Announcing New Study: Millennial Trendsetters, Food & Wine

Brand Amplitude is partnering with Outlaw Consulting, a leading domestic Gen Y trendsetter research group, to study the habits and preferences of Millennial Trendsetters when it comes to what they consume, where they consume it and why.

Today’s young adults grew up in an era of unsurpassed affluence and unprecedented parental attention. They were exposed to education, dining and travel experiences earlier than previous generations and have grown up with purchasing power that exceeds that of adults of past generations. As a result, Millennials – roughly defined as young consumers age 18-30 – are more sophisticated than previous generations in their appreciation for food, beer, spirits and wine. They are already exerting a disproportionate influence on casual restaurants, wine, and beer marketing, an influence that will continue to grow as they age and increase their income.

One of our Millennial researchers, Marty Predd of Portland, OR and his girlfriend, Sarah, are good examples of food involved Millennials. While doing taxes they "discovered a shocking amount of money was spent on dining in and out for just the two of us last year." In March, they travelled to Ireland. They record their meals in area restaurants in a blog, knowourvelocity.com and regularly post reviews on yelp.com.

For Millennials, being on trend is an attitude and way of approaching their lives. They are hungry for newness, and want to know what is emerging and coming next. Because of this mindset they don't get stuck being literal and instead thrive on new ideas and can envision how or why something not yet a part of their world might fit in. Here's how Marty describes his desire to stay on trend:

Whether we're eating out or I'm cooking, the underlying motivation is almost always avoiding boredom...hate doing the same things again and again. I think there's a related tendency to want to avoid things (brands, idea, anything) that seems too mainstream. SEEMS being the key word. We've actually shifted our grocery shopping away from Whole Foods for that very reason, in part. All the excitement over 'natural' and 'organic' foods was new and exciting at first, but after awhile it seemed a little too..typical...like we were doing it just because it was the thing to do. Why do I want organic chicken again? What does that even mean? Why do two small chicken breasts cost me $15?

According to Mintel, Sarah and Marty are typical:

• Two out of three Millennials are "Cooking Enthusiasts" who make an average of 4.4 ‘elaborate’ or ‘gourmet’ meals every six months.

• Millennials’s spend a disproportionate amount of their income on food, food away from home and alcoholic beverages.

• Millennials are driving growth in the beer, wine and bourbon categories. They tend to prefer premium / imported brands.

• Millennials are trading up from fast food in their restaurant choices: 18-24 year olds were the only age group to show a decline in the average number of meals eaten at QSR’s between 2007 and 2008.

• 18-24 year olds are 17% more valuable than the average customer to the leading seven chains of casual restaurants.

With their absolute size and aggregate income expected soon to exceed that of Baby Boomers, it is critical to understand how Millennials think about their food, beer and spirits choices. But learning about Millennials, and especially trendsetters, can be tricky. They are unlikely to respond to traditional surveys, and their answers are likely to be superficial when they do. By definition, their tastes can change rapidly. Often the most useful way to learn about Millennials is to study the ‘trendsetters’ who tend to be highly networked ‘Connectors’ and thus more likely to lead social trends. Their behavior may not always reflect their values, because their values are ‘progressive’: they aspire to new definitions of family/home and work.

A Unique Approach to a Unique Group

This study will be unique both in its sample and method. For starters, we plan to tap Outlaw's proprietary panel of 200 Millennial trendsetters. All display a strong passion or expertise for one or more of the following: technology, fashion, pop-culture / music, alcoholic beverages/socializing, or emerging media. The study will use a Web 2.0 online journal and photo collage building tools to gather detailed consumer observations. Unlike conventional in-home ethnographic research, this approach allows us to interact with our target consumer group over an extended period of time without invading their privacy. We can request diaries, give assignments, ask questions and provide other forms of stimuli. We capture trendsetters’ experiences and emotions literally as they unfold through a user-friendly web interface.

