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IQ News: Analysis - Staying in Focus

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Online focus groups are poised to become an integral tool in the market research industry.
Companies that want to sneak a peek into the minds of their customers have long relied on the focus group as a marketing tool. Online focus groups, a recent addition to the Internet marketing field, capitalize on the strengths of the Web to make the process leaner and meaner.
Though this type of research is "still pretty nascent," according to analyst Marissa Gluck of New York-based Jupiter Communications, it has unique characteristics that could make it a significant player in the $5 billion market research industry. "The key thing is that you can dramatically cut the amount of time involved," says Gluck. Traditionally, a focus group is made up of about eight to 15 people gathered in the same room to answer questions and discuss a company's product or service. The discussions and interactions are taped, and transcribing the tapes is a time-consuming process. With online focus groups, the individuals type in their comments themselves, either in a chat-group format or alone at the terminal, making the results available much sooner.
The second key difference is cost. "Often, it's less expensive to do a focus group online," says Gluck. With online focus groups, companies do not have to rent a facility or pay for the participants' meals and transportation.

Focusing On Web Sites
There are currently many companies offering online focus groups; according to Gluck, the most established businesses are Greenfield Online of Wilton, Conn., and NFO Interactive of Toledo, Ohio, both of which have existing practices in the brick-and-mortar world.
A new addition to the scene is Vividence of San Mateo, Calif., a pure play Internet company that launched this February. "They have a great reputation and their name comes up pretty often considering that they are later to market," says Gluck.
Vividence has carved out a special niche for itself, according to Gluck. "They are more geared toward doing focus groups for site performance, rather than Greenfield and NFO, who position themselves as a way to do focus groups for product screening and opinion research," says Gluck.
Vividence's approach is "to measure user intent, track behavior, measure performance and impact, and make recommendations and directions based on these observations," according to Bill Demas, the company's vp of marketing. Vividence has a pool of 130,000 testers who check out sites for the company.

Testers' Choice
Vividence's testers are a good example of the advantages of focus groups in a Web environment. In the offline world, it's difficult to get people to participate in focus groups. For one thing, the participants must invest time and energy in getting to the test site.
But with online groups, this problem is eliminated. The subject can participate while sitting at his or her computer. Also, offline focus groups are limited to people who live in the immediate area, but with online groups, the participants can be from all over the country, even the world.
Vividence's Demas says his online testers generally receive only token compensation, unlike offline focus group participants, who often get paid $50 and up and are supplied with refreshments while the group is meeting.
Demas says, "We give our testers their choice of $15 Amazon gift certificates, $15 prizes from other companies or the option of donating their prize to charity. Also, all testers are entered into the $3,000 monthly sweepstakes." Demas claims, "Most of our testers would do it for free. We've gotten this feedback over and over."
Because the company's tester pool is so large, it's possible for clients to pick and choose a wide range of demographics and psychographics--"women over 50 who live in the Midwest, like hockey and use credit cards more than twice a month? No problem," says Demas.

Task-ORiented Sampling
Once a random sample of testers has been chosen, they are unleashed on the site, with instructions to perform a specific task using Vividence's special browser.
"For example, if we were doing a study for drugstore.com (an actual client), we might assign our subjects the task of purchasing a large-size bottle of ibuprofen. Then, we would record what they did in an attempt to accomplish the task. How did they try to do it? Were they able to navigate successfully? Did they get lost? At any point in the process, they can post a comment, such as 'This link didn't go where I wanted it to,' or whatever they wish. We go all the way up to the purchase point and then stop," Demas says.
Demas adds, "Offline focus groups usually involve about eight people. Our groups are 200 people, a number from which you can get a meaningful statistical sample. With only eight people, you can't reliably generalize to the larger population."
Because the participants answer the questions in the privacy of their own homes, Demas believes the responses are less likely to be affected by elements such as a dominating group member, a desire to please or a moderator with hidden biases. Also, the responses are anonymous; testers are identified only by a number.

Tracking The Tester
Following a demonstration of the process (based on a real-life focus group survey conducted at the sites of Furniture.com and its rival Living.com), Demas points to a snazzy graphic that somewhat resembles a superhighway seen from an airplane. "We can track what course every tester, or every tester from a specific demographic, took from the minute they entered the site. We can show where they took a wrong turn, if they did, and figure out why by using tools such as the comment book.
"The comment book contains every tester's observations. You can get the demographics for every individual tester who made a comment, plus a slew of other details," says Demas. Each tester's comments generally take up an entire page.
Looking through the Furniture.com report, Demas singles out one tester who was unable to complete the assigned task. In answer to the question, "Would you be likely to return to Furniture.com?" however, her answer was "Yes." Pursuing the seeming contradiction, Demas accesses the woman's comments, which include, "Furniture.com has really cute stuff." So, Demas says, "Furniture.com came out ahead with their product selection even if the task wasn't completed."

Making Recommendations
The next step, Demas says, is recommendations and direction from the company's team of consultants and usability experts. (Seems likely that a recommendation to improve site navigability and play up the appealing products would be appropriate in this case!)
"We'll make five or six recommendations and our clients typically will follow the recommendations and then test them. This usually makes for long-term relationships," Demas says. When the company launched in February, it had 20 customers; the client list, including Microsoft, Excite@Home, Compaq, AltaVista and Nordstrom, is now up to 90.
Another use of this process, Demas comments, is "before and after" testing for site redesigns. "That way, you can avoid costly mistakes through pretesting. That's what we did for our own site redesign." The Vividence redesign, based on its own feedback system, will launch in mid-August.

Pros and Cons Online
While online focus groups have many advantages, Demas admits that offline groups have their good points, too. "The moderator can probe more deeply and ask further questions." In addition, according to Jeff Hohner, director of SurveySite, a Toronto-based online market research company, "You can't see facial expressions or body language" in online focus groups. Another drawback for companies such as SurveySite, Greenfield and NFO Interactive, which run groups on products such as food: they must mail these products to their subjects in advance.
Overall, though, online focus groups do have advantages for
e-merchants. Though Vividence declined to release figures on its fees, a Jupiter Communications report released in March 2000 supports Demas' assertions that online focus groups save time and money. According to the survey, online focus group testing reports took three days to one week, as opposed to two to three weeks for offline focus groups. The offline groups cost $10,000 to $20,000 and the online groups cost $7,500 to $10,000. (The sample companies in the survey were Greenfield Online, NFO Interactive and Talk City.)
According to Jupiter's Gluck, Vividence is "effective at what they do." She predicts that other companies will be entering the niche currently occupied by Vividence, "or they'll try to acquire them [Vividence]." In fact, Gluck says, "They're a great acquisition target--they might be an acquisition target to someone like us."