Multicultural Market Research: Eight Make-or-Break Rules

David R. Morse, president of New American Dimensions, discussed his new book Multicultural Intelligence: Eight Make-or-Break Rules for Marketing to Race, Ethnicity, and Sexual Orientation at the MRA First Outlook Conference. He argued that all U.S. researchers need to develop competency in multicultural research, given shifts such as these in American demographics: 

• The percentage of foreign-born population in the United States has increased to 14%, a level not seen since 1910.
• Hispanic immigration is at an all-time high, and Hispanics will make up 20% of Americans by 2050.
• By 2044, white Americans will be a minority according to projections from the U.S. Census department.

Here are David's eight rules:

1. Boost your multicultural competency. The U.S. Census is very detailed and useful for developing a detailed demographic understanding (though it lacks demographics by sexual orientation). When doing focus groups or qualitative research, make sure to have a moderator or interviewer of the race or sexual orientation being studied.
2. Divide and conquer. Don't accept the stereotypes ("Hispanics are brand loyal") but segment this population to truly understand how it relates to your market. The Current Population Survey is one of the few resources that lets you segment population by generation. Foreign born (or first-generation Americans) are very different from second-generation Americans, who generally speak English as well as their parents' native language; second-generation Americans are different again from the third-generation Americans, who typically speak only English.
3. Don't trust the experts. The accepted wisdom is often full of persistent and incorrect "truths" and urban legends, especially relating to translation. Do your homework.
4. Don't let the joke be on you. Tread carefully when doing multicultural marketing with humor; what is funny differs dramatically by culture.
5. Don't get lost in the translation. Given the prevalence of translation errors, make certain to backtranslate the questionnaire. David once was surprised to see in a survey that 100% of Spanish-speaking Hispanics disagreed that "the Internet is color blind". Rechecking the Spanish translation, he found that it has been translated to mean "the Internet has red-blue-green color blindness".
6. Push their buttons. Find the cultural cues that people resonate with; use your research to determine what those are for your market.
7. Market on a wink and a prayer. In a mainstream ad, insert a subtle cultural reference. The mainstream will miss it, but the targeted culture will appreciate it.
8. Make up; don't cover up. Watch the watchdogs. Many segments have advocacy and anti-discrimination  groups; if your marketing runs afoul of them, stop the campaign at once and apologize.

America is not one culture, and savvy researchers realize this. "We are not a color-blind society," said David. "We live in different worlds. We talk differently. We listen to different kinds of music. We worship differently." Follow David's eight rules to improve your organization's marketing and market research.

Market Research at Microsoft: Evolution of the MR Department

At the MRA First Outlook Conference in San Diego, Reed Cundiff, senior director of central market research for Microsoft (and formerly an analyst with the Yankee Group), discussed how market research at the company has evolved and is evolving.

Prior to the creation of the Central Market Research Insights team, researchers had existed alone or in pairs in many different departments across the company. Job descriptions varied significantly; researchers had no career path within Microsoft.
Four years ago, the CMRI had just eight staff. It peaked at about 102 people in June, before being brought down by layoff to 97 staff.  The upside of the downside, as it were, is that it has further accelerated the centralization of market research: departments that in the past were funding their own research are now turning to the central group instead. "We see that a lot of ad hoc research budgets have been cut; that is good for us, as there were many projects done outside of our research group." As a result, the organization is eliminating redundant and superfluous research expenditures.

The vision for the central research group is "to be a driving force behind Microsoft's business and product strategy" with the mission of delivering "strategic, fact-based insights that drive Microsoft's most essential business decisions."

The organization spends $80M to $110M annually on external research: the technology sector's largest research budget, according to Reed. Projects range from doing a market opportunity analysis for a v1 health care product to conducting a customer satisfaction survey with 100,000 respondents across 86 countries. CMRI devotes 3.5 FTEs to its research vendor management program, where they develop the preferred vendor list and do biannual reviews of the vendors (and ask the vendors to review the research managers they interact with). The result has been better use of outside vendors and consistent improvement.  Before the new process, Microsoft would "run a pilot with a vendor, fall in love with that vendor, bury that vendor, then never do business with that vendor again!"