Assignments will be designed to reveal overall interests, lifestyle and motivations as well custom exercises focused on categories of special interest to project sponsors. The study will be designed and run by two researchers who are themselves Millennials. Areas of special interest include:

• What motivates their interest in new tastes, flavors and experiences? What is emerging in terms of new tastes, flavors and experiences? What motivates these desires?

• Where do they learn about new food, restaurants, recipes, wine and distilled spirits products? What is the role of word of mouth, on premise consumption and off premise parties? Who do they look up to for recommendations?

• How important are characteristics such as ‘organic’, ‘locally grown’ and ‘hormone free’ in their food and wine choices? Everyone talks about it, but do they do more than make more than token gestures? What exactly what are they doing? What more would they like to be doing?

• How interested are they in travel shows, cooking shows, celebrity chefs and other food and wine media? Which ones are most influential and why?

• What are their different restaurant eating occasions? What drives or triggers a night out?

• What do they look for in a restaurant experience and how does that vary by occasion or who they are with? How important is the dining experience relative to the food? What would get them to eat out more often?

• Which brands do they love and why?

• How is the economic downturn influencing their overall spending and brand choices? Where are they cutting back and what are they holding ‘sacred’? If they had more money, how would they spend it?

For more information on how you can participate in the study, contact carol@brandamplitude.com or judy@brandamplitude.com

Resonance Scanning: How to Right Size Your Brand Portfolio

Brand Resonance Scanning, April 09

View more presentations from Carol Phillips.

Brand architecture is one of the least sexy topics in branding, but one of the most important. Having too many or too few brands can cause marketing inefficiencies, customer confusion and waste valuable retail or web space. Brand extensions are often too easy to implement - got a new feature, give it a name! Left unsupported, these orphan brands collect like kudzu.

Over the past few months we have been helping several companies 'right size' their portfolios. Usually this means culling underperformers, but on one occasion it also meant finding some overlooked jewels, opportunities for fighter brands and new subbrands.

Optimizing the brand portfolio should begin with an outside in look at your business. How does the customer view your offering? What stands out? What is invisible? How do they see the competition?

Brand resonance scanning is one way to get that critical customer perspective.

The Case for Tracking Research

Managing brand equity requires consistent metrics. Without a sense of where a brand has been, it's difficult to make good decisions about where to take it. Our first step when we have a new client is to audit their existing customer and brand information, often only to find sporadic and inconsistent brand measurement. The best analogy is a doctor's annual physical. would be for a doctor to make a diagnosis prescription without understanding trends in temperature, blood chemistry or blood pressure.

With the advent of online surveys, and high penetration of Internet in most households, tracking research does not have to be expensive. Here are some of the questions tracking research can help to answer:

1. How is my brand doing versus competition?

2. Where does my offering stand in relation to what the customer wants?

3. How are loyal customers defined? What behaviors need to be encouraged for the brand to become ‘healthier’?

4. What is the contribution of loyal customers to creating revenue and profits for my brand and for the category as a whole?

5. What elements of the marketing mix will make my brand stronger?

6. What are the leading indicators for problems with my brand?

7. How can I optimize my positioning and other strategic marketing decisions?

Our approach to brand tracking is highly customized for each client. But we are guided by best practices and a few overriding principles. To learn more about what we consider the 'essentials' of brand tracking, see our whitepaper, "Brand Vitals: Essential Principles for Monitoring Brand Health".

A Research Value: Customer Databases

Does your firm have email addresses for at least some of its customers? Customer databases can be a great way to learn more about why your customers like your brand. We have completed dozens of projects involving customers surveys, and have found them especially useful when paired with surveys of category users. Comparing profiles, perceptions and behavior of customers to that of prospects yields valuable insights for targeting, messaging and media strategies.

We've learned a lot about conducting customer research through these studies across categories as diverse as higher education, window film, home appliances, spirits, and fast food. Encouraging customers to participate requires extra thought and attention; response rates can be as low as 1% and as high as 12% depending on the invitation language and incentive offered (tee shirts and coupons work best!). Over and over, we've found the effort is worth the investment.

