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INSIDE INTENT

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Market researchers have always desired to get up close and personal with consumers. With today's technology, they're finally getting a better understanding of how consumer purchase intent works. Thing is, the ones who pay the bills for market research are asking a lot right now. Clients want research that gives them fast results. What's more, the results they want are tough ones. Market research must: 1. Help marketers understand consumers, and 2. Help influence consumers to buy their products.

Advances in technology as well as methodologies to collect information on consumers give market researchers a fuller, more accurate picture of them. American Demographics talked to several market research executives — some at the world's best-known research companies and others at smaller, up-and-coming firms — to discover how they are responding to clients' need to solve the riddles of consumer behavior.

Companies such as PortiCo Research and Mediamark Research Inc. (MRI) are collecting more information. Mediamark now includes Spanish speakers in its household surveys and adds more questions about Spanish-language media, while PortiCo's expanded “In Their World? interviews gather greater details about what consumers do and who they interact with on a daily basis. “We find out what matters to them in life,? says Caroline Gibbons Barry, PortiCo's president and founder.

Tom Miller, managing director of RoperASW, part of NOP World, a worldwide group of market research firms, including MRI, says that the global company has integrated its consumer segmentation tool, LifeMatrix, into its research products. LifeMatrix asks questions about consumers' values, lifestyles and stages of life. “How people actually spend their time and their different life stages is significant in predicting consumers' preferences and choices,? Miller says.

NOT JUST A NUMBER

Technology is making it easier for market researchers to collect more information on consumers, and better understand the data once they have it. High-powered computers allow researchers to manipulate and mine customer databases for patterns. Simmons Market Research Bureau, for instance, has behavioral segments to help MasterCard know more about its credit-card holders. Simmons' behavioral segments may reveal that the same customers who shop at Saks Fifth Avenue also watch The Bachelorette on TV. So, MasterCard could buy time on that ABC program for its “priceless? ads.

The Internet reaches consumers in their homes without companies having to send interviewers to conduct door-to-door surveys. Also, it lets marketers give consumers more options. For Affinnova, Internet research gives consumers hundreds of options in product design and marketing campaigns. Rob Frasca, president of the Cambridge, Mass.-based, company, likens consumer preference to natural selection. “If products don't improve,? Frasca says, “They won't thrive and survive.?

Some new market research technologies aren't as advanced, but they are significantly more effective over previous ones. Arbitron, for example, is testing a device that it hopes will replace its survey participants' diaries with electronic monitors. Called Portable People Meters, or PPMs, these devices record the number of radio programs a person is exposed to during the day. (Arbitron is also testing a device in Chicago that uses the Global Positioning System, GPS, to more accurately measure how many billboards a person may walk by, or drive by, during a day.) “With a diary, you have no way to know what a person should have written down,? says Thom Mocarsky, Arbitron's spokesman.

HANGING UP

In some cases, marketers are being forced to use new research techniques because tried-and-true methods are either becoming less accurate, too expensive or just plain obsolete. In late 2003, Congress passed legislation allowing the Federal Trade Commission to restrict telemarketing calls to consumers through its “Do Not Call? registry. Although market research firms were exempt, many think that within a few years telephone surveys will be far less frequently used.

The Internet seemed to be the replacement for the phone, yet even cyberspace isn't as open to market researchers as it once was. Internet research's biggest challenge is that it doesn't give analysts a random sample of the population. Only roughly 60 percent of U.S. households have Internet access. Knowledge Networks has gotten around those problems by using more traditional methods to form its consumer panel. Then, for those participants who don't have Web access, the company provides them with MSN TV, an interactive service for their TVs.

AC Nielsen's Homescan solves the problem by partnering with Yahoo!, one of the largest Web portals with an average of 100 million visitors a month. Homescan combines information AC Nielsen collects from its consumer panel sales scanner data with consumers' online activity. The company hopes that this will give consumer packaged goods manufacturers a better idea of how to promote their products online.

DON'T SAY A WORD

More market researchers accept that asking consumers direct questions about what they like and what they may want may not be the best way to get meaningful answers. Barbara Bylenga, president of Outlaw Consulting in San Francisco, says consumers aren't always conscious of the reasons they respond in certain ways to products or trends. Bylenga and Samantha Forster, Outlaw's senior strategist, interview trendsetters to preview what may trickle down to the mainstream. “We interview people and listen to them with our ‘third ear,’? she says. “No one specifically tells you, ‘Next year, I'm wearing lower jeans.’?

