Millions of Americans-especially the prime youth demographic-have cut the landline phone in the home and decided to go wireless. At the same, about one-third to one-half of all U.S. landline residential phone numbers are on the federal do-not-call list-and millions of who aren't employ Caller ID and call blocking. Cellphones are off limits to pollsters, and while legally do-not-call regulations allow landline polling, those calls aren't often welcome. "Perceptually, consumers don't differentiate between research and telemarketers," said Lenny Murphy, VP-operations for Dialtek, a field-data-collection company.
"There goes everybody's productivity for doing research," said Mr. Murphy, noting that survey response rates are falling, from 30% to 40% in past years to about 20% more recently. "You have to call more people to get those willing to participate."
The result of these combined telecommunications changes is a hike, on average, "in the ballpark of 20%," in the cost of marketing and other surveys conducted over the phone, he said.
According to the Yankee Group, about 11 million people, or 3.5% of U.S. households, have abandoned landline phones entirely and rely only on mobile phones, up from 1.7% in 2002 and 2.1% in 2003. Many of the landline-phone-cord cutters are in the 18-24 demographic. As they age, there is the potential the phenomenon will "bleed" into other demographic groups, said Kate Griffin, senior analyst, Yankee Group Consumer Technologies & Services. "It's been huge even in its first iteration," she said, "and we haven't seen the full effect yet. Pollsters and telemarketers will need to adapt their business models" because they can't call cellphones.
Marketers have devised new survey methods, many using hybrid methodology, such as use of the Internet to screen people and then to call for a live interview. Others are relying completely on Internet research.
Mr. Murphy maintains Internet surveys have a "terrible response rate," in most cases garnering a response rate of 1%. However, Christine Hannis, head of communications for Omnicom Group's BBDO in Europe, isn't concerned about the rising number of younger consumers cutting the cord. "This generation is not overwhelmed by messages. They have very good control over communications and don't engage in things they're not interested in," she said. But when they do engage, she said, they are surprisingly open, citing a recent Net study she said she completed in 24 hours.
William Cook, senior VP-research and standards for the American Research Foundation, cautioning against an "angst frenzy," said the cheaper cost of online research is helping offset hikes in the cost of telephone surveys. For the research companies, moves taken to reduce costs include outsourcing call centers to Canada or even India.
`the pain is here'
Louis Mastria, spokesman for the Direct Marketing Association, said some 64 million phone numbers are on the federal do-not-call list and about 55 million of those numbers are residential phone numbers. The remainder include cellphone and business numbers. "The pain we anticipated is absolutely here," he said, blaming the list for the loss of jobs at call centers, and for harming certain businesses such as newspapers, which relied on telephone calls for subscriptions. The DMA said 66 million Americans made telemarketing purchases last year.
Eric Nielsen, senior director-media strategies for the Gallup organization, said the youth market makes up about 10% to 13% of the population and if you are missing 4% or 5% of those because they have no landline phone, "then you're missing 30% of your sample or base."
"The mobile generation is upon us," said Jeff Minsky, East Coast media director, OMD Digital. "It's not going to happen overnight. But it's going to happen."