Here are a few examples:

The Michiana Family YMCA The YMCA had many years worth of member satisfaction data, but knew little about prospects. A market-wide survey revealed there are a lot of home exercisers who would consider a YMCA membership if they only knew more about it. Prospective members want information and assurance on affordable individual fitness programs, while members are more interested in family-oriented programs. We are working with the YMCA and its agency, Chicago-based Kauffycan, to craft messages specifically designed to bring in new members, while reaching members with more ideas about how to get the most from their membership.

Westlake Ace Hardware By comparing findings from its 'Ace Rewards' database with survey data on homeowners in its trading areas, Westlake is gaining insights about how proximity and brand perceptions about selection and service work together to influence visit frequency. This information will help direct media and merchandising strategy, as well as allocate marketing resources across markets.

Harlem Globetrotters Our work helped the Globetrotters and its agency, WONG DOODY of Seattle, to understand the differences between their core fans and more casual ticket purchasers. And there is a difference! The learning was applied to make 2009 an attendance record shattering year. In fact, they have been so successful, Sports Illustrated featured an article about their phenomenal success:



Harlem Globetrotters featured in 3.25.09 Sports Illustrated: "Still Crazy After All These Years"

In just the past year, we have also helped Carhartt, JC Penney, Admiral Nelson Rum, Whirlpool and more leverage their customer database for research. Is there a treasure lurking in your email database?

Do's & Don'ts of Stretching a Brand in a Down Market

Hooters Airlines. Harley cakes. And who can forget Maxim Haircolor?

Even in the best of times, the relationship between branding and innovation can be tricky. Generally speaking, they work together, with the brand strategy providing the ‘face’ of the business’s growth strategy. Brand strategy helps companies bring innovation to the market. Innovation returns the favor by enhancing brand reputation.

It sounds simple in theory, but in practice the partnership can be an uneasy one. The difficult choices imposed by hard times forces managers to confront the challenge of ‘brand stretch’ even more acutely. Balancing the need for brand focus with the need for innovation is the essence of the dilemma. Staying inside the confines of existing brand boundaries risks missing opportunities to meet emerging market needs. At the other extreme, stepping too far outside the brand’s comfort zone risks dilution of brand meaning -- the dreaded “everything-to-everyone syndrome”.

Every company aspires to a brand extension success, but at the same time they also fear the warning provided by brands that expanded too aggressively.

Among the many reasons for conflict between innovation and branding, two stand out:

• The goals of innovation and branding can be contradictory. Branding is about establishing trust through consistency; a brand is built by giving customers what they expect. Brands that change their messages too frequently, or extend too far into unrelated businesses risk confusing their customers and diluting their meaning. Innovation is about giving customers what they don’t expect. Innovation builds excitement and interest by delivering something new.

• Both innovation and branding demand resources. Unlike Apple and Virgin, most brands find it difficult to sustain a reputation for continuous innovation. Instead they build a brand by doing one or two things really well. For these brands a tension often exists between the desire to extend the brand beyond its expected horizons and maintaining brand focus. Innovation puts pressure on both branding budgets and brand architecture. Should the new brand be given a separate name, or sub-brand name? In our current economic climate, the answer to this question is likely to be “no”.

Finding and maintaining the right balance can be tough. It requires constant vigilance. As Lucas Conley pointed out in his book, “Obsessive Branding Disorder”, the branding path can be seductive. Innovation is difficult and doesn’t always line-up neatly with branding’s first commandment of ‘consistency’.