BrightHouse Neurostrategies Group uses magnetic resonant imaging to map brainwave activity as consumers are asked questions about preferences. Marketers who understand how the human brain works can create messages and images that influence consumers' unconscious mind. “The better we understand how we think,? says Justine Meaux, BrightHouse's research scientist and market strategist, “the better able companies are to develop products that are aligned to what we want.?

Ultimately, isn't that the goal of market research: giving consumers what they want?

Rob Frasca

President, Affinnova

Affinnova was founded by Noubar Afeyan, a rock star in the biotech field. He was one of the guys who founded Celera Genomics, the first company to map the human genome. The premise for Affinnova is that product evolution is exactly as it is in nature, so why not use some of the technology available from biotech and use it to model products. Just as species evolve, products and marketing evolve as a result of natural selection of consumer preference. The leap happened about five years ago, when Noubar watched IBM's Deep Blue challenge Garry Kasparov, the world's chess champion at the time, to a game. IBM's programmers had consulted with chess experts to give the super computer the knowledge to make the best moves. Deep Blue's collective mind was trying to win. Noubar looked at that and saw the Internet as a way of getting the collective mind together in a cost-effective way. And he looked at evolution. You couldn't do this if didn't have the confluence of three things: high-power computers, cheap research through the Internet — the collective mind — and advances in genetics and genetic technology. They're all related. For the first time, we could pull them all together to facilitate evolution using consumer preference. We devised a system that allows people to evolve things online. In the beginning, we used this to evolve pictures of faces. We'd ask people their preferences to create a virtual model. We can use this evolutionary process to make better products, advertising and direct mail pieces for our clients, including P&G, Kraft, ConAgra, Timberland, and Johnson & Johnson. Unlike, most market research methods, which I classify as measurements, our system literally optimizes millions or hundreds of millions of design possibilities over the Internet in a matter of weeks. We do it with direct consumer input on all features and attributes of the product and our system literally facilitates that evolution. This is a very, very powerful tool for brand development. The applications of this technology are limitless.

Robert Tomei

General Manager/Executive V.P. AC Nielsen Homescan

Within the consumer packaged goods industry, the effectiveness and the impact of online advertising and promotion have always been in question. CPG companies, food manufacturers and over-the-counter drug manufacturers don't sell a lot of products online, however they do have a lot of capabilities to promote them online. We're now able to link those who participate on our consumer panels and with regular visitors to Yahoo! Through our Homescan panel, which consists of 61,500 households and will grow to 125,000 in the next 18 to 24 months, we can collect information offline from brick-and-mortar retailers such as supermarkets, drugstores, mass merchandisers and pet stores. Yahoo! has on average over 100 million visitors on its site a month and it collects information on them. We now have the intersection of Homescan and Yahoo! Our database lets brand managers understand what consumers are buying offline; Yahoo!'s database tells them what they're doing online. They can now integrate the two. This is one of the most innovative and leading-edge capabilities offered to CPG marketers about brand preferences, brand loyalty and cross-purchasing. It allows them to segment out those consumers who are more or less likely to buy a certain brand. It gives them a holistic view of their customers. Clients and their ad agencies now can work on more effective online campaigns to communicate to high-potential consumers. They can use traditional marketing techniques, but on more focused market segments. You don't have one generic description of your consumers. Our two strategic objectives are to continue to collect more and more of what consumers do offline and capture as much of their daily activities as possible.

