HDTV 2004: Exploring Advertising Effectiveness and Debunking Consumer Confusion
Are HD commercials more effective than standard programming ads? If this is the case, broadcasters could levy a premium for placing them, improving the possibility of a positive ROI on the transition to digital.
And what about consumer confusion? Given the myriad of choices available for HDTV sets and set-ups, industry insiders have begun to wonder if consumers are holding back on their purchases. Although the adoption curve gives no signs of consumer hesitation, the impending digital deadline leaves many observers asking if the adoption rate for HDTV is happening fast enough. Is this market in control or is the industry facing a confusion conundrum?
These are the questions and issues analyzed and answered in HDTV 2004: Exploring Advertising Effectiveness and Debunking Consumer Confusion, a new study conducted by eBrain Market Research.
The survey results, based on a national telephone survey, expectedly reflect a general aversion toward TV commercials among consumers. But the findings also demonstrated a core group of HD viewers believe high definition ads are more entertaining. Advertisers take note; this group also holds a more positive image of companies who advertise in HD. Another salient message is HDTV owners overall are more likely to buy CE products from companies who use the latest technology. And high definition commercials can be highly suggestive of this valued characteristic.
According to the survey results, half of consumers indicated they plan to purchase a HD-capable unit the next time they purchase a TV, but 25 percent said they had ruled out buying a HDTV for now, with confusion and price surfacing as the stumbling blocks.
The study suggests consumer confusion is fairly contained and largely stems from a lack of research and failure to price the options. But when consumers are ready to investigate HDTV, most look to friends and family, manufacturer web-sites and retail sales reps, with somewhat limited success.
We may never completely dispel consumers' problems with price. But we can and should address the consumer's need for accurate information regarding HDTV.
Manufacturers and retailers must work together to ensure both of these critical sources are up-to-date and accurate. Also, information conveyed about HDTV should be easily digestible with technical jargon used only where appropriate.
This study is available free to members of the Consumer Electronics Association and can be purchased by non-members online at www.eBrain.org
Effective Summer Planning Now Helps Maximize Profits This Winter Holiday Season
Given the time-frame necessary to effectively plan product inventory, channel distribution, and advertising strategies for optimal sales during the holiday season, summer is the ideal time to expend the effort to better understand current and prospective customer needs, perceptions, and behaviors. Towards this objective, brand awareness and perception studies are a powerful tool companies can use to understand the needs of various customer market segments. Additionally, companies can evaluate the market's perception of meeting those needs, and can effectively address now to improve profitability during the important holiday shopping season.
Through brand awareness and perception studies, overall market, company-specific, and competitor factors can be assessed. Important questions that can be answered include:
- various consumer groups' awareness of a company's brand name & products
- how positively a company's brands are perceived by relevant target markets
- the holiday shopping purchase intentions of consumers for a company's products
The results can be benchmarked against competitors and the overall market to determine relative strengths and weaknesses, which can then be addressed.
As an example: without accurate purchase intention data for the holidays, a company could either be caught with insufficient inventory to meet demand, resulting in lost sales, or build up excessive inventory, resulting in unnecessary costs. However, with proper research ahead of time a company can more accurately assess demand, plan inventory levels accordingly, and maximize profits.
Often, the most effective way to obtain the highest quality information is to combine qualitative and quantitative research methodologies. Using online focus groups (qualitative), such as eBrain Market Research's online focus groups, powered by Imprint, can help a company understand what factors consumers consider important in their holiday shopping decisions. This should be followed up with an online survey (quantitative) to measure the relevant factors uncovered in the focus groups within specific target markets or the general consumer market.
July and August are prime months for conducting online research geared to the upcoming holiday shopping season. One of the benefits of using online research tools in a case such as this is timing. An online focus group or survey generally takes considerably less time to field and analyze than traditional focus groups and in-person, mail, or phone surveys. An online focus group can usually be assembled and completed within 3 weeks. Similarly, an online survey can usually be fielded and completed within 4 weeks.
These time savings can be beneficial in helping a company acquire more accurate market information. Since online research can be conducted closer to an event - such as the holiday shopping season - the data captures the most current consumer sentiment and intentions. The timing is close enough to the event to provide accurate market data and generally sufficient for making adjustments to product marketing, distribution, and inventories in time to maximize the effectiveness a company's holiday sales efforts.
If you would like to know more about online research methodologies and how they can be used to help with holiday planning, contact eBrain Market Research, an expert in applying online research methodologies to individual client needs.
News You Can Use
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The Customer Data You Collect Impacts Your Customer Survey Effectiveness
While companies often turn to customer surveys to find out more about their customers, the kinds of customer data they have collected in the past can have a tremendous impact on whether their surveys are truly effective. Quite simply, having better customer data going into a survey results in more accurate information coming out. Understanding what customer data is collected, should be collected, and why are vital in this regard. But what does better customer data mean? What kinds of customer data should you ensure you have before considering fielding a survey and why?
eBrain has assembled a quick reference list of items for you to consider and why - so the next time someone says, "let's do a customer survey," your chances of getting meaningful results will be dramatically improved.
