What Is Digital Marketing Research

Digital Market Research: Simply Getting Marketing Data from the Internet?

Digital Market Research

Digital market research promises a whole lot of data, thanks to which we can see inside the “consumer’s head”. But what is there really to digital market research? What are its methods, goals and challenges?

Digital Market Research Makes the Internet a Data Source

For a long time, telephone polling and surveys done on the street, in department stores or with invited groups were the preferred information source of market researchers to make marketing decisions. But in a time when truly all social groups are active on the internet and share their opinions there, much more comprehensive information sources are available. The only issue is tapping them correctly, and that is exactly what digital market research does. It searches social media, blogs, forums, comments and other sources for relevant information, to ascertain customer preferences and needs.

What is Digital Market Research?

Digital market research describes the analysis and evaluation of information that is gained on and from the World Wide Web. It is accomplished using digital data processing, which ranges from manual analysis of data sets to artificial intelligence (AI).

How Does it Work?

People often associate digital market research with big data, machine learning and the accompanying artificial intelligence. However, it doesn’t have to be as complicated as that.

Small Scale Digital Market Research

Even the owner of an online shop conducts digital market research when he evaluates which products sell best. If he knows what those are, he can add similar or complimentary items to his assortment. Similarly, the assessment of customer support requests is also a form of digital market research. Looking at product reviews is naturally also a part of that.

Large Scale Digital Market Research

Companies like Facebook and Google are constantly doing digital marketing on a truly grand scale. They do everything to capture the preferences and needs of their users to then create an advertising profile perfectly suited to him/her. To do that they rely on diverse algorithms which they are always refining, as well as user tracking and of course artificial intelligence or machine learning.

Machine learning specifically has enormously advanced AI in the last few years. It involves a method by which software (an algorithm) is fed with training data. Based on this information the software independently detects certain regularities or patterns in the training data. Armed with these learned patterns and regularities, the software can then analyze unfamiliar data.

Example:
A software was trained using cat pictures. Afterwards it can recognize whether cats can be seen on new images or not.

 

AI is also now capable of not only searching for keywords in a text, but also of delving deeper into it. It comprehends at least in a rudimentary way what the article, post or comment is about.

The results of this are practically unlimited possibilities for digital market research. In this way, forum article, posts and comments in social media, in blogs and even images and videos can be entirely automatically scrutinized for content.

What are the Most Important Goals?

Here, we primarily have the goals which traditional market research also has:

  • Improving customer acquisition and customer retention (capturing needs, wants, preferences)
  • Keeping an eye on trends and tendencies
  • Identifying new target audiences
  • Finding approaches for new marketing campaigns

But there are also goals that only matter in the digital world:

Finding Influencers

Digital market research allows influencers who fit with your own product portfolio or marketing strategy to be located. With them, companies bring their products to the masses in a manner that is very focused on the target group.

Usability Tests

Usability tests of websites or apps also take place via digital market research. Only thanks to end users are there enough different end devices (PCs in various configurations with assorted software, Macs, smartphones, tablets, etc.). Moreover, very different use scenarios and reactions are included that an offline test could never cover completely. Not even Microsoft engages large teams with diverse PC systems to test its updates anymore. That now only happens through users, which, however, often leads to problems. (see: Why does Microsoft Windows 10 have so many bugs? Ex-Employee tells you why!)

Online Surveys

Online surveys are also only possible in the world of digital market research, whereby they are extremely similar in composition and structure to the classic subject on the street-survey. However, the group of those surveyed allows itself to be expanded to include all internet users as market research participants, at least theoretically.

Tip:

Find participants for your online survey quickly and easily via the service “Surveys” at clickworker.

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Problems with Digital Market Research

System Errors

Poorly formulated questions, unsuitable tasks, imprecise definitions or interpretation mistakes do not only effect classic market research, but also the digital version.

In addition, particularly online surveys have the problem of sample bias. That means only certain people have the time and inclination to take part in such polls. The results are even more biased when specific prices or rewards are tied to the survey. Then “bargain hunters”, for example, participate who have no interest in the survey topic, but only in the incentive. (Additional issues with online surveys can be found in the article: Online Surveys: 10 Most Common Mistakes & How To Avoid Them)

Poorly trained AI’s are also a big problem. A Google algorithm once classified a dark-skinned person as a gorilla. That was due to the fact that the software had only been trained with images of light-skinned people. There was also software that purported to identify criminals based on faces. However, for its training a police databank of perpetrators was used, in which most of the criminals were photographed wearing t-shirts. Therefore, the software probably used the t-shirt as an attribute for recognizing criminals. (cf. Artificial intelligence on the wrong track) This type of poorly trained program of course leads to errors with large data evaluations in the digital market research realm.

