Online Consumers: Beyond Fiction to Fact Distilling Reality from the Hype

Background

The transformation of the research industry is a direct result of the astounding technological advances impacting all facets of business and society today. At the root of this myriad of change is the day-to-day impact on people, the very people who are our consumers and our respondents. This paper will examine the Internet's impact on consumers, both attitudinally and behaviorally, with particular emphasis on those facets directly related to the research industry's quest to gather sound, viable consumer inputs via this burgeoning medium.

Utilizing direct consumer input, this paper will provide insights into the true effect of the Internet on consumers' lives. The study will get to the heart of consumers' feelings regarding technology, privacy and the Internet, focusing on the difference between perception and reality. Conclusions will be presented on how to gain access to, communicate effectively with and engage longitudinally with consumers.


Introduction

As the Internet continues its technological impact on business and society at a macro level, we will examine in this paper the actual day-to-day behavioral and attitudinal impact of this new medium on the individual consumer and gain insights on how to best acquire and retain these consumers to fulfill our needs as researchers. The media hype has led us to believe that the Internet will continue its significant impact for some time to come without let-up. This paper will address whether consumers actually feel this significant impact in their daily lives today, as well as into the future. The data upon which these insights are based comes from online surveys conducted by Market Facts Interactive.

Specifically, we will examine the following issues and how they relate to the future of online research :

  1. The role of the internet in today's society and its impact on online research

    • Will the Internet 'play in Peoria'? In other words, how 'mainstream' has it or will it become?
    • To what degree have consumers embraced the Internet? Is it a necessary evil, an essential everyday tool or just fun entertainment?
    • How many consumers consider the Internet their preferred way to hear from marketers?
    • How does the consumer view of the Internet guide us in online research activities?

  2. Respondent View of Online Surveys and the Impact on the Research Process

    • How do respondents feel about the frequency and length of online surveys received?
    • Do respondents still enjoy online surveys or are they getting 'burned out'?
    • What kind of incentive presents the greatest motivation to participate in online surveys?
    • How does the consumer view of the Internet guide us in online research activities?

  3. Consumer View of Privacy Issues Online and Its Impact on Our Research Accroach

    • What are the key concerns held by consumers regarding privacy and security on the Internet?
    • Are consumers aware of and do they read privacy statements? Do these statements make a difference?
    • How do consumers feel about imposing legislation or guidelines to ensure privacy?
    • What impact do privacy concerns have on online research?


FINDINGS


Methodology

Unless otherwise noted, all findings in this paper originate from online surveys conducted by Market Facts Interactive during the past year. The sample source for these studies is the Market Facts Interactive Consumer Opinion Panel, a household based panel consisting of nearly a million individuals. The panel was recruited via a double opt-in process to ensure willingness to participate and mitigate any possibility of spamming. It is maintained with diligent adherence to strict processes and procedures to guarantee research integrity and to encourage panelists' participation over time.

Specifically, we have gathered data from (1) panelist update surveys conducted across our entire panel in 2000, (2) a Parallel Product Test Study conducted in 2000 and (3) two eNation studies conducted in February 2001 and July 2001 among a nationally representative sample of consumers.

  1. The Role of the Internet on Society and its Impact on Online Research

    2. Will the Internet 'Play in Peoria': Consumer Internet Population and Capabilities
    Not only is the Internet 'playing in Peoria' but it is also becoming more mainstream among the very segments that were slow to embrace it. The early adopters of the Internet were young, upscale males but this has clearly broadened. Based on The Pew Internet & American Life Project results in ' More Online, Doing More ' released in February 2001, there was a notable increase in Internet penetration among key groups in November-December 2000 compared to six months earlier (May-June 2000). These groups include women (penetration up 9 points to 54%), African Americans (up 8 points to 43%), households with $30K to $50K incomes (up 14 points to 64%) and 50-64 year olds (up 10 points to 51%).