Our experience with firms that understand the need for balance, during good times as well as bad, is that they adhere to several best practices:

1. Don’t Take What Customers Say Too Literally. While carefully listening to the voice of the customer is key, it is even more important to reach into the mind of the customer, by looking for the motivations that underlie their behaviors and expressions. Good innovation decisions are unlikely to come from what consumers can articulate about their immediate rational needs. They are more likely to originate from their emotional desires or future needs. ‘Rear window syndrome’ can lead to preoccupation with solving today’s or even yesterday’s obvious problems and limits innovation to the incremental variety. When Apple introduced the iPod, Virgin launched Virgin Atlantic Airways and Amazon introduced the Kindle, these companies reached outside their existing brand competencies to address new markets and unfulfilled customer needs.

2. Don’t Be Overly Protective of the Brand: Fear of tarnishing brand reputation with customers, or employees and suppliers can suppress the desire to pursue ideas that promise to ‘stretch’ the brand. Most brands can stretch; the real question is whether it makes business sense, not whether stakeholders will accept it. ‘Brand stretch’ research can be misleading since customers are only able to answer questions based on what they already know. When marketers rely on customers to tell them whether a new offering can fit within their understanding of the brand, we again fail to see what is possible and limit ourselves to what is probable.

There are many examples of unlikely brand stretches that succeeded (at least from a market acceptance standpoint). BIC moved from pens to lighters to razors and Jeep from cars to strollers. We don’t know if Starbucks and Tide did ‘stretch’ research before moving their brands into new categories, or if they did what consumers thought of the ideas. If we had been working with them, we may have argued against the research, or at least against listening too closely to what consumers had to say about the ideas. Both companies no doubt already had ample evidence that the moves made business sense (licensing in the case of Starbucks, and superior product performance in the case of Tide-to-Go). Whether consumers would embrace the idea was probably a matter more of spending and awareness than brand ‘fit’.

3. Don’t Think of Brand Stretch as an All-or-Nothing Gamble: Sometimes we are reluctant to stretch the brand too far because we imagine a calamitous reaction from brand loyalists that permanently dilutes brand meaning, destroys our brand equity and erodes hard-earned market share. In fact, this risk can be managed through in-market experiments.

Best Buy’s expansion into musical instruments and music training provides a useful example. Recently, Best Buy announced it is opening six 2,500 square foot store-within-a-stores in South Florida. It is a stretch for Best Buy to deliver an artsy, high-touch service like music training, and they no doubt have research that suggests the market is unlikely to already believe that Best Buy can deliver high quality music instruction. Some of this is reality -- there is an internal capability gap that will need to be addressed. To Best Buy’s credit, though, they have decided to move forward. Whether or not this ‘innovation’ is ultimately successful will depend more on how much investment they make than any predetermined level of ‘brand fit’ or misfit. The key for Best Buy is that it is a relatively low risk experiment that will not broadly impact their national brand equity.

We have developed a simple grid for helping companies weigh the trade offs of stretching the brand or sticking to what the brand does best. To learn more, read our whitepaper, "Innovation and Branding in a Down Market". Note: This post was co-written with Brian Christian, Daso Innovation Consulting.

The Purpose of Branding

Peter Drucker famously said, "The purpose of business is to create and keep a customer". The same can be said of brands (because after all what are brands but the outward expression not the business strategy?)

Today I shopped at Aldi, my new favorite store for groceries. Like Wal-Mart Aldi's purpose is to save customers money, and the savings is remarkable - I got what would have been easily $120 worth of groceries for $70. Every thing about the store and the people in it reinforced my savings, from the quarter I deposited to rent a cart, to the $.06 I paid because I neglected to bring enough bags, to the necessity of paying in cash. Do I feel good about my experience? You bet. They made a customer today.

My associate, Amisha Sinha, brought a great article to my attention using Twitter. It is from Media Post, "The Re-Purposing of Marketing", by Roy Spence and Haley Rushing. Spence's book is "It's not what you Sell It's What you Stand For: Every extraordinary business is driven by a purpose." They point out that many brands are hanging up or 'going out of business', but ask 'how many of those brands will be missed'? How many made 'a real difference to anyone'?