In addition, artificial intelligence is not protected against fake news. Results can emerge that are based on fake news and for example depict a manipulated trend.

Legal Challenges

There are many areas of the internet in which great legal uncertainty prevails, especially with respect to data privacy and the ever-present General Data Protection Regulation (DSGVO).

Anonymizing the data helps here initially, however, studies show that even anonymized data allows inferences to be made about individuals. And that again creates legal uncertainty.

Ethical Questions

And finally, there are also ethical problems in the field of digital market research. Are pollsters allowed to go as far as Cambridge Analytica and analyze personal data to influence an election? (cf. Cambridge Analytica)
Additionally, each person gets a “price sticker” affixed to them in digital market research. That degrades him/her to an economic object. (cf. Data that costs live) What does that do to our understanding of being human?

Digital Market Research Combines Opportunities and Risks

Digital market research makes the detailed exploration of people’s behavior and needs possible. Artificial intelligence specifically makes for an enormous workload reduction here, because it evaluates huge amounts of data in a very short time. Ultimately, digital market research creates a transparent consumer.

On the other side it also harbors risks. They can be systematic, like poorly trained AI’s that bring to light completely incorrect results. Moreover, it presents legal and even ethical problems. At the end of the day digital market research encounters the same challenge as other sciences: It is not only a tool, but also an agent. For that reason, it carries with it just as much responsibility as the companies who use the results of digital market research.

Digital Marketing – Study Notes:

Understand your target audience

Market research helps you to understand your target audience. Recent reports suggest that 55% of marketers did not feel confident that their organization understood the consumer journey. Research is a very important tool and resource that can help you understand your customers.

This enables you to explain to the rest of the organization how customers behave and how consumers view your brand. This is more than just hearsay. You can back it up with hard facts.

Methods

Many different methods are available for conducting market research and allowing you to understand your target audience. They not only enable you to collect data, but also analyze it as well.

You also need to think about resourcing and outsourcing. You can choose to do the research yourself, or you may want to outsource to a specialist research organization. The complexity of the methodology you’re using will influence whether you want to outsource it or do it internally.

Observational research

There has been a shift from “How do you think you will behave?” to “I know how you behaved?” In the past, you might have held focus groups to find out what people are doing and whether they’d buy your products.

Now, you can use tools and methods to observe exactly what consumers are doing.

Eye tracking

One method is eye tracking. You can observe how someone walks through a retail environment or walks through a supermarket, how they examine products on the shelf, and how long they spend looking at parts of a packaging or a certain shelf. It’s a completely different tool to then asking them in a survey or group, “What do you think you will do?”

Online tools

Many online tools are available, such as virtual shopping and online collaboration tools. These bring together communities of consumers and ask them questions in order to do market research. More and more brands are doing this. And often, they’re doing it with people who are real brand advocates because those people are really helping inform the key parts of the customer journey. They can highlight issues that marketers may have missed or the key pain points because these are people that are really paying attention to your brand. They feel really strongly about the brand and want the brand to succeed.

Social media

Brands are also using social media to conduct market research. And as social media continues to evolve and launch new tools, marketers can use different methods to collect information and observe how people are behaving.

Curate the optimal media mix

Market research enables marketers to curate the optimal media mix. Data can help drive decisions around where you spend your marketing dollars. By doing marketing research, you can understand what media your consumers are consuming. This then enables you to then to optimizing your media mix within your marketing plan.

This helps you distinguish between what you think the ideal mix and what the ideal mix really is. You can find out the perfect mix for your target audience and for your target segments.

Consider this example. Marketers might think they should be spending 14% on traditional marketing. But they need to do market research to validate that. Perhaps it should be a far larger spend. It’s very easy for marketers to think that they know all the answers based on previous experience. However, the world continues to change, and marketers need to keep on conducting research and keep on top of how consumers are behaving. Just because one campaign works by having a certain marketing mix doesn’t necessarily mean your next campaign in six months will behave the same way. Things change and consumers change and channels change.

Quantitative research

With market research, there are two different main types of research that we can conduct.

The first one is quantitative. There are four basic types of quantitative research.

Survey

The most basic element of quantitative research is a simple survey. This is something we’re all used to. We’ve probably all carried out at least one survey in our past or filled out a survey, asking questions of customers.