    Dovetailing with the Pew Internet & American Life Project finding that Internet penetration has increased among the 50-64 age group, a Market Facts online study revealed this group has noticeably increased its shopping, research/ education and correspondence activity online compared with the average online consumer. This is just one example of a formerly non-mainstream group embracing the Internet. However, established mainstream groups are not abandoning the Internet as the $75,000+ income group has also significantly increased its online shopping, travel and personal business activity compared with the average online consumer.

    One very welcome research implication that can be drawn is that as the Internet continues to become embraced by the more mainstream segments, our research sample pool will increasingly mirror the general population. However, while we expect Internet penetration to increase among lower-income households and the 65+-age segment, these targets will continue to present a challenge to marketers conducting online research, as they do in offline methodologies as well.

    Consumers on the Internet have now become fairly experienced users. Only 10% have been on the Internet for less than a year while 43% have been Internet users for 4 or more years. Additionally, respondents are spending a lot of time on the Internet. Excluding email, 41% of respondents are on the Internet more than two hours a day and almost 15% are online more than 4 hours daily. This level of activity suggests the Internet could be losing some of its novelty and will be used more as a tool for everyday tasks.

    Given the recent increase in usage, it is not surprising that respondents plan to obtain faster Internet access. Online survey results revealed that nearly one-quarter (23%) report having high-speed Internet access, with 30% 'very or somewhat likely' to get an upgrade in the next 12 months. However, 29% are not at all likely to upgrade their access. Today, online studies are geared to the 'lowest common denominator' for computer equipment and speed of Internet access. These results indicate that within two years we can anticipate that up to 40% of respondents will have broadband access. This will allow us to leverage the online environment by extending the visual stimuli used for online research, a powerful enhancement to the capabilities generally available to us today.

    Looking further at consumers' intent for the future, most consumers do not anticipate a major change in their overall online activity. About 63% of consumers believe their Internet usage will remain about the same in the next 12 months. About one-quarter of consumers believe they will use the Internet 'somewhat more' while only 12% of respondents believe they will use the Internet 'much more.' Given that consumers intend to maintain or increase their Internet usage, we, as researchers, will continue to have a viable sample pool as long as we maintain appropriate interaction and refrain from abusive research practices.

    The bottom line is the Internet not only 'plays in Peoria' but also is assuming an increasingly important role in consumers' lives as they gain more experience, incorporate it into their daily lives and look to get faster access. This offers more opportunities for researchers to access a larger, more diverse respondent group who is savvier on the Internet and has the necessary high-speed access to receive expanding visual stimuli. Additionally, as researchers, we will be able to focus on the next phase of creative and unique research options that can only be leveraged within the dynamic and flexible online environment such as sophisticated conjoint and copy testing analyses.


    Is There life Beyond Email and How Do Online Surveys Fit In?

    While email remains the predominant activity on the Internet, other more task-oriented activities are gaining momentum. Emails account for the lion's share of online activity (44%). Other tasks sharing the Internet limelight include research/education 14%, entertainment 10%, shopping 7%, news/business 6%, online surveys 6%, personal business (such as banking) 3%, chat rooms 3%, job search 2%, travel 2% and other 3%.

    See Figure 1.



    Dramatic increases for key Internet activities have been reported over the past year. Online correspondence has increased 58%, research/education 45%, news/entertainment 40%, shopping 38%, personal business 31% and travel arrangements 24%.

    There appears to be room for online surveys in consumers' lives, as they already account for 6% of Internet time among those who agree to participate, equivalent to shopping and news / business activities. With consumers currently willing to contribute their time to research, we need to be cognizant of our responsibility as marketers to provide an enjoyable environment for respondents by keeping surveys short and interesting and ensuring that we do not 'overuse and abuse' this valuable resource.


    Does online shopping frustrate consumers and what can we learn?

    Shopping is an important online activity. On average, it accounts for 7% of online time and more than three-quarters of respondents made an online purchase in the past 12 months. Attitudinally, 61% agree that the Internet allows more convenience and freedom in shopping.

    The average shopper purchased a product or service online 7.6 times in the past year. About 60% of respondents made an online purchase one to 10 times in the past year: 41% purchased online one to five times and 18% six to 10 times. An enthusiastic 8% make purchases more than 20 times a year.