CMRI's strategy has three key components: to "deliver integrated insights" (primary research with market analysis), to "be a trusted advisor" and to "display business acumen". As a result, what Microsoft wants and expects from its internal researchers is changing [worth a blog post of its own!]: researchers need to be more consultative and need to specialize in a few focus areas.

In its research on research, the CMRI has adopted Six Sigma. "In the past fiscal year, we went through the Six Sigma process and we are reducing the number of defects study by study by study. We averaged 12 defects per final report in a six-month period to 3 the next period down to 2 most recently."

"We need to seize the opportunity. We are moving through a lot of challenges but to drive a fact-based culture, the timing has never been better for us." In his concluding remarks, Reed said, "We spend millions of dollars that affects hundreds of millions of dollars in marketing spend that affects billions of dollars in revenue. We have to get it right."

Market Research Regulation in 2010

At the MRA First Outlook Conference, Howard Feinberg (@hfienberg), director of government affairs of the Market Research Association, presented "Regulation Over the Horizon: Emerging Research Technologies & Modes and the Legal & Privacy Hurdles". Howard covered six broad trends that have implications for the future of market-research regulation.

• Online behavioral tracking - FTC proposes self-regulatory standards, which means "you need to regulate yourselves, or we will do it for you". Facebook recently settled a lawsuit about Beacon, which was considered to be in violation of established, offline privacy laws. Public opinion about behavioral tracking is mixed: users prefer free web content, paid for by ads, to subscription websites and are aware that information about their web browsing is collected, but are disturbed by the "creepiness" factor when they are unsure about what information is collected or how it is disseminated. In a recent survey, 92% of respondents felt that there should be a law requiring websites and ad servers to delete all information about them upon request.
• Location and behavioral data - A little appreciated downside of our connectivity is that we've given up locational privacy, as we are tracked by our cellphones and GPS devices in our cars (if you know someone's home and work address you can identify their GPS data stream); sites like Google Latitude and Loopt provide information about where opt-in users are in real time. Locational data is not just about where you go, since those locations demonstrate associations - "political, religious, amicable and amorous, to name only a few," according to a New York State Court of Appeals ruling in May. Even with GPS off, phones can triangulate location from cell towers. Other developments that provide the MR industry great opportunities for observational research from data aggregation:
• Car insurance companies in California were recently given approval to charge rates based on travel patterns and mileage.
• Feinberg joked about RFID tagging of research participants, pointing out that RFID-tagged passports are now used at U.S. border crossings.
• A smart grid for power management of networked appliances and HVAC systems could provide insight into intimate consumer usage of appliances.
• UK billboards photograph license-plate numbers to look up the make and model of the vehicle, showing an ad for the exact motor oil required by that vehicle.
  
• Social media - Scraping social media is limited by concerns about data quality, which prompts questions about who these people really are. From an ethical standpoint, are users aware that you are watching, listening, reading, analyzing their output? Teens and tweens are often naïve about the privacy of their data. New laws are regulating social networks, without defining social networks; this could have implications for researchers, if online focus groups and online research communities become classified and regulated as social networks. [See Social Networks vs. Online Communities vs. Panels for my definition.]
• Respondent authentication -One survey found that web users were open to authentication by trusted vendors. No U.S. law currently governs digital fingerprinting, which is used by many panels for respondent authentication. In Europe, an IP address may constitute protected PII (Personally Identifiable Information).
• Cloud computing - The provision of data through servers accessible over the Internet raises risks for data security; Howard advised researchers to make certain to download and backup data stored on such systems. How do international data transfer laws relate to cloud computing? This is yet to be decided.
• Ethical and legal initiatives - For self-regulation of the industry, researchers are urged to provide transparency and consumer control over data, with limits on data retention. A standard practice, widely adopted, is get consumer consent whenever a privacy policy is changed. An additional practice is to get consent for using "sensitive" data. Best practices for location-based services include providing notice, requesting consent and implementing safeguards. For research authentication, notice, consent and efficiency. U.S. researchers should seek to follow the FTC's Fair Information Practice Principles.

