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Online research – what is its future in b2b research?

In a recent article in the Financial Times, Taylor Nelson Sofres, one of the largest market research companies in the world, reminded us about a difference in market research techniques between the US and Europe.

In the U.S. a third of all interviews are now carried out online. Admittedly this statistic is heavily weighted to consumer research which dominates the market research industry. As b2b researchers we have learned to take note of what our consumer cousins are doing because we know that it will ultimately end up on our doorstep. In Europe, as yet, only 3% of interviews are carried out online. Again, this is a statistic heavily weighted to consumer research but it does indicate the huge gulf between the States and Europe.

There can be no doubt that in the future, online research in Europe will catch up. Already, online research accounts for 20% of all the interviews carried out in the UK. It is continental Europe that is lagging.

Inevitably, there is a suspicion about the quality of online research. As b2b researchers we are very aware of the need to be able to qualify and probe responses. Our audiences are potentially so diverse, both in size of company and industry, it is sometimes difficult to make sense of the response without being able to engage in conversation.

It is only fifteen to twenty years ago that there was a huge prejudice against telephone interviews in b2b research, with most clients believing that you can only trust a response if you can see the whites of somebody’s eyes. The greater efficiency of telephone interviews and the quality control that can be imposed upon them, have convinced all but the greatest sceptics that they offer (in most cases) the most viable approach.

So what of online research? What role does it play in b2b research right now and what is its future? In business-to-business research our guess is that online research accounts for less than 5% of all the interviews carried out in Europe. This said, there are some occasions when it provides a better research tool than the telephone or face to face interviews. There are many respondents in businesses that are so difficult to get hold of by telephone, because of their demanding schedules, an e-survey becomes the only viable option.

Response rates to these e- surveys can be appalling low; often less than 5%. However, if there is a strong relationship between the respondent and the subject of research, and if the completion of the questionnaire does not demand too much time, it is possible to push response rates up to 30% and even 40%. At this level they are approaching what we might expect from a telephone survey. Furthermore, the cost of the research and the speed with which the survey can be carried out, knock the telephone into a cocked hat.

Have a look at the article from the Financial Times and see what you think. Join the debate and tell us your own thoughts on how you think online research will develop in business to business markets.

Continental divide stretches TNS

By Carlos Grande, Marketing Correspondent
FT 5th September 2006

Businesses in Europe still prefer face-to-face interviews for market research over faster and cheaper interviews via the internet, according to Taylor Nelson Sofres, the world’s biggest provider of bespoke or “custom” data collection.
In contrast, in the US online market research grew from an estimated 10 per cent to 33 per cent of the total industry between 2000 and 2005, mainly by taking share from mail and telephone-based interviewing.
Competition from internet-based rivals has contributed to declining revenues in the US division of TNS, and led to a profits warning in July that caused TNS shares to fall 15 per cent in one day.
But according to data presented by TNS yesterday, face-to-face remains the dominant research method in Europe and only about 3 per cent of market research is done online, though the UK’s online research figure is about 20 per cent.
David Lowden, chief executive of TNS, said: “The client in Europe wants face to face. Unless attitudes, which have built over years alter, there is unlikely to be a significant change.”
That assessment is at odds with City ratings of internet research companies, which have treated them as businesses that will benefit from a rapid online migration of market research contracts.
Analysts said it was too early to tell whether TNS had called the future direction of the industry correctly, though they took some comfort from a TNS plan to revive its US business, reduce costs and emphasise analytical services.
The restructuring will cost £16m in the current financial year. It is designed to produce gross savings by the end of 2007 of £10m outside the US and a similar figure in North America.
This is before reinvestment spending, and TNS expects to put £4m-£5m of US savings back into hiring new staff and developing new products.
TNS said group operating margin before exceptional items – which was 10.8 per cent in 2005 – could fall by more than 1 per cent for the full year 2006.
The board nevertheless declared a 12 per cent increase in its interim dividend from 1.25p to 1.4p.
Overall, pre-tax profits fell by about 11 per cent from £33.7m to £30m in the six months to June 30 on revenues of £480.5m (£460m).
Earnings per share fell from 4.6p to 3.9p.

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This entry was posted on Friday, September 8th, 2006 at 9:00 am and is filed under B2B News, Market Research. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.