    One of the most important questions raised and researched by eMarketers is 'why do consumers abandon filled shopping carts at such an alarming rate'? Are online consumers getting frustrated with the shopping process? A Market Facts Interactive online study conducted July 2001 revealed that 58% of shoppers report they abandoned an online shopping cart containing at least one item in the past 12 months.

    The lead reason given (57% of respondents) for abandoning the shopping cart is that the shopper had to get this far to find out the total charges for the item, including shipping charges and taxes. Also, 28% mentioned they had to get this far to learn delivery options and timing. Therefore, by not providing this information up front, online shoppers are required to fill their cart and then abandon it once they get the required information. The assumption may be that consumers will complete their purchase once they get this far but apparently this is quite often not the case.

    Additional key reasons include 'changed my mind' (47'%) and 'was primarily comparison shopping' (35%). Others grew weary struggling with the web site: 20% said site was too slow and 11% said site was too difficult to use. Another segment decided to purchase elsewhere: 18% offline and 10% at a different web site. Finally, 19% report they didn't have time to complete their purchase.

    See Figure 2.



    Opinions regarding the overall shopping arena show that the online environment is becoming a welcome shopping option for many consumers, although it is more often an additional venue rather than a complete substitute for offline options. Roughly half of consumers prefer having a 'bricks or clicks' option. 50% prefer to purchase from offline retailers who provide online shopping options. 42% agree that customer service online is faster than offline and 45% agree customer service is more convenient online than offline. Approximately 40% of respondents were neutral regarding these three shopping attitudes. Notably, two-thirds of respondents agree they can usually get more information about products and services online than offline, supporting the Internet as a powerful shopping information resource.

    Based on these results, we could hypothesize that while consumers are adding and/or substituting online shopping to their offline purchasing habits, some are feeling a level of frustration with the online shopping process. Similar to online surveys, if consumers feel their online shopping experience was more work than anticipated (particularly if they thought it would be convenient and fun), they might reduce their activity or not return at all. Thus we can extend these conclusions to make the assumption that when conducting online surveys one must be respectful of respondents' time and to tell them up front what to expect (particularly survey length) and then deliver on that expectation.


    Don't Call Me, I'll Call You: Bodes Well for Continued Online Research

    While the majority of respondents cited 'mail' as the preferred means of being contacted by a company providing information regarding products or services, the Internet dramatically outperformed the phone. 61% of respondents prefer contact by mail while 35% of respondents prefer to be contacted via the Internet and only 4% prefer telephone contact. This finding highlights the challenges facing telephone interviewing, but with at least one-third of the population citing the Internet as the preferred contact source, this bodes well for the future success of online surveys.

    Looking at the inverse of the previous measure, 89% of respondents cite the telephone as their least preferred source of contact from marketers, while only 5% report the Internet as their least preferred source. This finding supports the advantage of online research (unlike telephone surveys) that provides respondents more control over the process as they can choose if and when they want to participate in online surveys.


    How do consumers view the Internet: The Good, The Bad and The Ugly

    Consumers are positive yet realistic about the Internet. First, they acknowledge the technological achievement and significance of the Internet: 70% of respondents agree the Internet is the 'greatest technological invention in my lifetime' with fully 87% agreeing that the Internet has impacted their lives significantly and will continue its significant impact.

    Secondly, they agree that the internet has contributed to their daily lives in several ways, with a majority (60%) agreeing it improved their quality of life. Specifically, respondents report the Internet 'enables me to maintain communication ties with friends and family' (84% agree), provides convenience in conducting everyday business such as banking, bill paying, financial management (56% agree) and is an everyday tool in managing their daily lives, like the phone or cell phone (55% agree).

    See Figure 3



    Two-thirds of respondents agree that the Internet will have a very (23%) or moderately (44%) significant impact on their daily lives over the next 12 months. Finally, 84% agree the Internet is always or usually a timesaver.