Clearly, researchers prefer self-regulation to external regulation and Howard encourages researchers to work with him to shape best practices and influence legislation.

MRA First Outlook Conference 2009

Recaps from a few of the sessions of the Marketing Research Association's First Outlook Conference in San Diego:

• Market Research Regulation in 2010
• Market Research at Microsoft: Evolution of the MR Department  
• Multicultural Market Research: Eight Make or Break Rules  
• From Bedrock to MROC: Member Activities beyond Discussions
• MROC Case Study from ABC Studios
• General Mills Moving Qualitative Research Online
• More to come Friday!

The Future Consumer: Co-creating the 2020 Kitchen

Darren Lewis and Koen van der Wal of MetrixLab discussed co-creation at the 2009 ESOMAR Online Research conference. Three emerging themes for product innovation are democratic innovation, Web 2.0 possibilities and active consumers.
Why Co-creation? Consumers make more informed decisions, thanks to unparalleled access to comparative information. Lego provides a great example of co-creation: consumers can build and upload their own ideas for Lego kits and receive a royalty if their idea becomes a product.

Online Qualitative: Research has been more successful at using the Internet for quantitative research than qualitative research. E-groups and bulletin boards require new skills in research moderation; many qualitative researchers argue that much of the value of the focus group dynamic is lost using such methods.

Our Co-Creative Methods: MetrixLab begins with a self-administered depth interview with the results unavailable to other participants, prompting greater candor. The MetrixLab co-creative process engages customers, unleashes creativity and discovers opportunities. Interaction is limited to seeing other participants' contributed ideas. The phases (often space a week or more apart):

1. Problem analysis and individual idea generation
2. Idea sharing and enrichment
3. Evaluation by customer
4. Evaluation by professional
5. Selection

Kitchen 2020 Case Study: One hundred and fifty participants in the UK and Netherlands worked to develop the future kitchen. A video introduction to the project provided a more personal description of the project. Participants could create a "moodboard", a bulletin board with images and colors to capture their thinking. Tools channel different creative techniques: pictures and associations, document current frustrations, explore future scenarios, ask "what if?" Participants also wrote descriptions of their moodboards. Themes were the Clean Kitchen, the Green Kitchen, the Flexible Kitchen, the Connected Kitchen and the Automatic Kitchen. The Green Kitchen might incorporate herb gardens and hydroponics, for instance.

Recommendations:

• Do's
• Use social media to recruit (e.g., cigar lovers were recruited from Facebook)
• Involve a diverse group of people
• Inspire and motivate people to join your project
• Make the process fun, personal and engaging
• Share the results and give feedback to customers
  
• Don't's
• Don't leave everything open and unstructured
• Don't present a challenge that is too broad or too vague
• Don't forget to involve the client
• Don't judge ideas too fast
  

Web 2.0: Transformational Technology or Pretty Gradients & Hype?

Steve August, the CEO of Revolution, presented a Pecha Kucha session at the ESOMAR Online Research 2009 conference. He began by defining Web 2.0 as the convergence of software and socialness. As Paul Moore put it, "Web 2.0 is made of 600 million unwanted opinions in real time." Web 2.0 is made of broadband Internet, social software, digital media and wireless devices. Web 2.0 has a transformational impact for MR. Initially, MR took traditional research methodologies online. The mission of market research is "to understand people to answer business questions" but life is 99% researcher free - moments of decision, of purchase, of consumption take place out of sight. It would be expensive and intrusive to follow people 24/7, but Web 2.0 gives us this: connection + engagement + richness + immediacy. Previously our access to people was limited, a few hours in a focus group, a few minutes in a survey, but with Web 2.0 we have unlimited and sustainable access to people and their emotions. Marry these and it unleashes changes in qualitative research. Web 2.0 MR is climbing up the slope of enlightenment of the Gartner hype cycle, capturing moments of time to be everywhere at once, transforming market research.