As an industry, we're often too good for our own good. We can use the power of our creativity to take an ordinary, commodity product and make it seem extraordinary to a particular market - but not for long. As good as our creativity may be, it can't ultimately compensate for an unremarkable product or service. The customers will ultimately notice and move on; signaling a call to the agency to 'change the campaign - the old one is no longer working.'.

The purpose of marketing has to be higher than moving 'product through the pipeline'. Great brands aspire to a higher purpose and consequently inspire employees and other stakeholders to reach higher to serve their customers. It's not an accident that the most admired 'iconic' brands have nearly cult-like followings. These brands put serving cusotmer needs at the center of all they do. Their commitment to providing meaningful value to customers is tangible, not just talk. It allows them them to outperform competition in good economic times and bad.

Why is that? According to authors Spence and Rush:

"When you have a genuine purpose at the heart of an organization, it takes marketing to an entirely different level... you are actively collaborating with every facet of the organization to bring the purpose to life in the business model, product development, customer experiences, environmental practices, loyalty programs, employee training, social causes, any and every avenue for manifesting the purpose of the brand is "marketing.". Take Ikea -- the revolutionary furniture company that offers well-designed, functional home furnishing products at prices so low that many can afford them. Their purpose is to democratize modern design for all.

Fulfilling that purpose requires everyone at the company to think about how they can help fulfill that promise in the marketplace - revenue, R&D, operations, environmental design, training, IT - everyone in the organization thinks like a "marketer" and the official marketers have an abundance of genuine stories to tell to the world. Every ounce of creativity can now be used to make sure that the customers you are trying to serve know that you're the best brand in the world for fulfilling a legitimate need that they have.

Brands have sometimes been referred to a company's North Star. It links the corporate mission and values with the needs of the customer. That's why we are so convinced that brand strategy is bigger than marketing. As they say, it's just too important to leave to the marketers.

The Brand Bubble? Why Brands May Still Be Overvalued by Wall Street

So far, brands have not been called into question for their role in the stock market meltdown of 2008, but I suspect it won't be long. Who can look at the GM bankruptcy option and not see it, at least partly, as a failure of brand management? In my Brand Strategy MBA class last semester we discussed Al Reis' contention (GM=General Misery, Ad Age 2.2.08) that GM tried to support too many undifferentiated brands and ended up straining its resources and confusing its customers. With the recession now at full tilt, many companies are heeding the lesson and trimming underperforming brands.

Several articles in the Spring 2009 edition of the AMA's Marketing Research magazine (not yet online) provide further evidence that brand strategy is contributing to our economic woes. They link inflated stock market valuations to data on brand value and conclude that the stock market is overvaluing brands' contributions to company valuations relative to more tangible assets. Many companies have models designed to quantify the contribution of brand value to market capitalization, most notably Interbrand, Y&R, and CoreBrand. Each has consistently shown that while the relationship is generally small and varies by industry, it is nonetheless real. So real, in fact, that CoreBrand this month is launching an investment fund that based on its model, in conjunction with BelRay Investments.

In the article by John Gerzema, Chief insights officer at Y&R and author of 'The Brand Bubble: The Looming Crisis in Brand Value', there is a comprehensive look at all three brand valuation models using data in the U.S. as well as globally. Looking at all the data, he reaches the conclusion that the stock market has valued brands more highly than consumers do, leading to an acceleration of decay of brands. Here's a key passage:

"Emboldened by the tools of the new digital world, consumerism is drastically and profoundly changing, which is rapidly accelerating the decay of brnad. Fragmentation, social media and digital acceleration are causing a widespread attack on brand value. Consumers are quicker to punish uninteresting and undifferentiated brands. Today, brand equity is decaying in compressed periods of time. Brand equity is not the protective insulation it once was. After all, brand equity is only what a brand has achieved up until this point. What consumers are telling us is that past reputation seems to mean very little. Consumers are fatigued more quickly with brands that can't adapt and evolve. The clutter of the marketplace combined with the "old models" for brand management that strive to build awareness and reputation are actually backfiring in that they are slowing a brand's ability to keep pace with a consumer who is moving faster than their marketing strategies. And the emergence of a new digital consumer only amplifies the "d" problem: differentiation in a brand (or lack thereof)."