Justine Meaux

Research Scientist, Market Strategist BrightHouse Neurostrategies

Neuroimaging is one tool to map out brain function to learn how the brain works. We use this as a research tool to learn how people think, how the consumer thinks and how they develop relationships with brands and develop brand loyalty. We don't test specific products or marketing campaigns. That's a little futuristic to think you can put people in a magnet and show them product A, B or C and then show with any predictive certainty what products they like better. The prefrontal cortex is a very important part of the brain for motivation and a lot of cognitive activities. Evidence suggests that that's where the repertoire of our self-knowledge or self-image is. There is not one special part of the brain that lights up and tells someone to go out and buy a product. There's no “buy button.? Instead, we're asking which cognitive processes make up preference and how that is manifested in the brain, and what are the neurological processes. New MRIs and advanced PET scanners have exploded our knowledge of how the brain works. Special areas of neurosciences have developed. Cognitive sciences explore how we think and how we feel when we make decisions. Emotion influences our decisions whether we are conscious or unconscious of them. The relationship between businesses and consumers is based on preferences. We act as consultants. We can tell companies how the human brain processes information and how the consumer thinks. This is not a novel application of the technology, but it is a novel application of the knowledge. We think what we do is market research, but it is not a narrow definition. We're not polling hundreds and hundreds of people about what ad or product they like better. We ask questions at the highest level: what makes people feel satisfied? Our research is grounded in quantifiable, objective data of how the brain really works. We make that insight actionable for our clients: here's how to position this product and brand. What should they communicate about their brand and in what context? Research tools currently available rely on consumers verbally articulating their thoughts or feelings about a brand. There's an inherent limitation for them to do that accurately. We're not conscious of the processes that lead us to make our decisions. We're learning that emotion plays a key role in decisions that are very logical and shouldn't have anything to do with emotion. People don't think rationally and logically when they're making decisions. If marketers are trying to make a connection with the consumer, they have to understand how the brain works.

Caroline Gibbons Barry

President/Founder PortiCo Research

Our clients want to be more “in the world? with their customers. Ten years ago, they wanted to look at the head of the household, the decision maker. Mom picks the toothpaste and everybody uses it. So everyone has to talk to mom. We said you have to talk to everybody. Now, we've discovered people are whole persons. We go to their home, to their workplaces and to their favorite places in the neighborhood. We want to get to know their passions. Then, when you communicate with them, even though you're still talking about toothpaste, you have a much more holistic, or profound, understanding of the consumer, their language and what matters to them in their lives. In the workplace, we find out what kind of food they bring for lunch or what drinks they prefer. We see a different behavior and mindset at work than at home. Potentially, a brand could be more powerful at home than at work. Some brands let you nurture and pamper yourself and maybe those are the brands you use at home. Others are more no-nonsense and those are the ones that you connect better with at work. People have different identities, which can be very powerful, but sometimes they can be in opposition to one another. In the last few years, people have been trying to get in touch with their core self, their true self underneath all those identities. People are sensitive to their roles, but they want to be recognized for the person underneath all that. Research shows consumers today connect to brands on a deeper level. There's almost a push back to advertising that says, ‘Get this new container, because we know you're a working mom with no time.’ I don't want to be seen as a working mom, but my true self. So, research has changed and the questions have changed. Years ago, a company would come up with a bunch of products and then figure out how to sell them. Now we see what people need or want and then go and make it. Companies have almost flipped their business approach around. What is happening is that the consumer is setting the standards and creating the path or course.

John Lewis

CEO Knowledge Networks

The future looks very interesting because it is harder to get people on the phone. The Internet is the obvious answer. Knowledge Networks doesn't simulate a random sample on the Internet, it is a random sample. Sixty percent of U.S. households have Internet access. We reach out to people through the telephone to ask them to join the panel. They can either use MSN TV, (formerly Web TV) or we allow them to use their own Internet access. Basically, we're eliminating the problem of getting to the other 40 percent who wouldn't be included in our panel if we just used the Internet. Instead of getting people through pop-up ads or getting just anyone to answer a survey through e-mail lists, our panel is made up of a random population. Our panel is different from anybody else's. It lends its insights in the marketing space and in the public policy space. Very few people do that. People provide rich information about their households and we learn more about them over time. We can overlay other things in the future. But the Internet is not an exhaustible resource. You have to build the right community. Pop-up ads and e-mail lists are both under attack. Pop-up ads will be gone in a couple of years. And there will be a limitation on buying e-mail lists. What is important is to create a growing, vital panel that wants to answer questions. Technology is moving so fast. Whether it's DVRs, PVRs, TiVos or MSN interactive boxes. There will be different access across a lot of homes. We might ask questions by cell phone. There will be multiple devices to suit the panels. Mobility is generally better for younger panelists. They don't want to go home and answer surveys, but they may be more willing to do it on the go. You can tap into their minds when they're out and about. This may improve surveys, for example, on away from home food consumption, or drinking in bars. If they have a PDA, they may take it more seriously and answer the questions more accurately. The Internet is a tool, but not a full answer. We all have work to do.