    Do consumers see the potential drawbacks of the Internet? 52% agree the Internet 'contributes to a loss of personalized customer service and human connection' and 41% claim the Internet is a technology that has 'gained too much control in our daily lives.' Only 27% agree they are 'overloaded' by the daily information on and about the Internet.

    However, the bottom line is that 81% of respondents agree that the benefits and potential of the Internet outweigh its drawbacks and potential problems. Not surprisingly, males, consumers aged 25-34 and upscale income and education groups revealed above-average agreement with this statement.

    Thus we can conclude that while consumers may still be somewhat enchanted with the power of the Internet, they are also realistic about how it might impact personalized customer service and the human connection. They worry somewhat about the Internet taking too much control but they do not feel overwhelmed by its impact. These attitudes do not indicate a barrier to Internet research and, in fact, reflect the Internet as an accepted and open environment for approaching respondents and conducting research.


  2. Respondent view of Online Surveys and the impact on the research process

    3. How do respondents feel about Online Surveys and how do we treat them?

    In recent parallel product test research, respondents were favorable about their Internet survey experience, agreeing that they enjoyed the online experience, would like to participate again and found it easy. More than one-third participated in past product evaluation studies via a traditional medium and almost all (99%) stated they preferred the Internet survey to telephone, mail and in-person mall studies for product tests.

    More than three-quarters of respondents rated the study as 'enjoyable; with at least 39% reporting 'extremely enjoyable.' Similar to other research methodologies, Internet study participants report that their greatest enjoyment derived from evaluating new products and making a difference in product marketing. Almost 90% of Internet respondents said the study completion was easy, with approximately 70% stating it was 'extremely easy.'

    A methodological note: Respondents in this study were members of the Market Facts Interactive Consumer Opinion Panel. The conclusions that follow might not be similar for respondents recruited from other sample sources, as MFi carefully monitors the frequency of contact and the length/design of questionnaires. If these precautions were not taken, online respondents would, no doubt, feel differently regarding the frequency of contact and length of questionnaires.

    Apparently, most respondents do not feel overwhelmed by the number of survey invitations they receive. 79% feel the frequency is 'just about right'. An enthusiastic 13% would like to receive surveys more frequently. Only 8% of respondents feel they are contacted too frequently to participate in online surveys. Males, households with $50,000+ incomes and 18-24 year olds were the main segments that expressed above-average agreement about being contacted too frequently. This is not surprising given that these segments have historically been difficult to garner participation from via any medium. See Figure 4.

    See Figure 4



    Are respondents enduring online surveys that are too lengthy? While only 6% report that their online surveys were 'usually too long', 45% said they were 'sometimes too long.' This means that at least some of the time, respondents feel that their surveys are too lengthy. This finding coincides with our knowledge of the online environment in general. The Internet is a reflection of today's hurried lifestyles---It is typically used in short spurts. People do not tend to linger at web sites, rather they come in, do what they need to do, and move on. Thus, as researchers, we need to recognize this behavioral tendency and work with the environment, not against it: this means keep surveys short.

    Our research further revealed that when you ask respondents for the length of a survey they just took, they consistently under-report the number of minutes. Consequently, if 45% of respondents feel that surveys are sometimes too long, they might actually be even longer than respondents realize. Leveraging the online environment to make surveys easy and interesting (via creative question design and the use of graphics) may contribute to respondents' positive perspective on the length of surveys. There is further good news in that 48% believe their surveys are usually just about the right length.

    See Figure 5.



    When asked what they like about online surveys, 71% of respondents agree that they enjoy being part of a community who takes these kinds of surveys. From this, we can conclude the need to help to foster these feelings by providing ongoing communication, superior support for questions and problems and incentives that complement this community feeling. Nearly half (46%) enjoy the graphics that are part of online surveys, affording us the opportunity to leverage this capability in surveys to keep respondents interested. Only 28% enjoy seeing the pop-up boxes online, indicating that this kind of unsolicited input is intrusive and unwanted.


    What motivates online respondents and how should we respond?

