MRIA, Prairie Chapter

January 2006

Why Buy the Fish When you Can Own the Fishing Rod?Leveraging Custom Panels

Presented by Michael RodenburghVP, Consulting Services

Why Buy the Arctic Char When you Can Drill Your Own Hole in the Ice?Leveraging Custom Panels

MRIA, Prairie Chapter

January 2006

Presented by Michael RodenburghVP, Consulting Services

Vision Critical Overview

Tech firm dedicated to the research industry since 2000

Focus on MR tools that simply, enrich and empower

■ Services limited to our core expertise - online panels

60+ custom panel installs in the past 12 months:

■ US teens, Air travelers, Radio listeners, TV viewers, Canadian women, Canadians 18+, Magazine readers, Financial Advisors, Loyalty Card holders, Runners

Partnerships with key sample providers (SSI, eRewards, etc.)

Online Research

Current value of the North American research industry: $7 billion

33% of all quantitative research is being done online currently

Value of online research market set to triple in the next three years, reaching $4 billion by 2008

In three years that number will be over 66% online

As a result, the use of Internet panels will continue to see explosive growth for the foreseeable future

“the availability and use of panels has ‘democratized’ the…research scene”

“end clients are more and more convinced of the reliability of results”

“consumers can share their opinions…in a less intrusive, more respondent-centric way”

“To put it simply, panels are hot!”

ESOMAR Conference Chair,

Worldwide Panel Conference March 2005

Budapest, Hungary

“Within 3 years, online panels will be the mechanism by which 50% of all primary research is done, across industries.”

EVP Marketing, $10 Billion B-B Technology firm

Types of Panels

Large national consumer

Large national B-B

Industry or demographic specific (public)

Multi-client/syndicated

Proprietary■ Blind

− Recruited from national panel/database− Recruited through industry sources, lists, internal sources

■ Customer panels− External and internal recruiting sources− Affinity-build− Product design help

■ Customer councils− Smaller− B-B− Brand champions

Customer Panel Landscape

VIP Communities (300)• Bulletin boards

Panel Advisors (30,000)• Panel+

Customers (3,000,000)• EFM, CRM, Email

Target Market (30m)• Monitoring, CRM, Email

• Consolidation likely LT

• Pressure from both sides

Custom Panels vs. Syndicated Panels

Today’s syndicated panel is the ‘telephone omnibus’ of tomorrow

■ “Rent” access to the panel for ad hoc surveys

Custom panels are those that are proprietary to one client■ Respondent contact information and data is typically ‘owned’ by the

end-client

While syndicated panels are useful, many are not perfect■ Rate of professional survey taking inside syndicated panels

■ Ease of joining many online panels is creating many professional survey takers

Comscore Networks reports that:■ 30% of all online surveys are taken by only 0.25% of the Internet

population

■ These heavy survey responders each took an average of 80 surveys per quarter in 2004 – that’s about 1 a day!

Drivers of Custom Panels

Why are Custom Panels becoming popular?

14% of consumers and fewer business decision makers are accessible by phone – CASRO

The average response rate of opt-in email lists for surveys is 1.5% (DMA)

The most costly components of low incidence consumer and B-B online surveys today are sample and incentives

Demand for more, faster, agile intelligence sources

SPAM and telemarketing backlash

Desire for client control

Our prediction is that growth in online panels will outstrip syndicated panel growth in 2006

■ Upcoming research conference in San Francisco will have FIVE speakers all speaking about some component of custom panels

This All May Not be Good News for the Research Industry

An ESOMAR study conducted 5 years ago regarding how the industry is perceived by senior executives suggested that the operating model for the MR industry would change very soon

Client

Research Supplier

Respondent

2009

1999

And it’s happening now…

Research is going direct to the buyer…consultants are being cut out of the equation

Look at the proliferation of ‘do it yourself’ web survey tools online:

■ Zoomerang.com

■ Surveymonkey.com

■ Websurveyor.com

■ Panel+

■ Etc.

Why, you ask.....?

