In the age of digital channels, collecting data via the internet is a no-brainer. Not only are online channels a cost-effective way of gathering information, but consumers appear more willing to part with information electronically. Online forms are easier to fill in and less time-consuming, and incentives for parting with information, such as loyalty points or a prize draw entry, can be instantly delivered. In fact, a study carried out by Jupiter Research in 2006 suggests that 82 per cent of consumers will give up their personal information online for the chance to win a prize.
For these reasons postal surveys appear to be in decline. This issue was highlighted at the end of March, when multi-channel data owner IPT posted strong results, yet still saw its share price fall by 23.6 per cent. This was the result of a cautious statement about prospects for the first half of 2007, which the firm attributed partly to "a weak market in the UK postal area".
So does the growth in online data collection mean that postal and telephone surveys can no longer be justified? The industry appears to be divided on the issue.
Jonathan Clough, head of data acquisition at Acxiom, says the company's online data collection activities are growing. It operates three consumer-facing websites as vehicles for data collection, both for lead generation and to source demographic data to fill gaps in the edited Electoral Roll. And Clough says he would be "surprised if that number does not treble" over the next 12 months. But despite this, he points out that Acxiom continues to generate something in the region of six million paper responses a year from lifestyle surveys, warranty cards and customer satisfaction questionnaires.
"Postal and paper-based surveys will always have a place, though they will become more niche," says Clough. "Companies have to get smarter about how they use paper. If they use it in the traditional format they will lose out because people's attitude towards direct mail has changed, so you have to show more value."
Data stalwart Huw Davies, who recently launched his own company The Huw Davies Partnership, suggests that postal surveys are going out to an ever-decreasing base of consumers. "We are down to three or four million people answering them, and they are of an older age profile," says Davies. "That's fine if you're Saga. You could argue that 70 per cent of the cash in this country is owned by the over -55s, but even they are moving online."
In Davies's view, the end-game for online data collection is a situation where consumers take control of their own data, giving up their personal information in return for a small royalty payment every time the data is sold to a company for marketing purposes. "I don't see any reason why that couldn't happen," says Davies. "It would give consumers a real reason to answer lifestyle questionnaires and provide accurate information."
Different channels
Experian started collecting data online three years ago, an approach that now accounts for 50 per cent of the data it collects. In January, it launched its Just-Rewards website which gathers data via online surveys. The information goes into lifestyle lists and is also used for building models on Experian's National Canvasse database.
Despite the rapid growth in its online activities, Experian says that like Acxiom it will not be abandoning paper-based surveys. "There is a certain amount of skew in online data that means it becomes less responsive to mail," says Peter Thompson, Experian's commercial director, prospect targeting.
And while he recognises that online data collection is cost effective and flexible, Thompson believes there are also some negatives. "It's difficult to capture the depth of data online that you can get on a paper survey," he says. "You get less of the mainstream variables that might be important for use in modelling, so while I would anticipate the percentage of data we collect online will grow, I doubt it will ever be 100 per cent of our activity."
When data provider DLG bought Wegener last year, it combined its own phone- and web-based data collection operations with Wegener's warranty card and surveyed data. DLG director of communications Richard Webster notes the distinction, not just between data collected offline and online, but between phone and paper-based methods. When the company deduped the Wegener warranty card data against DLG's phone-surveyed data, it found that less than 10 per cent of respondents were on both databases.
This distinction, says Webster, carries through to the way that consumers react to being marketed to through different channels. "We have discovered that people have preferred methods of communication, both in terms of volunteering it, and receiving it, and this is why we can justify maintaining three methods of data collection," says Webster. "People who complete postal surveys tend to respond more to direct mail."
Dak Liyanearachchi, commercial director at LBM, agrees that online and offline data collection have their place. "I think you need a mix of the two," he says, citing an LBM project that gathered consumer feedback via the web and offline focus groups. Liyanearachchi says that each medium returned different answers.
"With qualitative focus groups you can probe deeper and follow a train of consumer thought in a way that's not possible online," he says. "This is not to say that one is better than the other; it's a question of understanding what you're getting out of each medium."
Permission policy
While the big, traditional data players are making a move online, others are well established in the internet space. The most notable example is IPT. For the past seven years it has been building bespoke prospect databases for its clients by encouraging consumers to visit one of several websites, most notably MyOffers (www.myoffers.co.uk), which has 6.6 million registered users, completing up to 4.5 million sponsored questionnaires per month in return for the opportunity to win a prize. IPT built a database f of 350,000 prospect names for Vodafone in 12 months and one of 500,000 for Dixons in two years via MyOffers. But IPT does not have the online firmament to itself. Ex-IPT employee Craig Carr left the company last year to set up Lifestyles Online, which specialises in generating real-time leads online. The company runs several consumer-facing sites, including getmeaticket.co.uk, which between them generate around 140,000 new registered users each month. The Lifestyles Online database currently has one million unique individuals, but while there is a list rental element to the operation, Carr says the core business is real-time sales leads.