Anne Marie Kelly

VP, Marketing and Strategic Planning Mediamark Research Inc. (MRI)

We've expanded our national sample. We're known for strict probability samples that are projected to the entire U.S. as opposed to a pool or an Internet survey. We interview 26,000 Americans in their homes on the media they use, the brands they use and the products they use. We ask attitudinal questions, too. How they feel about buying, sports and politics. We also ask psychological questions. It's a painstaking process. We'd interview Hispanics, but only if they were English speaking. If they didn't speak English, then we'd ask if a neighbor or someone else could translate for them. We had Hispanics in our sample, but not Spanish-speaking ones. We've recruited a bilingual traveling task force. It's enormously expensive. We started it in September 2002 and we've released data every six months. We're about to come out with more data in the next few months. Now, when we come to a Hispanic household, they can answer the surveys in English or Spanish, depending on their choice. All interview material is translated into Spanish. We're adding brands specific to Hispanics. We ask questions on viewership of Spanish-language programming — there are about 135 programs — and readership of Spanish-language magazines like People en Español. We're not giving separate Hispanic surveys, but we've changed our methodology. So, now we can give a seamless database to our clients to compare and contrast. There's a single source of data, because we're asking the same questions of all people no matter what language they speak or what level of acculturation they have. Basically, magazines and other media companies — TV networks, radio stations, advertisers and ad agencies — can better sell to the Hispanic market. Hispanics make up 13 percent of the U.S. population and their buying power is growing every year. So, when you do a survey, you have to make sure they are fully represented.

Tom Miller

Managing Director RoperASW

We have a new brand strategy called LifeMatrix consumer segmentation model. It is a sophisticated way of segmenting markets based on people's values, lifestyles and life stages. It's different from previous segmentation because we've added dimensions, such as personal values, which are unique. We've embedded this segmentation model in most of our consumer programs like Roper Reports and MRI's audience measurement. We've integrated our vast consumer databases with long-term trends — domestic and global — that we can take into our media planning. Some dimensions have been tweaked, so that they can work all around the world. We've added it to our 30-country study in Roper Reports Worldwide. It gives us a more complete picture of what motivates consumers' attitudes and behaviors. The predictive values of personal values and lifestyle, and how people actually spend time and their life stages is very significant in predicting consumer preferences and choices. So, our clients can better target the market and their brands. We're looking at a chance to be partners with our clients as opposed to being considered vendors. Internal research staffs are smaller than they were 10 to 20 years ago. Companies are making fewer significant investments in market research technology and techniques, so there's more opportunity for partnerships. We see the business becoming more closely aligned with market decision-making. Research is always looking for ways to improve the ROI our clients make on research. So, we're integrating information across databases, we have more sophisticated models, we're taking the level analysis up several notches. Increasingly, we're consulting with clients on how to implement specific recommendations within their organizations.

Max Kilger

Director of Statistical Sciences Simmons Integrated Marketing Solutions

It used to be that if you wanted to find out about linen stores in L.A., you'd take data on linen consumption and information from the census tracts. Market researchers would take database A and database B, and smack them together. Unfortunately, data sets have different people in them. Nielsen, for instance, has incredible data on what people are viewing, but it doesn't have anything on the products or the psychographics of those viewers. Other databases have thousands of products and hundreds of psychographics, but they don't have data on viewers. Database integration creates a behavioral system that spans the two database systems when the people aren't the same. As a social psychologist, I'm a big believer in behavior. We have been doing this for about five years, but it's still very new. Here's how it works: Let's suppose you have two databases: Nielsen's viewers and a consumer product database. First, you create behavioral segments. Nielsen's has 20 and product consumer product one has 20 as well. Let's say John Smith is in behavioral segment 7 and Nielsen says he's in the late-night junky segment. He watches Conan O'Brien and Letterman. Then you go to database B and find a behavioral segment, one that is more likely to eat Cheese Whiz. What do they have in common? That's the key. What you do is produce a behavioral system that spans database A and B. You look at the driver variables on the Nielsen side and driver variables on the consumer product side. If late-night junkies in the Nielsen database index 235 for Conan, then you know things are consistent. You want behavioral segments to act different. Next you test non-driver variables. You want to know if the people who watch Conan also eat Cheese Whiz. If late-night junkies index 195 for Cheese Whiz, then you know that that consumer product segment 7 is not only a discriminating driver, but a non-driver variable. Then you can go to the client and say, ‘Give us an ad buy for Cheez Whiz on Conan.’ Using data integration you can find your consumers and find them at a bargain. Or, if you're a network and you're trying to hawk a new program to Cheese Whiz advertisers, it's hard without ratings. Now you can say that that show is similar to others in that behavioral system: late-night talk shows. Then you can say their viewers index 195 for Cheese Whiz and you've made your sell. We're making refinements to make more powerful drivers to produce integrated systems with more pull, more predictive power. We're bringing the consumer into sharper focus and solving the problem of no single source database.