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| Customer Data Items to Consider | Why It's Important? |
| Number of customer names? | More names can positively influence the survey response rate. |
| How current are the customer name lists? | More current data increases likelihood of accurate contact information.
More recent customer interaction with the company increases the likelihood of them completing a survey. |
| Source(s) of customer names? | Where the names came from (e.g. service calls, product registration, online sales) provides insight into customer behaviors that can be useful in creating, targeting, and fielding a survey. |
| Types of customer data collected?(e.g. address, phone, email, other demographics) | Since the goal is to permit 100% of customers to respond if possible, it is important to ensure that enough customer names have the necessary contact info (e.g. email addresses for email surveys) for the preferred survey methodology. If not, other survey methodologies, consistent with the collected data, should be considered. |
| Are customer names representative of the entire customer base? | A good representative sample requires names from the entire customer base. If the name list comes from only a sub-segment of customers (e.g. online purchasers), then survey results may not be indicative of the "typical" customer. |
| How recently was the name list surveyed? | While periodically surveying customers can help engage them, over-surveying them can be detrimental. As a general rule, unless they have agreed to more, customers should not be surveyed more than twice a year. |
| Do you have permission to survey the customer names? | In general, if it's your customer list, you have the right to survey them about their interactions with your company. However, in your correspondence you should remind them of your relationship to reduce the likelihood they will consider it unsolicited. |
| Helpful Hint: If you have customer names from a variety of sources, covering various products, use a matrix list or database to keep sources organized for future survey planning. |
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Best Practices in Online Research
Online surveys have been around for some time. Even though not all companies are using them, enough research has been done online to establish some clear Best Practices. The old saying "garbage in, garbage out" will always apply to research, regardless of the medium. Thus, here are a few things, though not all, eBrain has learned that should help you get your money's worth when doing online research.
Establish your objectives clearly before you do anything else.
This is really nothing new. You should do this regardless of your methodology. In fact, you need to do this in order to ensure you are using the appropriate methodology. There are many surveys that should not be done online, such as when your email list only contains 25% of the population you want to research. Thus, clearly establish what you want to get out of survey research before calling up your vendor.
Online is generally cheaper, but not always faster.
Because you pay by the minute for a phone survey, and by the amount of paper, data entry, and postage for mail surveys, online surveys are generally cheaper to obtain the same data (pound for pound, as it were). In addition, when you have the email address you can ask as many questions as you want (within limits). There is no incremental charge when you want to add questions, unlike a telephone or paper based survey.
But don't be fooled into thinking that online is always faster. Online surveys are always faster than a mail survey, but they are not always faster than a telephone survey. You must leave an online survey in the field for at least one week, and you must send out a reminder 2 or 3 days following the initial invite. To do otherwise would be to compromise the integrity of your data collection.
Online population means online.
We have run into too many people who are weighting their online results to national population demographics and then treating the results as representative of the entire US population. DO NOT MAKE THIS MISTAKE. Regardless of what anyone tells you, online means online. There are certain factors that distinguish people who are online from those who are not. These factors are not overcome simply by making the demographics look like the national population. Until the Internet has penetrated over 90% of US households, the best you can (and should do) is weight your results to the online population demographics (as determined via a telephone survey of Internet households).
Make sure you carefully evaluate the source of your online sample.
Things to ensure: 1) The online sample should be compiled through a double opt-in method. This ensures you have the permission to send emails to potential respondents. If you are not careful about this, you may be reported to ISPs as SPAM and your domain will be shut down. 2) Make sure that the sample is acquired through a variety of ways. This must include phone recruits as well as online recruits. 3) Make sure you are not getting professional respondents. Most sample comes from panels, and unless the sample provider has strict safeguards, you may end up with many respondents who take surveys once or more per week.
Properly word questions.
This is pretty simple. Remember that your respondents will be reading this survey. So, use the correct language. Don't say things like, "Please tell me…." There is no "me" in an online survey. Instead say, "Please indicate…" Also, don't make questions too complicated. Just because you are online doesn't mean everyone has a Ph.D. Keep it simple or run the risk of bad data.
Resist the urge to use too many colors in programming.
I have seen many, many surveys that overload the respondent with colors on the page. Don't do this. You need to make an online survey as pleasing to take as possible. Use lots of white space. Use color in logos for a professional look. Use pictures and graphics when needed by a question. And use color, such as red, to highlight key words or instructions. As is the case with mail surveys, a nice looking online survey will get a higher response rate than an ugly one.
Keep the time required for completing a survey to no more than 15 minutes for consumers and 5-8 minutes for business professionals.
Because you always want to get as much research as possible for your money, questionnaires tend to grow in length the more you think about a topic. However, if you make an online survey too long, people will drop out of the survey and decrease the validity of the results later in the questionnaire. A typical, and acceptable, drop-out rate is 10%. Anything higher is a clear sign that something was wrong with your survey. (You can analyze the drop out patterns to see if it was a particular question(s), or if your survey was simply too long). In any event, a survey that is too long is a waste of money and an irritant to the respondents.