    When respondents were asked what would motivate them to take an online survey, cash is king, with agreement from 80% of respondents. Cash holds an even greater appeal among the younger segments, particularly those aged 18 to 34 who expressed an 88% level of agreement compared with 69% for the 55 to 64 segment and 60% for 65+ group.

    However, there are other motivators for participation beyond cash. As with other types of research, respondents like making a difference and just plain enjoy the process. Participants are motivated by the 'knowledge that I've made a difference in products/ services offered' (63%), the 'fun and enjoyment of expressing my opinion' (54%) and 'seeing results of the surveys I have taken' (40%). Females and older segments are more motivated by these elements, with 61% of women and 64% of 55+ age segment mentioning 'fun and enjoyment of expressing opinion' compared with an average 54%.

    Other motivating factors include tangibles such as points or dollars that can be used to purchase goods or services (57%); discount coupons on goods and services (49%); enrollment in drawings or sweepstakes (48%); and airline miles that can be used for travel (30%).

    See Figure 6.



    When asked for the single most motivating incentive, cash was the clear winner, selected by 59% of respondents. The other incentives pale in comparison with the next most motivating incentive being 'knowledge that I've made a difference in products and services offered' reported by 14% of respondents and 'the fun and enjoyment of expressing my opinion' mentioned by 9%.

    So how do we properly compensate respondents? Do these results suggest we heavily compensate respondents with cash? Not necessarily, particularly if you do not want to create a panel of professional respondents whose primary motivation is to get paid for their opinions. Considering that the majority of respondents enjoy being part of the online survey community, it may be more reinforcing to encourage this association by sharing survey results and creating newsletters in concert with cash, points, coupons or drawings (when feasible, based on design and cost of a study).

    Cash is clearly a proper motivator when the surveys are longer and complicated or if you are recruiting a hard-to-reach segment. Additionally, it is important to match incentives with the preferences of the segment. Cash seems to be a stronger motivator among younger segments, while older segments and women enjoy the process and making a difference. However, participation in the online research process is a marathon not a sprint so the question becomes 'what incentives are most likely to generate the greatest longevity among this precious resource?'

    In a 2000 online study conducted by Market Facts, we learned that periodic small gifts can actually be more motivating than money over time. This suggests a mix of incentives that shows the proper degree of appreciation and places an occasional tangible (such as a small gift. points for goods and discount coupons) into the hands of respondents could keep the compensation offerings fresh to respondents and complement any cash offerings. The other essential component in this compensation mix is ongoing communication that reinforces the spirit of the respondent community.


  3. Consumer view of privacy issues online and Its impact on our research approach

    4. How often do consumers get 'Spammed' and what do they do about it?

    About three-quarters of consumers are concerned about receiving unsolicited emails, or 'spamming'. Spamming is an everyday reality as 72% of respondents report receiving unsolicited emails daily, while another 17% receive them 'every couple of days.'

    What are the attitudes and behaviors of those consumers who get 'spammed?' Behaviorally, more than half (57%) always delete unopened emails from sources they do not recognize. Only 28% of respondents always or often open the email and inform the sender they do not want to receive these emails in the future. This is likely driven by concern for inviting viruses by opening email from unknown sources. Here again, a community built for longitudinal contact with respondents can assure that consumers open email survey invitations, as the email will come from the same, well-recognized source each time.

    Attitudinally, consumers are expressing serious concerns and frustrations about receiving unsolicited emails. Consumers always or often 'feel frustrated by the lack of restrictions on these emails' (68%), 'are concerned about how their personal information is used and distributed' (71%) and 'worry about their privacy being violated' (59%). Consumers are not only aware of spamming but are also seriously frustrated by the practice and they certainly will not react positively to receiving unsolicited invitations to take online surveys.


    Spamming concerns extend to general privacy concerns

    The concerns about spamming extend to general concerns about privacy on the Internet. More than 80% of consumers are concerned about how much personal information others can obtain about them and that their private information provided via the Internet will be misused. Almost three-quarters of consumers worry that their Internet use is being monitored while another 56'% are concerned about hackers getting access to information.