Custom Panel Benefits

■ Cost Savings− Information is becoming a commodity, and panels are more cost

effective

■ Fast Turnaround− Usable results can be gathered in a matter of days

■ Sampling flexibility− Strategic segments in the panel can be isolated for specific studies

among low incidence groups

■ Longitudinal analysis− Unlike ad hoc studies, panels allow for tracking behavior over time

■ Ownership of panelists− Clients like the idea of control - nobody else burning out their

respondents, and it utilizes their in-house databases for on-going research

■ Visual stimuli− Ability to assess still images and/or video formats

■ Shorter interviews− Eliminating common questions from each survey shortens average

survey length, keeping response rates high

Other Panel Benefits

Provides better information vis-à-vis cause and effect relationships

More easily managed on an on-going basis (no more fighting fires!)

Reinforces market focus throughout the organization

Allows you to conduct research when you would otherwise not conduct it

Is a Panel Right for My Organization? Yes, if…

Sample is difficult to find, low incidence, stringent screeners

There is a need for ongoing, continuous feedback; ■ 6 or more surveys of the group will be done within a year

Cost of tapping third party list brokers or competitive customer databases are significant-need to cut long term costs

Desire to build an own your own corporate market intelligence asset

Turnaround is needed quickly

Behavioral or attitudinal data should be tracked across time

Would like to understand the “why” of CRM/transactional data

You have an easy, low cost means of recruiting panelists■ Web site links

■ Accurate in-house email lists

■ Large phone survey that can be piggybacked on to recruit panelists

Separating Research from Panel Mgmt

“online panels require input from many disciplines outside normal market research practice…”

ESOMAR Conference Presenter

Worldwide Panel Conference 2005

The panel manager needs to be:■ Part researcher

■ Part advertiser

■ Part respondent advocate

The Need for Technology

A panel is more than an email list and a web survey

You need to consider all of the components required to make the panel work:

■ Panelist portal

■ Survey authoring & hosting

■ Sampling management

■ Email deployment

■ Online qualitative (online focus groups)

■ Real-time reporting

■ Panel management

So, you want to build a panel?

OngoingPanel

Maintenance

Develop Panel Plan & Recruiting Plan

Customize Panel+(Incl. branding and skins, etc.)

Recruit

Profiling Survey

Ongoing Research

Quarterly Panel Health Assessments

Panel Plan

Successful custom panels have a plan that outlines:

■ What the optimal panel size is, based on:− # of studies− Sample sizes required for each study− Response rates expected− Incidence of segments− Expected churn rate− Panel usage (new product only vs. ad testing vs. customer sat)

Next , the plan determines the criteria for representation

■ Specific segments required

■ Required quotas or subgroups

■ Age/language/Region, any others?

Panel Plan

The panel plan also lays out criteria for:

■ Anticipated research program

■ Frequency of Contact

■ Response rates

■ Purge Rules

■ Incentives

■ Newsletters

Finally, the plan provides estimates for recruiting timelines & costs (if appropriate)

Should the Panel be Branded or Blind?

Branded advantages:

■ Clear and real connection to the panelist

■ Able to dig down into the relationship between yourself and your customer

■ Much less expensive to recruit

Blind advantages

■ Able to research competitive space without concern for bias

Panels can be both blind and branded at the same time!

■ Blended strategy combats source bias and decreases recruit costs

Panel Recruitment Best Practices

It should be treated it like an advertising campaign – with a theme and creative direction

Think about engaging your marketing department, including a creative director and copywriter

Recruitment method depends on nature of panel, but can include one or more of these sources:

Direct mail invitations to customers (branded) Telephone recruitment for high value - hard to recruit target

segments (branded) Purchased double opt-in email lists (blind) Viral marketing and member-get-a-member (blind) Media purchase on appropriate business websites (blind) Banner/pop-up recruitment from client website (branded or blind) Magazine advertising (branded or blind)

Multiple sources is usually highly recommended to obviate any bias

Panel Composition

Bigger isn’t necessarily better

Size of panel is dictated by minimum sample sizes, anticipated usage, response rates to each study

Panel doesn’t need to be representative, in fact it may NOT be representative on purpose

■ You only need to have the capability of drawing rep samples from the panel

Optimal Usage

Panel usage should emphasize frequent, short surveys

Past experience has suggested optimal number of survey invitations is between 12 and 24 per year

How big does it need to be?