I've lived long enough in my career to know that the imminent death of brands has been forecast many times, but the concept of brand equity has proven more endurable than each subsequent challenge. There is always a place for brands since a brand is simply a contract between a company and its customers. That will never change. But I do agree with Gerzema that the pace of change among consumers may not be matched by changes in perceptions of the stock market investors. If true, that means the recovery may be longer than we thought, and that the skills involved in brand building in a digital world will be even more important.

Brand Architecture: The Link Between Business Strategy and Brand Strategy

Brand Architecture Toolkit Final2.25.09

View more presentations from Carol Phillips.

In our work with clients, it is rare to encounter a brand strategy issue that doesn't somehow involve an architecture issue. Architecture designates the relationship between different brands in the portfolio. A well-designed architecture has many benefits, the most important of which is including making your brand offerings clear to customers. From a marketing perspective, architecture helps optimize marketing by allowing some brands to build equity (driver brands) while others draw equity, riding in the slipstream of the driver (subbrands). Architecture also permits the development of 'brand distinguishers' that work across portfolio brands. These are sometimes called 'ingredient' brands or 'energizers'.

Developing a brand architecture that supports the business strategy and makes sense to consumers can be complicated. There are no easy research shortcuts. Exhaustive searching also shows that, like most issues in brand strategy, there isn't even a common language or terminology to facilitate the discussion.

We developed a set of tools and organized them into this presentation to help our clients understand the importance of brand architecture and how it can help their business. It also describes the process of optimizing the portfolio and naming brands. The key? Specifying the relationship of every TM'ed item to every other one and to the overall busines strategy. It's not easy, but well worth the effort.

Put the Focus Back Into Focus Groups

At the recent AAAA account planners' conference (AdAge, 8/8/05), Malcolm Gladwell (Blink, Tipping Point author) threw down the gauntlet on decades of market research tradition with the assertion focus groups should be banned. This is akin to saying email should be banned because much of it is poorly written. Mr. Gladwell’s view of focus groups as random groups of people asked to make decisions on marketing in an artificial setting bears little resemblance to the reality of qualitative research today. After conducting hundreds of groups in the past two years, our conclusion is that it’s not the technique that is flawed, but how it’s used.

Focus groups are fast and easy to execute. The flexible format makes them ideal for exploring strategic issues (who is my target?) to tactical decisions (is a red arrow more readable than a copy block?). Before the M&M’s get thrown out with the candy dish, we think it’s worth trying to putting the focus back into focus groups. Here are some suggestions for making qualitative research more meaningful and less prone to misleading errors.

When appropriate, conduct groups online. A series of groups comprised of people from all over the country is automatically more representative than groups conducted in Denver, Chicago and LA. Our experience is that online groups are also better recruited and less susceptible to manipulation 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: 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. We have successfully recruited owners of $2000 exercise machines, users of flavoried rum, even concession stand volunteers.

Control. Loud-mouths have a harder time dominating in a forum where everyone speaks at the same time and at the same volume. Less time is spent controlling and more on listening.

Validity. People are more likely to admit to habits or opinions that they think others would disapprove of in the anonymity of cyberspace than they would face-to-face.

Add a quantitative component. A screener is merely a quantitative survey in sheep’s clothing. It can be treated as part of the overall research design in order to put qualitative findings in a larger context. Such “hybrid’ designs’ 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 for a large retailer, 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.

Make focus groups more observational. Groups where the moderator asks a series of yes no questions is nothing more than small sample quantitative survey. Effort and creativity are required to encourage respondents to talk to each other so their natural responses can be observed. Interactive collaborative tools -- such as trips to the web, projective techniques, survivor-type elimination games and whiteboard exercises -- make the experience fun and involving, as well as reduce artificiality.