    These privacy concerns may explain why some consumers are reticent to take their banking activities online. While 28% of consumers report they are already banking online and 21% are very/somewhat likely to start, 37% said they are not at all likely to bank online.

    Despite these general privacy concerns, consumers reported feeling more comfortable sharing information on the Internet than over the telephone. Specifically, 57% were very or somewhat comfortable providing credit card information over the Internet compared with 44% over the telephone. 40% are very or somewhat comfortable providing personal information, such as health and family history, over the Internet vs. 33% over the telephone. These altitudes complement the finding that online participants provide more honest and uninhibited responses on surveys.

    Consumers are vigilant about information they provide over the Internet as almost 70% review Internet-based privacy statements and policies on the web sites they visit. Familiarity with these privacy statements increases consumer comfort level as 60% report the existence of a web site privacy statement makes them feel more confident that personal information will not be shared in unauthorized ways. This signals the need to showcase the privacy statements on the respondent web sites to ensure this level of comfort and security.


    Consumers support legislation and guidelines

    Respondents strongly support legislation or guidelines to protect privacy online and to protect children from objectionable content. 92% of respondents fully 'support legislation or firmer guidelines that protect personal information and privacy on the Internet' while almost 90% of respondents 'support the strictest rules and guidelines regarding contact with children on the Internet and the content children can access.' This dovetails with the 67% who worry about protecting children from objectionable content on the Internet.

    The impact of these security-savvy consumers on online research is that respondents are not only concerned about these issues but are vigilant about reading and understanding privacy statements. Therefore, the presence of privacy statements and assurances should be considered a priority to increase the confidence of online respondents. Additionally, taking the necessary steps to avoid 'spamming' is absolutely essential as respondents are knowledgeable about this practice and express a great deal of frustration and concern about it. Again, respondents are a precious resource and their privacy and confidence should be jealously guarded and protected.


SUMMARY AND CONCLUSIONS

Consumers have embraced the Internet and fully expect its significant impact to continue in their everyday lives. The majority believe the Internet is the most significant technological invention of their lifetime. Their usage of the Internet has expanded beyond email communication to include more task-oriented activities such as research/education, financial management and shopping. They have acknowledged the drawbacks of this medium including those pertaining to privacy of personal information but believe the benefits outweigh any potential problems. Consumers have grown knowledgeable about privacy and security issues online and are ever vigilant about how to protect themselves, including seeking out and reading privacy statements.

Online surveys have assumed a significant role in online activities, accounting for an average 6% share of online time among people who agree to be respondents. For the most part, respondents do not feel they are receiving online surveys too frequently but do acknowledge that the surveys sometimes seem too long. Overall, they find the online survey experience enjoyable and engaging, and would like to continue to participate in these surveys. While cash incentives appear to be a primary motivator, respondents enjoy being part of the online research community, making a difference in products and services offered and the fun and enjoyment of taking online surveys. An appropriate compensation mix that includes cash, other tangibles and ongoing communication is optimal.

As we acknowledge the online research process is a marathon and not a sprint, we must examine how to maintain the longevity of communication and relationship with respondents. The most important issue is to respect respondents including their time, trust and privacy. To this end, we should recognize that as the novelty of the Internet wears off, there is a risk that consumers will be contacted too frequently as fewer respondents choose to participate.

We must guard against abuse and 'over-recruiting' of respondents and take all measures to enhance the respondent online experience. Additionally, we must protect their right to confidentiality by assuring security of all information collected, use their information for only clearly stated purposes and sufficiently secure data to prevent unauthorized use. Also, respondents' right to privacy must be protected as they have the right to be free of unsolicited contact and should always be given the right to opt out of the research process.

Other important steps include ensuring willingness of respondent participation prior to engaging them in a study, keeping surveys short and interesting and not 'wearing out our welcome.' We should express our appreciation to respondents by thanking them and offering appropriate incentive programs. Additionally, we should provide adequate support for respondents to ensure we address their questions, problems and concerns quickly and thoroughly. Most importantly, respondents have extended to us a significant amount of trust and confidence that we should protect with ongoing and exacting vigilance.