Studies: a sector that works twice as hards

Bennet Holmes — Wed, 25 Feb 2009 09:12:00 +0000

Studies or communication: you can’t slack off in a crisis !

Whereas General Management might be tempted to cut certain budgets and without thinking much about it, some on the other hand, keep up the pressure.

In these difficult times advertisers have been increasing their pitches on the net to promote the advantages of advertising and, in a more general way, all communication. At the same time they have to explain and clarify the nature of information exchange, guide consumers, etc. and, if possible, add some humour in order to provide some comic relief !

Research groups have less presence in this field and are not as involved in blogs. Budgets, in general, are being tightened but, in spite of this, the overall sales figures are still very significant!

There is no need to explain the importance of knowing the market and the consumer, especially his own, to any one in business. Research studies have been gaining in popularity for several years because they are becoming more and more reliable and major institutions, as well as smaller ones, are becoming increasingly effective at using the various methods and techniques.

More and more studies

According to the “Global Market Research 2008”* report published by ESOMAR**, the world research market had a sales turnover of 28 billion dollars in 2007, and has been growing continuously. This represents 6.5% growth between 2007 and 2006! If the entire economy had the same growth, how good would that be? If only government leaders worked effectively! If only companies made the right investments at the right times! If only there was a strong market with high demand!

Europe alone represents 43% of the world research market, with more than 10 billion dollars in sales!

So where does France stand in all of this? It is actually not doing too badly in this very competitive market. Our country is just behind two Anglo-Saxon countries (USA and Great Britain) and is positioned as 4th in the world in terms of sales turnover. Germany is the first European country but France is ahead of Japan! Who would have believed this?

This is proof that the research industry knows how to be appealing using methods that are more and more innovative and reliable. Even in a good market, it is critical to remain watchful. The larger and medium-sized research companies are always keeping an eye on every movement!

At ACTIPLAY, it is the same thing. The interest in ActiSKU since its launch in October, 2008 is proof of that. A dozen companies in this sector got together and almost all had the same response.

So where does “online” fit into all this?

All that industrial members, the media and most companies are asking for is that research institutions and study groups help them increase their sales turnover through a better understanding of their clients and the market. They want to direct their marketing and business efforts more effectively but they are also trying to anticipate future conditions.

Even if most of the methods used by research companies are still “classical” (in-field studies), this does not mean that the Internet is not a serious contender! It provides a quick turn-around time, significant participation numbers from respondents located world-wide, and costs that are finally becoming acceptable to clients. Online surveys are, in fact, actually bolstering the growth of this activity sector.

The arguments opposed to online studies, especially regarding the reliability and quality of the results, although justifiable in the early years, are steadily losing their validity as time progresses.

The main problems are due to the very nature of online sampling: non-representation, non- probabilistic sampling, “professionalisation” of respondents, and its collection method: Can an Internet surfer represent a non-Internet surfer? The “projectibility” of the results is also still being examined (external validity).

Today, with the development of online panels, created and maintained by companies that are becoming more and more specialised (ex: Panel on the web) along with the development of hardware, high-speed networks and the constant increase in the Internet penetration rate, these arguments are no longer as valid as they used to be.

On the contrary, the specialists*** are promoting its ability to provide “accessibility to numerous and varied targets, recruitment of rare profiles with low incidence rate, collection speed, sincerity and depth of responses, background information and pre-qualification of respondents”. In addition to this, the cost is often significantly lower than classical studies.

According to Esomar, “quantitative, online studies represented 25% of the studies in 2007” and 22%, according to the “Synthec Etudes de marché et d’opinion” (qualitative and quantitative online studies).

Making a return on your investment

In this rationale, it is not about diminishing the use of in-field studies, which still represent a large part of the market and which will always be important, in spite of their disadvantages which are both recognised and enumerated by the specialists: “For cost reasons: to limit travelling expenses, surveys are often limited to large cities; polls on the street are often limited to busy main streets some difficult suburbs are never visited (- this is also true for very posh neighbourhoods); including many entire areas where there are rarely any pollsters (the “centre of France”, and the rural areas in general). Field studies, which are often considered to be more “qualitative” are much more expensive to perform and are, in fact, rarely probabilistic”.

It is more useful to promote the use of online studies due to the continued development and democratisation of the Internet. A “shopper test” solution in a virtual environment, such as ActiSKU, shows that online testing does work and the results can satisfy the best industrialists. I would invite you to explore (or re-explore) what I wrote in my first article concerning the creation of ActiSKU. There you can read that Carlsberg, being careful to compare results obtained online and offline (in the field) using the same tests state that there is a correlation of more than 80% in the results.

According to a study conducted in 2007 with 4,427 panellists selected at random from an online XL panel (Kristof De Wulf and Sam Berteloot), the quality of the results obtained from in-field and online studies were compared and he concluded that there was no difference in the consumption behaviour (food, drink, equipment, leisure, political activities etc.). There was no difference in the quality of responses (consistency, depth), except among email recruits (fewer responses) and via the Internet (higher click rate) and no difference in the motivation to participate in the studies.

According to another study (Annelies Verhaghe 2007) conducted with 2,084 panellists by means of an online XL panel that used incentives such as random draws and charitable donations, 32% of those surveyed stated that they were participating in order to express their opinions and 27% merely to help the researchers!

Let’s talk about the future…

At Harris Interactive, SEMO 2008, the question was asked in the following terms: “For online studies, the current and future (r)evolutions are still numerous. Will the development of community tools change the method of polling consumers? Is it possible to gain a greater insight into their intimate world using new technologies? To what extent can one simulate reality using online studies? What about mobile phones? What can be done now? What can be done in the future?”

As has already been stated, Europe represents more than 40% of the research market and the rest is held by the United States and Japan. What can be done elsewhere? There are many emerging markets and there will be continued growth in the need for effective research especially in countries that are just beginning to industrialise.

Personally, I think that online methods are going to continue to advance because they increase the range of options available to industry and are economically flexible. ActiSKU is part of this context: modernity of media, adaptability to needs, flexible business model and reduced costs (definitely a “plus” at this time when budgets are being squeezed!).

I invite you to explore the excellent analysis of the development of online tools posted on the www.e-marketing.com site: click here

*Global Market Research” is a complete report on world-wide research trends. It provides information on sales turnovers, but also discusses revenue sources of institutions as well as the most favoured methodologies. It provides an over-view of the best 25 research institutions in the world and the financial numbers for the top ten.

**ESOMAR, with 5000 members throughout the world in approximately one hundred different countries, is a world-wide organisation that works to improve and to promote markets and discussions, reveals problems and offers tools to facilitate effective decision-making.

***Refer to the study conducted by Synthec Etudes, AFM on this subject

Visit : http://www.esomar.org/

ActiSKU - Tag - Synthec Etudes

Studies: a sector that works twice as hards

Studies or communication: you can’t slack off in a crisis !