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.

Comments?

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.

Different Research Methods Yield Markedly Different Results

Seeing is believing is especially true in market research. Ball State researchers have just provided solid evidence that observation research is superior to telephone or diary based methods for measuring consumer behavior.

Observation methods of measuring media usage show consumers significantly underreport their daily minutes of time by medium when questioned using diaries or phone survey.

Daily Minutes of Time Attributed To Media Via Each Method

Phone Diary Observation

Home Computer* 21 52 64
Online 29 57 78
Television 121 278 319
Books 18 17 36
Magazines 8 10 14
Radio 74 132 129
Newspapers 15 26 17

Source: Ball State University, Center for Media Design.

Not surprisingly, the least discrepancies were for media with the greatest social desirability (books, magazines) and therefore the least incentive to misrepresent the actual time spent. The implications for researchers are clear: beware! Even relatively innocuous questions such as how many minutes a day do you watch television should be regarded with suspicion and whenever possible, backed up by observation research.

We have seen evidence of social desirability repeatedly in our research. A recent project involved asking adults who in the household was responsible for financial decision-making. Both men and women answer in the affirmative. Further questioning reveal that men are more likely to THINK they are the decision-maker, while women actually handle more of the day-to-day financial tasks and decisions.

Online Research Reveals Mysteries of ROI?

Why didn't we think of that? Media Post reported today (1.17.05) that BIGresearch simply ASKED 14,000 online consumers to tell them which media they find most influential for purchases across a variety of categories. Ask and you shall be told, apparently. "SIMM relies on real consumers to determine the value of each media for their purchasing decisions," said Dr. Joe Pilotta. "If consumers are not receptive to a media, blanket exposures cannot make it influential."

Pilotta claims most marketers have so far "relied upon abstract ROI and optimization models as surrogates for real consumers' media behavior." BIGresearch collaborated with renowned academics Don Schultz and Martin Block or Northwestern University's Medill School. Among other things, the system shows that "word of mouth" is more influential than advertising media for product categories such as electronics and home improvement products, while broadcast TV dominated a category like apparel products (see table below).

Media That Influencing Consumer Purchases

               Electronics   Apparel   Grocery   Home Improvement

Word Of Mouth         35.0%     26.1%     30.8%              26.4%

FSI                   26.4%     27.6%     40.2%              21.7%

Broadcast TV          23.6%     19.7%     22.9%              19.0%

Internet              19.0%     11.4%      8.9%               7.9%

Email                 16.7%     12.7%      8.7%               6.8%

Coupon                14.1%     16.7%     52.2%              11.2% 

Source: BIGresearch Simultaneous Media Survey. Derived from interviews with more than 14,000 consumers, measuring their consumption of 28 different media, which was aligned with their retail store shopping behavior, product consumption and media influence.

Carol Phillips 

Online panels are superior to telephone surveys. Those who are still doing surveys the old fashioned way are paying a high price, and not just in dollar terms. Telephone surveys have always been suspect from a representation perspective. Who really believed that they ever represented a 'random sample? Now with many respondents believing that do not call applies to polls as well as sales calls, 8% of the population completely disconnected from a landline, do not call lists now extending to cell phones, anyone who uses the phone for survey recruiting should beware.

That's not to say online panels are without their problems as well. I can speak from first hand experience that online panels are not all of equal quality. In general, I advise clients to stick withpanels that use email over Internet, have enough representation of young men and minorities to be useful and balance their samples mathematically to census figures. Beyond that some good indications of quality are response rates. Panels that are 'grabbing whoever they can and pelting them with questionnaires probably are going to have lower response rates. Another indicator is how respondents are compensated. You don't want professional respondents.