Don't require respondents to answer all questions.
There is still debate among some researchers about this, but eBrain strongly believes that it is better to allow people to skip questions than to force an answer. One reason is that regardless of how good you are at wording questions, some people will either not understand the question or will feel it does not apply to them. In these cases, if you do not allow them to skip the question, they will likely drop out of the survey, or provide you with an answer that is not accurate. Either way, they will be irritated, which is never good. Another reason is that your drop out rate will increase dramatically if you force respondents to answer a question they feel they cannot. One recent study we analyzed showed that by allowing people to skip questions, the highest "no answer rate" for any individual question was 4%. However, if every individual who skipped a question was forced to answer it and dropped out, the drop out rate would have doubled from 10% to 20%. It is far better and more statistically sound to have a no answer rate of 1%-4% than to put full faith into questions at the end of a survey when 20% of respondents have dropped out.
Developments and Trends in Internet Usage: Online Consumers
A common misperception is that American Internet users are not truly representative of the U.S. population. While significant bias did exist in the Internet's early years, as the Internet has grown and evolved, online user demographics have begun to more closely mirror the general U.S. population. In fact, according to the February 2004 Nielsen//NetRatings report, 204.3 million Americans (75%) now have home access to the Internet. In its most recent report in 2003, The Pew Internet & American Life Project, which has been tracking American Internet user demographics for the past several years, reported that online demographics in the U.S. have become very similar to the offline environment in many respects.
Gender and Ethnicity
According to the Pew report, online gender and ethnicity demographics have become very similar to that of the general U.S. population. Given the report's 2% margin of error, American online user gender demographics are now equivalent to the general U.S. population. In the case of ethnicity, among the three largest groups in America, only Blacks are slightly less represented than in the general U.S. population.
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| Internet Users | U.S. Population |
| Men | 50% | 48% |
| Women | 50% | 52% |
| Whites | 77% | 75% |
| Blacks | 8% | 11% |
| Hispanics | 9% | 10% |
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Age, Education and Income
According to the Pew report, analysis of age groups online indicates that online users are slightly younger than the general U.S. population. More noticeable demographic differences exist concerning household income and level of education. Specifically, online users in the U.S. tend to have higher incomes and be more highly educated than the total U.S. population.
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| Internet Users | U.S. Population |
| 18-29 | 29% | 23% |
| 30-49 | 47% | 42% |
| 50-64 | 18% | 20% |
| 65+ | 4% | 15% |
| Less than $30,000 household income | 18% | 28% |
| $30,000 - $49,999 household income | 23% | 35% |
| $50,000 - $75,000 household income | 18% | 14% |
| More than $75,00 household income | 26% | 18% |
| Did not complete high school | 5% | 14% |
| High school grad | 23% | 35% |
| Some college | 34% | 25% |
| College or graduate school degree | 37% | 26% |
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Home Broadband Access
A consumer survey of U.S. adults conducted by eBrain Market Research in 2004 illustrates that out of the 75% who have home access to the Internet, 53% are now accessing it through some form of broadband connection at home. The 2004 eBrain consumer survey shows that 55% of men and 50% of women now have home-based broadband access to the Internet.
Shopping Habits
According to the February 2003 UCLA Internet Report, by the end of 2002, 39.7% of online adults in the U.S. were making an average of 28.32 online purchases per year and spending an average of $101 per month. In addition, the UCLA report found that 70.9% of online shoppers occasionally or frequently researched products online and then made purchases at offline locations. The growing impact of the Internet on consumer purchase behavior is evidenced by the fact that, according to the U.S. Census Bureau, for the 2003 holiday season, online sales grew 25.1% to $17.2 billion in comparison to only a 6.2% growth in overall U.S. retail sales. Moreover, for all of 2003, online sales grew 26.3% to $54.9 billion in comparison to only a 5.4% growth in overall U.S. retail sales.
The Future of Online Sales & Research
Analysts forecast that the impact of online sales will continue to grow for the foreseeable future. Jupiter Research expects online retail sales in the U.S. to reach $65 billion in 2004 and continue to grow at an annual compounded rate of 17% through 2008. And, while Jupiter expects direct online sales in the U.S. to be only 5% of total retail sales, it anticipates that by 2008 "nearly 30% of offline retail purchases will be influenced by research performed online."
These trends have not been lost on companies' approach to their market research either. While market research spending overall has been flat in the U.S, according to Inside Research, online market research, which now represents 25% of market research spending in the U.S, grew by 24% in 2003 and is expected to grow an additional 18% in 2004. Of this, 79% represents B2C research with the remainder dedicated to B2B research. According to Inside Research, the top areas of online market research spending are:
- Concept/product testing - 35%
- Sales tracking - 22%
- Ad/brand tracking - 10%
- Product awareness and usage - 10%
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eBrain Events and Announcements
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Recent and Upcoming Speaking Engagements
Joe Bates, eBrain's Research Director, recently spoke on "Leading Edge Issues in Online Research" at the Marketing Research Association's 46th Annual Conference. View his presentation
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