Tom Ewing is the Social Media Knowledge Leader of Kantar Operations who presented the next Pecha Kucha session. "When a profession has been created as a result of some scarcity, the professionals are often the last ones to see it," Clay Shirky wrote, in Here Comes Everybody. Market researchers solicit and create information, collate and validate information, ensure it is representative, analyze and deliver information, deriving the meaning from it. All of these were scarcities that people were willing to pay for, but now there are...

• More and better DIY research tools.
• Weaker barriers to sharing opinions.
• Larger and richer data trails that people leave behind. They leak more data, share more data, leaving more to be analyzed.

Why ask information when it is already out there? Why ask other to test your new ideas? Our ability to collect data has been outflanked by the Internet. "We are tics on the body of the information hippo," Ewing said. Validating user generated data is vital, and such validation is a narrow skill; data can't analyze itself, which is another scarce skill; data can't present itself, which is another scarce skill. The scarcities are more stable, less threatened by Web 2.0, but do market researchers own those scarcities? We need to become essential to participants, making research a benefit and a thrill to get the exclusive information. We need to make the case for validity and the need for representativeness. We are mastering the new data sources such as social graphs. Then we can start prioritizing the analysis and delivery. That is why we can anticipate a bright future for the market research business. We can recognize the decline of scarcities and react accordingly.

Anthony Hamelle, the vice president of opinion and market research at Linkfluence, presented next. Where Web 1.0 was static, Web 2.0 is dynamic. People get and share information on the Internet. People now get information filtered by who they know, through friends, peers, acquaintances in the social network. A revolution can mean rolling back to a previous solution: sense of community provides belonging and interdependence, which was the natural state of people before the 20th century. Communities have strong and weak links: tribes of a few thousand, communities up to 300, bands up to 50. Influence from a distance is threatening; more comforting from friends. Communities evolve and exist and die online; the flow of opinions can be seen through communities as they travel through community leaders and members. Web 2.0 is a re-empowerment of communities and individuals within communities. Not every human group is a community; it takes time and belonging; very few actual spontaneous brand-driven communities. Rethink how we view interviewees, respondents, participants co-researchers.

Web 2.0 is a return to community.

Social Networks: The Big Players

At the ESOMAR Online Research conference, Tom Anderson of Anderson Analytics moderated an interactive panel featuring Daniel Shapero, director of enterprise solutions with LinkedIn, and Sean Bruich, monetization analyst with Facebook.

According to Anderson Analytics, the top 10 buzzwords that senior marketing executives are tired of hearing are Web 2.0 (19.4%), social networking (12.2%) and social media (11.3%), all up dramatically in 2009 from 2008, but concede the importance of these media. An estimated 60% of the U.S. online population uses a social network, primarily either for fun or for business, though convergence is happening. Nonusers are time-starved, concerned about privacy or are "social media pessimists". Social media is ubiquitous under the age of 24 but the rate declines by age group, down to 20% of the 65+ demographic. LinkedIn is a bit more male, and Facebook is a bit more female. The average user logs in five times a week and is less active on other types of media than a non-user.

The four biggest social networks are Facebook, Myspace, Twitter and LinkedIn. A quote from the absent Myspace representative: "LinkedIn is the office, Facebook the backyard barbeque, and Myspace is the bar." Facebook wants to be the backyard barbeque as well as the church and school. From a myopic MR perspective, Facebook has the potential to be the ideal B2C panel and LinkedIn to be the ideal B2B panel.