"Consider, for example, a survey on the site sponsored by a finance company. As soon as the consumer says they are interested in a loan and that it's okay to contact them, we do a live send to an outbound call centre there and then," says Carr.
Permission is the key to it all, says Carr. Consumers can go on to the site, enter the competitions and stand as much of a chance winning the prize, irrespective of whether they give the company running the competition permission to contact them or not.
"We are seeing a shift now where people expect to give their consent before they receive anything," says Carr. "It is consumer-generated permission. Companies don't want to waste their budget on someone who has no interest in what they are selling and they are really starting to question the value of continually mailing someone until they take up the offer or register with the Mailing Preference Service."
Future challenges
The challenge facing those involved in online data capture is to encourage consumers to visit their websites. The key tactics are typically online advertising, including paid search, and affiliate programmes. But list broker Caspian is marketing a US invention called the eDecoder with the aim to get offline consumers to register online using a prize draw mechanic.
The eDecoder is a printer card that can be designed to any size or shape and distributed in-store, at events or via direct mail or inserts. It contains a translucent area that is placed over a consumer's PC monitor to reveal whether or not they have won a prize. According to Caspian, the eDecoder achieves an average 46 per cent opt-in rate, and has been used by Gillette, Coca-Cola and Disney.
So even when you're collecting data online, it seems, offline tactics still have a part to play.
POWER POINTS
- Online surveys are often more cost effective than phone or mail ones
- Phone contact or printed mailouts can lead to more in-depth results
- A small reward in exchange for information encourages online response
CASE STUDY: Online tactics versus door-drop approach
Brand: Seasons Holidays
Supplier: Lifestyles Online
Brief: To collect prospect data online
Up until 18 months ago, timeshare company Seasons Holidays was a big user of doordrops, with one million delivered a month. But with response rates down to around 0.3 per cent, compared with 1.6 per cent when the company started using them, it decided to take a new approach. Now, Seasons Holidays collects prospect data online via five websites. The sites deliver 22,000 leads per month with the majority coming from the Getmeaticket website operated by Lifestyles Online.
Consumers are offered the chance to win a free week at a timeshare every day as an incentive to get them to the Seasons Holidays website. Once there, they can opt in to receive email marketing communications from the company.
"We have 23,000 happy members and a product that people love when they try it," says Seasons Holidays group marketing director Lesley McCann. "The objective is to expose them to the idea and make them think about it. When they opt in to the newsletter, we can then start to court them and tell them more about ourselves."
Consumers who opt in receive an email newsletter once a month. McCann says the consumers who found out about the company via the door-drop convert at around twice the rate of those whose details are captured online. But Seasons Holidays says this is acceptable, for although the cost per response is much less online, the company looks at door drops as a longer-term relationship-building exercise.
"The door-drop leads cost us from £8-£16 per response," says McCann. "Online it's much less. The conversion was double what we see online, but that's because in a door-drop, you have the chance to tell more of a story about the firm. When people see the sponsored questions (on the Getmeaticket site) online they don't connect with the product in the same way."
Though he refuses to rule out using door-drops, McCann says he does not see the company employing them in the next 12 months.
NEED TO KNOW - How to boost online data capture
What makes a good online data capture incentive? If you look around some of the online data collection sites, such as Getmeaticket, Experian's Just-Rewards and DLG's Vouch4me, the answer it seems is clear: prizes and more prizes.
Offering consumers the chance to go into a prize draw for the opportunity to win items ranging from a car to a holiday to an iPod seems to be the surest way of attracting the largest number of entries and, therefore, capturing the most data.
"Prize draws are completely tried and tested and they work for two reasons," says Martin Kiersnowski, chief operations officer, IPT. "They are attractive to consumers who like winning things and they appeal to advertisers who like showing photographs of holidays and cool gadgets."
But by offering prizes, do companies risk just attracting entrants who are submitting their details just to try to win a prize, rather than building a long-term relationship with the brand?
There is some substance to this argument, concedes Richard Webster, DLG's communications director, but in practice it's not as big a problem as it might at first appear.
"It is more self-selecting than with postal and phone surveys, but the positive with online collection is that these people know they are going to be communicated with," says Webster. "They understand that if they click on a voucher for a particular company or product, they will receive a communication from that firm, so everyone knows where they stand."
Peter Thompson, commercial director, prospect targeting, Experian, says the company is careful not to over-incentivise its offers on the Just-Rewards website, while Jonathan Clough, head of data acquisition, Acxiom, says the current challenge is to get away from prize draws and move towards offering more customised incentives.
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