, not just the NEW way to do research.

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The Case for Online Focus Groups

In his new book, Blink, Malcolm Gladwell threw down the gauntlet on decades of market research tradition with the assertion that focus groups should be banned. As intended, Gladwell’s challenge provoked controversy. A Reveries.com survey put the question to marketers: “Should focus groups be banned?” 500 marketers responded, the most the site has experienced; nearly two-thirds said “NO!” Only 10% agreed with Gladwell.

Based on the written comments, it is tempting to conclude focus groups are a research technique marketers love to hate. While we aren’t quite ready to ban them, ‘dislikes’ outnumbered ‘likes’ by a wide margin and the ‘dislikes’ were strongly negative.

Focus groups are described as ‘unscientific’, the results are considered untrustworthy, and even misleading due to manipulation by less than honest or domineering respondents, bad moderators, and agenda-driven clients. Small sample sizes, social desirability pressures, and sterile settings are all cited as reasons for questioning the validity of focus group findings. They are described as artificial settings where respondents say what they think moderators want to hear, where moderators say what they think clients want to hear and clients hear only what they want to hear. Add to that the inconvenience of travel to distant cities, bad food, and too many M&M’s, and one has to ask, ‘Who would use such a technique?”

Plenty of companies. There are over 400 focus group facilities and 131 professional moderators listed in the U.S. (the actual number is probably much higher). Focus groups are fast and easy to execute. The flexible format makes them ideal for exploratory work on a wide variety of issues from product design to positioning.
While no one is ready to throw out the M&M’s with the candy dish, it is time to look at what can be done to restore rigor and credibility to focus groups. Some steps are obvious – stop overuse, improve moderator training, and increase objectivity. Here’s a less obvious solution: move focus groups online.

At 75% of US adults, the online population is arguably more representative than the telephone population (or at least the population that will answer). That insight is prompting a revolution in survey techniques. According to Inside Research, in 2004, 24% of all U.S. research revenue came from online studies. While to date, most of that revenue is likely from surveys, there is also a growing movement toward using online technology for qualitative research as well. As one of the first companies to embrace online qualitative research, our experience is that they are more better recruited and less susceptible to domination by individual clients or respondents. Here’s why:

Setting: Less artificial as respondents are in their own home, office or library rather than a sterile focus group facility. Observing from any Internet enabled location increases client participation.

Sample: Geographically dispersed and conform to more precise recruiting specifications. Even hard to find populations can be identified and recruited. There are fewer ‘professional’ respondents since recruiting is not limited to those living near a facility.

Results: Loud-mouths have a harder time dominating in a forum where everyone speaks at the same time and at the same volume. Anonymity reduces social pressure.

“Hybrid’ designs’ where qualitative and quantitative techniques are ‘blended’ reduce overall costs by sharing the burden of recruiting across two studies. For example, in a recent study a survey was used to identify cross channel shopping habits major retailers. Focus group respondents were selected based on their survey responses. The resulting samples were unusually homogeneous, allowing nuances in behavior and attitudes to be identified. A similar was used by Whirlpool to study proposed designs for a long purchase cycle durable good. Two geographically dispersed groups meeting exacting specifications were recruited and sent prototypes of a new gas cook top knob. Interviews showed respondents to be very enthusiastic to the knob, but not to the overall design of the range.

Beyond addressing the shortcomings of traditional groups, online groups offer some unique advantages. Interactive collaborative tools -- such as trips to the web, projective techniques, elimination games and whiteboard exercises -- make the experience fun and involving. Consequently, a one hour group often yields as much content as two ‘in-person’ hours.

It’s time to put the focus back into groups. Online technology promises to be one way to do it.