Thom Mocarsky

VP, Communications Arbitron

The Portable People Meter, or PPM, is a new rating system that's been under development for the past decade. This spring we expect to test it with Houston's radio, TV and cable stations. Any electronic media can have an encoder, which sends inaudible codes — to the PPM. It's multimedia. Right now, measuring radio audiences is a manual process. With the PPM, people who participate in our ratings survey carry a device the size of a little cell phone. They don't have to write anything down, or push any buttons; they just carry the PPM. It passively picks up the encoded frequencies from TV, radio and cable broadcasts and logs them. All the people have to do at the end of day is put the PPM in the bay station, which sucks out the information and sends it to a hub at Arbitron. Everyone 6 and older will have a PPM. There's also a motion sensor inside the PPM, so it records when the people are moving and for how long. With a diary, you have no idea what people should have written down. But with PPM, we know it's being carried and if it's being carried, we know it's doing its job. It's better than what we do now. We're measuring exposure to encoded audio. So far, we're finding individual radio stations have much greater reach than the diaries indicate. Advertisers tend to use radio as a frequency buy, but they could use it as a reach buy. PPM uncovered the truth. Also, electronic measurements mean that we'll get information a lot more quickly. Currently, it takes about 21 days for people to mail the dairies to us and for us to transfer the information into a database. At some point, we may be able to do that overnight. And advertisers, who like electronic measurements, will have more confidence in radio. We've been testing this puppy in Philadelphia since mid-2000. Radio clients wanted to see it tested in a market with more Hispanics. The Hispanic market is difficult to survey because of language and culture. That's what brings us to Houston. Philly is 5 percent Hispanic; Houston is about 28 percent. Philly is 19 percent African American; Houston is about 16 percent. The two most difficult groups to capture, we have in abundance.

Barbara Bylenga

President Outlaw Consulting

We help our clients understand the mainstream opportunities of trendsetters. In an extreme way, trendsetters' attitudes show us what's coming. We predict whether the mainstream will adapt those attitudes or not. We compare our trendsetters' responses to those of the mainstream. It's possible to predict what will trickle down before it actually happens. A good example is Levi's. A few years ago, we noticed that trendsetter girls were adapting a sexier look with low-rise jeans. At first, the mainstream was very reluctant. The jeans had promiscuous overtones for them. We worked with Levi's and they created the belly button ad and that made it safe for the mainstream to wear them. What we do is more art than science. We interview the trendsetters and then study the mainstream. Then we study the barriers and decide what will pass through them. It is usually a toned down version. What we do is ethnography. We sit down with our trendsetters in their homes and interview them. You really have to listen to them with your third ear. No one specifically tells you, ‘Next year I'm wearing lower jeans.’ But you can walk away with a sense of the social dynamic and a gut feel for what will happen next. We talk to 30 or 40 people, walk away and then do our own analysis. For instance, right now, women want to separate from past generations. Young girls don't want to be seen as selfless. They want to be confident and strong. So, we sit back and try to understand the attitudinal shifts and how they will play out. Trendsetters give us ammunition, so that when we have to explain our findings to our clients, we can do it in a much more in-depth way. We can say this is why consumers are going a certain way. We do a lot of the recruiting for trendsetters ourselves. When there's a new category, we figure out who is leading it. It's a good way to know the category. When we find a trendsetter, we keep them. As they age, they're interesting to other clients and on other issues. Two years ago, our trendsetters were wearing Ugg boots. Surfers in southern California wore them because they were warm. They may be in style now because they represent comfort. Since the world is an unstable place, people want to feel better. The wave of the future is to have access to the visionary, articulate consumer.

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