Maybe it uses a scale of 1 to 10, or maybe it’s tick boxes. Quantitative research is less about free-form answers.

Correlational

Once you have carried out a survey, you can start looking into the numbers, into the data, and observing patterns. And this is the correlational aspects of quantitative research.

Causal comparative

Once you see those patterns, you may want to start comparing A and B and asking deeper questions to create those comparisons. This is causal-comparative research.

Experimental

You then move into more experimental where, by analyzing all this data and these trends, you develop new hypotheses. This in turn leads to more questions and new surveys.

Qualitative research

Qualitative research is an in-depth exploration of what people do, think, or feel. It really allows you to get some valuable insights into consumer behavior.

There are different methods of quantitative research.

Online forums

You might be a company curating a forum, or maybe you use a research agency. Forums enable you to study what people are talking about. How do they feel? You might be assessing the questions themselves or just observing conversations and gathering the information from those conversations.

Web survey chat

You may have first asked a survey. As a result, you might say to a customer, “Would you like to talk further about it?” This allows you to probe into their answers into much more detail.

In-depth interviews

A lot of companies use in-depth interviews. They can really lead to some key insights.

HSBC developed a proposition development process called Insights Grow. And the starting point is the “I,” the insights, I to G, Insights Grow. And that revolved a lot around doing in-depth interviews and one of the most successful products to come out of this was a proposition called HSBC Passport. This allowed customers who are new to the UK to get banking facilities. That product only evolved and came into existence because in the in-depth interviews. HSBC got into the detail around the difficulties of opening up a bank account. And it got some superb insights into what it was like as a person new to a country who maybe didn’t have different forms of identification that we traditionally needed as a bank. They may not even have an address. One thing they prefer to do is open it up while they’re still in their home country before they move over. This gives them a sense of security. Without doing those interviews, the bank would not have learned this.

Increasing fragmentation of audiences

Market research also allows us to understand the increasing fragmentation of audiences. This is not just about the fragmentation of consumers, but also micro-segmentation.

As marketers, we might be thinking about all these different channels. However, if we don’t take an omni-channel approach and if we’ve not built a marketing plan that is adhered to, then we could end up using different tools without a consistent objective.

Then we start to bombard people with messages and that’s not effective. That’s when customers just feel like they’re under attack from a brand. Think about some of the email marketing you receive, for example. If you feel that you’re being bombarded, will you do business with that brand?

If we follow a fragmented approach as marketers, we don’t give a consistent experience across channels. Consistency of experience is key in ensuring that customers purchase your products and remain loyal.

Also, 94% of customers discontinue communication with a company because of irrelevant messages. It has to be the right message at the right time. Segmentation allows you to do that but you also need data and you need to research when is the right time to send that message.

Fragmentation of news

One example of the increased fragmentation of audience is how we consume the news. TV is dominant, because 78% of Americans watch local news TV. However, the internet is growing and 61% check the news online.

Think about the news sources you use and how often you check them. Social media represents a huge shift. It’s really influencing how news is presented and consumed.

And news now happens in real time. You don’t have to wait after an event to see what has happened. There will be people there on the scene broadcasting things. And think about how news channels and agencies have changed, how they present the news. It’s much more about being in the moments, about live streaming, about playing out every second of the story as it develops. No longer is it just packaged up into a piece of content that is delivered later.

Ongoing market and media analysis

The final part to consider about market research is actually understanding your competitors. You can’t live in a bubble. You have to be aware of what your competitor are doing because the whole point is trying to beat them!

The Chief Marketing Officer at Barclays once spoke at a marketing conference. He talked about his daily routine and the first thing he said was, “Right, when I wake up in the morning, the first thing I do is I kiss my wife. The second thing I do is decide who I’m going to beat today because that is my job. As a marketer, I want to be the very best, I want to be the very best for our customers, I want them to buy my products, and therefore I have to understand what our competitors are doing. Have they suddenly changed their product? Have they changed their pricing? Have they changed their brands? Have they changed their advertising?”

These are things as marketers we need to understand. You can check sources yourself, or outsource the research to companies like Nielsen or Comscore. But sometimes it’s best as a marketer to understand our competitors by sitting there and thinking from both a marketer’s perspective and a consumer perspective. Do desk research and go through websites and zone in on what are they doing.  And if they’re successful, why are they successful and what can you learn from that? And if they’re not successful, what can you avoid doing as a business?

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