Market Research: A Gold Mine for the Web?

When executives from Yahoo! (Nasdaq: YHOO) met with analysts last month, they said they were eager to expand the portal's participation in online marketing research. Already, Yahoo! said, nearly a dozen research firms had asked about partnerships.

In looking to leverage its user base to become a sounding board for new products and ideas, Yahoo! is traveling a well-worn path.

Experts told the E-Commerce Times that the Web is nearly a perfect medium for conducting marketing research. It is less costly and faster than traditional methods, such as mail and telephone surveys, and recent success stories have helped erase many lingering questions about the accuracy of Web-based research.

For example, Harris Interactive boosted online polling by coming within percentage points of calling the down-to-the-wire 2000 U.S. Presidential election results -- days in advance.

"We put to rest the notion that accurate marketing research couldn't be conducted via the Internet," Dan Hucko, a spokesperson for Harris Interactive, told the E-Commerce Times.

True or False

Concerns remain about using the Web for market research, such as whether the people filling out surveys are exactly who the pollsters think they are, and how well the online sample reflects the U.S. population as a whole.

However, more are coming to believe that the Internet's advantages for market research transcend the potential pitfalls.

Hucko said that other advantages that the Web has over telephone research include the ability to collect responses 24 hours a day, and to show pictures and even video to respondents.

Fast and Faster

Additionally, because online research is relatively inexpensive, corporations can collect information on an ongoing basis. In the past, according to market research experts, companies would often gear up for months to conduct a single survey, then have to wait weeks for the results to be tabulated.

Microsoft's (Nasdaq: MSFT) MSN (Nasdaq: MSFT) has used Web surveys to gauge user attitudes about its site. Many of its surveys -- at times MSN has conducted up to 50 a month -- last only two days and draw as many as 3,000 answers in that time, the company said.

"Our goal is continuous improvement, not point-in-time improvement," said Deepak Agrawal, vice president of MSN. "To do that, we need the ability to collect and analyze data quickly."

America Online (NYSE: AOL) formed a separate division several years ago to bring the power of the Web to bear on the world of consumer surveys.

Fast Facts

The Internet is increasingly becoming the place where companies, from fast-food restaurants to auto makers and clothing chains, turn for fast consumer responses.

AskJeeves.com spokesperson Michele Mehl said that site's CRM division provides marketing research to a host of offline organizations, including Ford Motor Company and First Union bank.

For instance, Mehl said, the speed of the Web proved crucial when Ford wanted to know the best way to conduct a product recall.

All-in-One

Online research and marketing are also starting to dovetail. Rachel Honig Peters, a spokesperson for MyPoints.com, said that company has organized promotions for Gap.com that target consumers with varying discounts.

The responses not only drive sales, but also help Gap understand what motivates buyers.

"Market research and marketing online are becoming the same thing," Peters told the E-Commerce Times.

Changing Face

Rich Nadler, CEO of Perseus Development, which runs Web-based marketing research for MSN and MasterCard, said the Internet has made it possible for businesses of every size to conduct meaningful market research. He sees online marketing research as an industry that has only begun to gain a foothold.

"Of all the areas of business that have been changed by the Web, marketing research may have been changed the most," Nadler told the E-Commerce Times. "And there is a lot more to come."