Ten percent of respondents admitted to creating a fake social network profile, according to Anderson research, but maintaining a fake profile is tedious and time consuming-can social networks be a solution to low online panel quality?  The speakers said that social network sites have much deeper understanding of their members than most other websites. Bruich argues that the network has counterincentives to limit people from misleading one another (e.g., unfriending, calling people out) leading to high authenticity. LinkedIn discourages "promiscuous connecting" and wants a true representation of your professional social graph. 

Bruich says that Facebook leverages its market research tools, "eating its own dog food" to determine product features, provide fast feedback for advertisers and conduct traditional and less traditional ad research. "You can't always rely on what users are asking for but have to overcome barriers they identify" to find new opportunities, said Bruich. LinkedIn uses in-depth interviews as well as its own tools to decide what few selected things to go test. "One of the advantages of social networks is that you can be really precise about the audience you want to test," according to Shapero.

For market researchers, Shapero says that LinkedIn has very accurate, very high quality data; LinkedIn knows who people are and that they are who they say they are. That's a problem for today; in the future, leveraging the social graph to understand people in context will be more important. The MR industry is much more excited about listening to ongoing conversations on social networks, looking at comments by detailed demographics such as occupation and managerial role. Facebook is primarily driven by advertising influence tracking today but is doing more looking at social and consumer trends in the future. For instance, Facebook is a great place to study a movie, if users are going to go see it, what they thought; you can predict a movie's opening weekend gross from the level of activity on Facebook.

If you're researching CPG, you need to complement text analysis with opportunities to solicit feedback about products that aren't being extensively talked about. Some Facebook users share everything they post, and an API provides access to that, but the vast majority of Facebook conversations are private, shared only with the social network. Facebook does a lot of text mining in house so that no PII (Personally Identifiable Information) is shared. Nothing LinkedIn or Facebook does will be allowed if it breaks the users' trust with their site; LinkedIn in particular is concerned about the survey experience given the viral nature of that experience. Facebook correlates with Rasmussen and Gallup results more closely than other sources.

Third-party applications on Facebook can be important sources of information, sharing movies watched, books read, etc. "A survey inside a box on Facebook is still a survey, so people haven't really leveraged the platform yet for feedback," said Bruich. LinkedIn gets asked for surveys of respondents where none of the respondents are in each other's first level social graphs. According to Shapero, LinkedIn finds high survey rates across its user base, though small business owners have lower response rates than software developers, for instance.

For both firms, market researchers are an important target market for future business offerings.

Bloggers as Research Partners

Josephine Hansom, a social researcher with GfK NOP, presented at the 2009 ESOMAR Online Research conference results of qualitative research with ten bloggers.  Key points:

• Confessional Society: A confessional culture provides accessible opinions; people share because an audience is now available that is interested. On 9/30/09 blogging about Barack Obama, people were concerned that other priorities were more important than the Olympics bid, people in other countries felt that Obama's trip to Copenhagen provided an unfair advantage over other competitors.
• The challenge: Deconstructing online opinion, looking at the blogger instead of the blog. The study performed content analysis on 10 blogs, engaged with the bloggers online then talked with the bloggers offline. The blog is different in four distinct ways:  motivation, audience, identity (online and offline identities could diverge) and publishing (attitudes towards security and privacy).
• Opinion sharers: Who blogs? Three types of blogging participants identified in this study:
• The ready-meal blogger documents offline personal interests, has a small known audience but is writing for himself more than the audience, like a diary. He does not identify as a blogger and is security conscious.
• The dinner party blogger is interested in generating interest and interacting with guests (like a dinner party host). She wants to generate and maintain an audience, which has changed her blog from its beginnings as a personal blog. Her online world mirrors the offline world; she has a greater understanding of online publishing than other blogs.
• The lite blogger doesn't see the blog as an everyday activity but uses it when task driven. He is aware of his audience and doesn't share personal data or information that wouldn't be useful.
• Going forward: How useful are blogs as data? The online persona does not always reflect the offline persona; remember the bloggers' potential motivations and concerns about privacy and security. Bloggers merit a reciprocal relationship. When using blogs as research data, recognize the impact of the audience and interaction on what the blogger is sharing. Engage by acquiring bloggers as sample, eavesdrop to analyze online statements, and connect in order to understand context of what is being shared, meeting bloggers half way; only then can we authenticate the opinions being shared online.
  

