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Market Research Continues to Move Online

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[ Business]

A few months ago, I wrote about online panels, and I am finding more and more marketers moving their market research online.

I spoke yesterday with Kathy Mahoney, Vice President of Market Research at Sirius Satellite Radio. She’s sold on online market research for her company.

Kathy has experimented more and more with online market research over the past few years, and now says that it’s definitely part of how Sirius does business. "There’s a difference between people who take part in these online research programs and everyone else—they spend a lot more time online," she says. "But for Sirius, that works out really well," she adds, because Sirius customers do tend to spend a lot of time online. Kathy advised that "someone marketing Crest toothpaste" might want to look at the issue more.

Kathy talked in detail about a challenging project she did in March with Phi Power Communications, when she had little time to choose between several alternatives for a combined print and TV ad campaign. If she had used traditional in-person focus groups, she’d have needed several weeks, but her online test took "less than a week," she reported.

She had hoped that the test would reveal an overwhelming favorite among the ads, but it didn’t. Instead, she was able to "eliminate some of the [poorly performing ads] and choose among the rest."

Online testing is not cheap—this test cost $40,000 when a focus group might have totalled just $10,000. But Kathy says it’s worth it. Not only could she complete the tests more quickly and get the winning ads on the air, but she also was more sure of the results. A $10,000 focus group test might have tested just a few dozen respondents, while her online test polled 1600 people.

"There’s still a place for in-person interviewing," Kathy says, "but I use it far less then in the past." She uses focus groups for early qualititative research, where she wants to understand the customer’s vocabulary in an area "when you don’t know anything."

Marketing opinion seems to be coalescing around how to use these various tools. Focus groups are ideal for qualitative questions—especially "why" questions. Online panels can handle qualitative, too, but you can scale them to be statistically significant. We need to be careful, however, not to rely on what people say they do as opposed to truly tracking customer actions on our Web sites—what they really do.

Kathy’s planning to do more online market research next year. Online panels are getting easier to set up. Maybe you should be setting them up, too.

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