Finally ask whether the panel allow you to recruit qualitative research respondents from among survey respondents? This powerful technique is quickly becoming popular as a way to get extra insights about difficult to recruit for populations such as concept acceptors or super heavy users.
I am aware of just one panel that meets all of these criteria, BIGresearch. Unfortunately, their panel is not available for custom research unless you are already a subscriber to one of their syndicated panel products. If you decide to go with a self-serve panel such as those offered by Survey Savvy, Zoomerang, Harris or Greenfield, just be sure you know what you are getting. And (hint) be sure to check the back-end analytic software.

Carol

Closing of the Digital Divide

Years from now, 2004 will be seen as a watershed for the Internet. It will be known as the year that the demograhpic differences that defined the online world from the unconnected world literally vanished. Those of us who conduct market research online felt the change as it happened. In the old days of 2003, we recruited focus groups based on how long a respondent had been online, this no longer was important. Newbies and old hands responded the same. It seemed the internet population was more and more, like, well like us!

Now there is data to support this conclusion. According to Dr. Jeffrey Cole is Director of the USC Annenberg School Center for the Digital Future, the founder of the World Internet Project (reported first on iMedia) the differences between new and experienced Internet users have almost disappeared and Internet users look more like a subset of the US population as a whole.

In the past, the most experienced users connected over twice as long as the newcomers and were far more likely to be connected through a high-speed connection. Long-time users also connected from more places, both inside and outside the home. New users were much more likely to be looking at chat rooms, playing games and searching for entertainment information and searching for medical information. Experienced users spent much more time than novices buying online, doing work related to their jobs and looking at news online. Fours years ago the average new Internet users did not make an online purchase until they had been online between 18 and 24 months. Prospective shoppers four years ago also did not buy online because they feared the product would not be delivered or would be delivered damaged.

Sometime in late 2003 or early 2004 everything began to change. Now Although long-time users still connect longer, new users are only slightly more likely to be looking at chat rooms or playing games online, and they are Today, Internet users are no longer a subset of America as a wholejust about as likely to be looking at news, entertainment information or doing work related to their jobs. Today, new users buy online almost from the day they get connected. The 18- to 24-month lag period is gone. Both Internet users and non-users believe that prices are lower online and that the availability of products is greater.

The most likely cause four years ago for the vast differences in Internet use by experienced and new users was demographic differences. The earliest Internet users were much more likely to be white or Asian, highly educated, male and with higher incomes. They were also much more technologically inclined. Over the past four years, more and more of America has gone online, with the fastest growing groups being African-Americans and Latinos, females, lower income and those with less education. New users go online knowing what to expect from the Internet having, in many cases, been online before with a friend’s or relative’s connection. New users get down to business much faster than new users of several years ago, with less exploring and experimenting.

The implications - for polling, for research, for online commerce and more are enormous. But in the short-term, I am just happy to be able to answer the inevitable question, 'but is my audience online?'

Digital World Goes Mainstream

The Best Data Wins

According to a Nov. 5 Wall Street Journal article, “Polls Taken Just Before Voting Hit Target On US Pres”, “elections are one of the best chances to measure polling results against reality.” That is precisely the reason as a market research professional I closely followed the polling results. My conclusions are 1) that online polling beats telephone polling and 2) sample size matters – a lot.

The most accurate predictions were all from online polls. Telephones, and the people who answer them, do not reflect the population at large as well as the Internet population. Within the online world, the polls that got it right had the biggest sample sizes. Only one poll got it exactly right – BIGresearch of Columbus, OH. BIGresearch’s October survey tapped over 8000 online respondents, balanced 14 ways against the Census population. The data said 51% Bush, 46% Kerry and 3% Nader among likely voters who are decided, a close match to the final actual result of 51% Bush, 48% Kerry and 1% Nader. (http://www.bigresearch.com/samples/BIG-president-final.pdf)

If the results of all the other polls had been aggregated to create a similar sample size, similar results would likely have emerged. Given this kind of validation, it is little wonder that corporate America is seeing a surge in large sample, online market research techniques. In times of uncertainty, the best data wins.

Carol