Inspiring Change: Innovative Methods & Integrated Advertising

At the ESOMAR Online Research conference, Alison Bryant of Smarty Pants, Katie Bessiere of MTV Networks and Brian Levine of Innerscope Research discussed the use of biometrics to demonstrate that casual gaming is serious business.

Sixty two participants, ages 14 to 34, were invited to select a game to play while wearing a wireless biometric vest, while having their pupil dilation and attention measured. The key conclusion was that participants had 95-99% focused attention with games, compared to 80% for TV programming and as low as 30% for TV commercials. People pay attention when playing games.

Three conclusions from the testing of video pre-roll advertising:

1. Focus on action games. The study hypothesized that there were ad-impact differences between action games vs. cognitive games. This hypothesis was validated, as video prerolls have higher recall when placed before an action game; the cognitive game seems to drive out what was learned in the video preroll. As a result, MTV Networks now classifies games on its sites based on whether they are action or cognitive games, in order to serve up video prerolls before action games.
2. Shorter is better. A 15-second video preroll had double the recall levels of a 30-second preroll, perhaps because the key messaging occurs at the end of video, by which point participants have stopped paying attention in the 30-second spot.
3. Drive synergy between games and brands. Contextually relevant ads in front of nonbranded games provide better recall (e.g., a Burger King ad before an unbranded burger shop game): people who played a game related to the ad actually enjoyed the game 40% more.  MTV now codes games about subject categories to better serve advertisers.

Four conclusions for in-game advertising:

1. Focus on games with high cognition (e.g., word games, games where players must spot the differences between pictures).
2. Target areas of focused attention. Fifteen seconds of focus on the message in the game produced 80% recall. In the U.S., the left side of the game produces better recall than the right side.
3. Integrate with the game brain. Put messaging in areas with higher cognition, such as the loading screen, the menu screen and the rewards screen.
4. Be central to the action. Banner ads are often ignored so brand a scoreboard instead, brand acknowledgement for completing a level.

MTV Networks now has an advergame development handbook that encodes the findings from this research to produce games that better support MTV advertisers. MTV is demonstrating that casual gaming makes for serious advertising.

Innovative Online Research

At the ESOMAR Online Research conference, Ron Riley, an independent marketing research consultant, presented a case study of the U.S. Presidential campaign of Barack Obama. In July 2007, the Obama campaign wanted to develop a framework for smarter policy decisions about whether to go to war and how to evaluate performance in war. Riley was hired to apply online research to assess voter perceptions and refine the doctrine for Obama policy staff.

Five innovations used in the research:

1. The study used hybrid sampling (Caddell, 1984), using random selection of 76 respondents from a national panel, with 20 to 120 minute interviews (50 minutes on average).
2. Reinterviewing identical respondents across multiple points in time (August/September 2007 and November 2007) to understand the evolution of individual perceptions. For instance, Gary Hart's re-entry in December 1987 was seen as presidential but that perception evaporated among the same respondents in six weeks.
3. A multimedia Internet platform that required webcams was used to interview respondents at any location with versatility, engaging all three learning styles. Only 12% of adult learners are auditory learners, making the phone less engaging for research; the study showed a wide range of stimuli to engage respondents visually and kinesthetically.
4. Smart phones and PDAs to visit URLs and upload video and audio. Low incidence and connectivity
5. Finally, voice analysis of involuntary vocal frequencies was used to understand respondent emotions, using Nemesysco technology.