Sizing can be based upon anticipated usage of the panel

Easy way to estimate required panel size:

■ Lower limit: ((number of surveys * sample size per survey)/12/average response rate)

■ Upper limit: ((number of surveys * sample size per survey)/24/average response rate)

Therefore, if we planned to have 20 studies at 1,000 completes each, and ran an average response rate of 35%...

■ Lower limit: 2,381

■ Upper limit: 4,762

■ These calculations assume equal distribution of surveys across all demos, etc.

Panel Sizing – Another Approach

Minimum sample size for each study in specific segments

Example:

1. A company has 8 target segments

2. 400 is considered an acceptable sample for analysis within any group

3. Panel should be able to hold a 35% response rate without aggressive purging (conservative estimate)

We can therefore calculate 8 segments*400/0.35 = 9,142 rough panel size

Panel Profiling & Composition

After recruit plan complete, recruiting and panelist profiling commences

Profiling survey becomes the criteria against which respondents are qualified

■ Demographics

■ Firmographics

■ Category participation

■ Lifestyle and values

■ Profiling survey can automatically de-duplicate respondents based on email address

■ Profiling survey must include a double opt-in!

Incentives

People join panels for 3 reasons:

1. Connectors: they want to be part of the decision making process

2. Pay to Play: they want to be rewarded for their time

3. Mavens: they want access to the information collected

Incentive programs, especially B2B, must consider all 3 motivations and plan accordingly

Incentives

We recommend a 3 pronged incentive plan:

1. Affinity: Emphasize the elite nature of the panel Identify client action items from information collected

2. Rewards: Rewards don’t have to be complicated to be effective

free conferences, magazine subscriptions, free LD, Amazon.com, gift certificates, charity donations or IT gadgets, prize draws, etc.

3. Information: A quarterly newsletter (or a report for B2B panels) written

specifically for panelists using information gathered during the research reinforces interest in participating

The Case Study - WomensVoiceOnline

WomensVoiceOnline

WomensVoiceOnline:

■ TV viewers (obviously women!) 18 to 54 yrs

■ N=2000 (approx) across the country

Panel used to assess:

■ Viewing behaviours

■ Movie reviews

■ Advertiser studies – shopping behaviours, etc.

Recruited from a combination of online advertising, mainstream media (TV ads), and double opt-in email lists

The Case Study – WomensVoiceOnline

Respondent Log-in

Panelist “Lobby”

The Results

They averaged roughly 1 survey per month

Key is ability to get results quickly – 48 hour turnaround is not unusual

Very high response rates – usually 40% or higher, sometimes as high as 65%

Low proportion of non-responsive panelists

Allowed the network to address sales opportunities that would not have been otherwise addressable due to turnaround time

Provided important insight into the correlation between viewing patterns and product usage – allowing them to alter programming accordingly

Only 10% of the panel have never responded to a

survey.

Only 182 have opted out of the

panel since inception last year.

What’s Ahead for the Future?

“Respondent for life”

Sample fodder evolves to respected advisor – the general public are not ‘lab-rats’

Panels and councils become function and industry specific, customized by size, sponsor affinity, and level of interaction (feedback, profiles collected, transaction, promotions)

Integration with CRM, blogs – research turns into Feedback Marketing

Democratizing Customer FeedbackCan Research Harness this Power of Online Customers?

Internet democratizes the consumer environment

Can a panel harness the power of the internet to be both marketing and research?

37,000 downloads:

■ Tiny Machine

2.2 million downloads:

■ iPod’s Secret

Thank You!

For More Information:

Michael Rodenburgh, VP Consulting Services

mike.rodenburgh@visioncritical.com

(604) 647-3563