Technological Change in the Panel Research Industry

1. Technological Change in the Panel Research Industry Fred Phillips

2. Representative page from MRCA’s diary

3. The development of the DYANA™ interactive market research tool at MRCA Information Services in the early 1980s. Technologies from four scientific areas are used.

4. Attempts to measure TV audiences: Nielsen • At first, a mixture of mail diaries and in-home devices that recorded the time of day and what channel the TV was tuned to. Notably, the devices could not measure who was watching the TV, their degree of attentiveness, or, indeed, whether anyone was in the room with the TV. • Next-generation set-top boxes had buttons for each household member, and members were requested to push their own button upon entering and leaving a room where a television was playing. But the cooperation rate for button boxes was not satisfactory. • Medallions containing personalized radio frequency devices were then introduced – but as the styles of the 1970s passed, people were loath to wear medallions on chains. • Set-top boxes with heat sensors were the next attempt – and the measured TV audience was augmented by dogs, infants, space heaters and toaster ovens.

5. Technological Substitution in the Market Research Industry and Attending Business and Social Changes (Technological changes are in plain text, business changes are in italics, and social changes are in boldface.) 1930s Statistical sampling theory. 1936 Arthur C. Nielsen, Sr., licenses device from MIT to record the stations to which a radio has been tuned; in 1942 starts Nielsen Radio Index. 1941 MRCA - door-to-door. + purchase interviews. + cupboard inventories. - manual punchcard DP. 1950s Urbanization; less response to door-to-door interview sampling. MRCA moves to mail diaries. Nielsen TV viewership measurement. 1960s Trash audits. Digital computers; proprietary languages for DP. Mathematical models for analyzing market data.

6. Continued… 1970s Commercial database software used by market research industry. Laser scanner technology. More women in workplace. More divorces; expanding economy; average household size shrinks. “Advanced” TV viewership measurement. - button boxes. - medallions. - infrared. 1979 IRI business plan & IPO; $200 million raised. - pod markets. * isolated grocery trading area. * isolated cable reception area. - give away scanners. - split-cable experiments. IRI starts to take customers from MRCA. 1980s IRI expands from pod markets. Nielsen emulates IRI model; uses pattern recognition algorithms to recognize what commercial is being received. DYANA™. Customers return to MRCA due to DYANA, shortcomings of scanner data. Increase in unlisted phone numbers; random digit dialing. Cheap microcomputers, microprocessors, microcontrollers. But reliable voice recognition technology still not cost-effective. Survey-on-a-disk for computer industry market research. (Sawtooth, Intelliquest). Automated call centers.

7. Continued… 1990s IRI, Nielsen overcome most technical difficulties with scanner data; recapture market share from MRCA. Home and free time more valued by working adults. Further internationalization of technology markets. Home scanners, home scanner panels. IRI $6 million syndicated advertising effects study fails. Wide diffusion of fax machines; fax surveys. E-mail surveys. Exploding Internet use; interactive WWW questionnaires. Data mining. Successful voice recognition technology for census data. 1996  ABC, NBC, CBS, Fox place joint ads in trade press criticizing inaccuracies in Nielsen TV measurement data. 1990s and Later... Nielsen plans to use embedded codes in digital TV to identify incoming programs. Image recognition computers to recognize individual TV viewers. Tracking web page hits; “cookies.” Integration of TV and WWW...

8. IRI’s plan to revolutionize the industry • Raise enough IPO capital to give scanners to every supermarket in a half-dozen “pod markets” throughout the U.S., in return for rights to the checkout data. • Each pod market was a small city with demographics mirroring those of the U.S., an isolated grocery shopping area, and an isolated cable TV market. • In each pod market, a sample of households were recruited, asked to fill out a paper questionnaire on household demographics, and issued an I.D. card with a unique bar code, to be swiped at the checkout stand prior to scanning the grocery purchase. • For the first time, supermarket purchases could be automatically recorded and linked to households with known characteristics. Because this seemed “objective” and eliminated some key entry tasks, manufacturers were excited about the prospect of more accurate data. • Arrangements with the cable TV company enabled manufacturers to air two versions of a commercial, with each version cablecast to a different sub-sample of the panel households. It was then possible (or so went the claim) to measure the differential effect of the ad copy on subsequent purchasing!

9. Initial problems with scanner data • Not all manufacturers used their allotted UPCs to uniquely differentiate their products. • Even the balanced demographics of pod markets could not produce nationally projectable purchase data. • IRI panel members could easily forget to take their I.D. cards to the supermarket. • The location of the pod markets were well known, and split-cable ad tests could hardly be kept secret. Competitors sabotaged other companies’ ad tests. • Processing scanner databases to extract useful information for decisionmaking was, initially, too difficult. • Only supermarkets were given scanners. But people buy food items at convenience stores, K-Marts, gas stations and department stores. • Scanner databases suffered from their own, unique key-entry errors. Through the mid-1990s, studies reported that up to 9% of prices shown at the scanner checkout differed from the prices marked on shelves or packages, or were otherwise in error. It took manufacturers several months to see that these problems compromised the actionability of their market research data. They then began to re-subscribe to MRCA’s service.

10. But many of these problems were overcome • By technological tweaks • By price reductions • Net result on adoption pattern of scanner data: OOO