Carlos Ochoa and Ferran Savín

We live in a continuous technological innovation and its benefits are evident in all fields. But innovation involves making numerous changes that complicate the daily management of any company, especially in sectors most exposed to the online world. In fact, the online migration demands greater flexibility and tolerance to the everyday challenges.

Market research is one of those industries highly-exposed to technological innovation. In recent years, the emergence of the Internet has completely transformed the way the consumer is investigated. The obvious advantages of collecting data through online questionnaires versus the traditional face-to-face or telephone surveys have led to the creation of large online-access panels of consumers and professionals, with its consequent reduction of costs and the empowerment of the research methods used.

So far, the highest impact of Internet in research has been focused more on the how rather than on the what. Online surveys enable faster, more simple, flexible and economical ways of capturing consumer opinions. However, the innovation for the upcoming years may suppose not only an evolution of the current methods; it may also lead to a real revolution of the industry, in which completely new research techniques could be widely used.

A new technological element is expected to play a central role in this breakthrough: the Tracker, the key technology to carry out a new type of market research: the online observational research.

The Tracker is a software application that once downloaded and installed on a PC, Smartphone or Tablet of an individual is able to record his digital fingerprint, that is, his online behavior. This technology makes it possible to obtain large volumes of data in real time about what people do on the internet: which websites do they visit, their search-terms, which advertising do they see and when, etc. And all this without having to ask them directly, just by simply observing and recording their online actions.

Implications of using a Tracker
Having a Tracker installed on your device is not the same as answering an online questionnaire: it is more intrusive and costly, and thereby requires the total confidence of the individual under study. For this reason, online panels seem to be the ideal environment to use Trackers. Panels are communities of users that agree to participate in opinion surveys in return for some type of compensation. In this sense, participation is clearly consensual and the already established rewarding mechanism makes it possible to ask the user for a greater collaboration.

Installing Trackers in online panels leads to a new type of data collection method, transforming the nature of the data sources to such an extent that we could define them as observational online panels.

What are the observational panels?
So far, online panels have always been strictly declarative, or what is the same, the panel participants give their opinions by answering questionnaires. In this particular case, the obtained data is delivered by the same individual under investigation. This self-reported way of capturing information is the only possible when it comes to opinions, but is not suitable for measuring behavioral habits. For example, which are the most visited websites, or when and which advertising has been seen.

The Tracker provides a more objective data collection method, since it avoids the biases inevitably associated with traditional surveys, in which the individual himself must self-report his habits.

Why does this technological development revolutionise market research?
In market research, as in many other types of research, the theory of groups plays a vital role. One frequent goal is to classify the participants into various groups, identify similar properties and find applications that allow us to create more complex structures. In market research, this group classification is known as segmentation.

Segmentation is understood as the process of dividing a market into smaller groups with similar needs and characteristics, in order to identify sets of consumers acting the same way and with a particular marketing mix. Effective segmentation is fundamental to optimize marketing strategies, seek new businesses or encourage creativity.

The supply segmentation is relatively simple. In most cases, the products and services available in the market can be defined, quantified and classified more or less directly. For example, we could easily classify home appliances by dividing them in major and small appliances (also known as white and brown appliances). We could keep on classifying the small appliances: TV sets, audio players, camcorders, etc.

But when it comes to consumers, segmentation gets more sophisticated. The conventional variables used for market research purposes, such as simple socio-demographic variables (gender, age and region) or the level of income, are too broad. In fact, using these variables to find niche markets is a simplification of the segmentation problem. Two individuals with identical socio-demographic profiles may have very different attitudes and behaviors; perhaps there are other attitudinal variables that allow us to classify consumers more effectively.

In order to reinforce the market segmentation, other variables collected through questionnaires are often used, like those aiming to identify an individual’s lifestyle, habits, preferences, etc. However, if the data is self-reported, its consistency is lower. Questions like “Are you conservative?”, “Do you like to take risks?” or “Are you happy?” may be answered differently depending on the respondent’s context at the moment of asking.

Fortunately, online observational research opens up new market research possibilities with an enormous potential. This new era places the consumer at the central position of all studies and his behavioral data becomes a key element of any research. Tracking the online consumers’ behavior in an observational and non-declarative way provides a much deeper knowledge about their habits, because the collected data is based on what they do, not what they claim to do.

Understanding and investigating the consumers based on what they claim to be or to do, and especially what they think, will keep being necessary. But it will no longer be enough. We will also need to add their behavior to these analyses. In fact, today we are able to get this behavioral data and try to understand why the actions are taken.

The analysis of the online behavior through observation gives us an invaluable consumer dimension. Each consumer is different and acts uniquely, with his own experiences and background, and that makes it difficult to find two identical consumers. The work of segmenting consumers through their behaviors is essential to establish a new type of research.

Privacy: the biggest challenge of online data collection
The potential of an online observational panel is as unquestionable as the problems associated with this data collection model, especially concerning the privacy of the panel participants.

The collection of navigation data from an individual in a continuous way is a highly intrusive action, as it may probably include intimate information: we usually surf the Internet to transfer money, look for gifts, compare prices, seek job offers, upload photos on social networks, etc. The crucial question that arises is: is it compatible to track all these activities and guarantee the participants’ privacy rights at the same time?

The right to privacy is a fundamental and universally recognized right of individuals that entitles them to have their own space out of the control of third parties. Although today there is an unclear legal framework regarding most of our activities on the Internet, we assume that the navigation data belongs to this type of personal information covered by the law.

Market research companies have progressively started to implement data protection policies and develop strategies on this issue and in order to protect the personal information of their panel participants and strengthen the trust relationship with them. This initiative has always been present in the companies’ roadmaps, but it has also been threatened by the power of collecting digital information and the ease with which sensitive information can be spread on the Internet.

The user is more exposed to Internet than ever, and the sense of fear towards the publication of personal data may reduce his willingness to participate in research projects. In this sense, the recent news on mass media is increasing the sense of mistrust amongst participants. Particularly, those referred to massive espionage cases, either by individuals, companies or governments. Certainly, the recent cyberattacks to governments and companies, and celebrity cases like Edward Snowden’s, the Falciani’s List, or the leakage of CIA classified documents, do not contribute to strengthen this confidence.

Leaving aside the intentioned violations of privacy, the sensitive data that can be captured from people is increasing at the same pace as the development of the information society. Smartphones, Tablets, Apps, etc. are generating large volumes of information (big data) that when properly processed, can produce a disclosure of personal data. Thus, citizens are feeling more and more unprotected and the line between research and direct marketing is becoming increasingly blurred.

Recent studies by the Global Business Network Research show how society concerns about these issues keep growing and there is a real risk that our industry loses its credibility. Therefore, the privacy challenges should not be seen as a mere obstacle to the progress of research, but as an opportunity to gain the participants’ trust by means of a new, more powerful, transparent and honest research.

Carlos Ochoa is R&D Director and Ferran Savín is Product Manager at Netquest