the MARC Group.
"I didn't see that it was going to be in our interest to create the infrastructure that DMS had already created," says Ed Keller, president of Roper Starch Worldwide. "The combination of what they have created and where they want to go gives us the quickest way to bring a first-class capability to our research clients."
The poor response rates of phone interviewing have also driven the cost of research up dramatically. According to Beth Rounds, senior VP at CRI, "The market is demanding a cost-effective solution." The relatively low cost of using the Net to research niche markets, such as diabetics or pregnant moms, has helped keep research part of the business process. CRI increased the online portion of its projects from less than 1 percent last year to more than 5 percent this year.
For traditional data collectors, the economics of conducting research are reversed when that research is conducting online. Where the majority of costs used to be variable - interviewers only work when there are projects going - the vast majority of Net research costs are fixed. However, programming, hardware and storage expenses can run into the millions of dollars, making it difficult for established players to compete in the game. "It is a profoundly different world," says Harris' Black. "And that is, by the way, what is causing so much anguish in the traditional research world."
Despite the high fixed costs, difficulties in finding respondents in an aboveboard manner caused many major firms to recruit large Net-based panels of willing respondents to have on hand. In addition to Greenfield and Harris, major offline companies NFO and the NPD Group also have large online panels. Greenfield has been around since 1994 and now has a pool of 1.2 million individuals in 400,000 households. Nadilo says the panel is recruited through cooperative marketing arrangements with other sites; each person who joins the pool must answer a battery of questions about their personal characteristics.
Harris uses promotions with NBC, sweepstakes and banner ads, as well as a deal with Excite, to maintain and grow its 4.5 million member panel. When surfers register at an Excite site, they become part of the Harris panel, so long as they agree to receive invitations to participate in research studies.
Both techniques have their drawbacks. Nadilo asserts that Harris' "passive opt-in" process (in which registrants on Excite must uncheck a box to opt not to become part of the Harris panel) means individuals may not know they've joined a research panel. Others say the Greenfield recruiting technique of specifically inviting people to join a research panel gets a peculiar set of folks who just enjoy filling out surveys.
About one-third of the Harris panel agrees to provide their name solely for research purposes. The other two-thirds have agreed not only to help researchers, but to receive commercial messages. This is where Harris crossed over to market research's dark side: offering to sell products to folks who express an interest in, say, a new broom.
Although a vendor fulfills the order, Harris can recontact the new broom owners and find out how the product is working, test reactions to different broom ads and offer related products. "This is a new method that has largely been ignored in the past," says Harris' Black. "It is done with the informed consent on the part of the people participating."
By selling to respondents and combining a marketing database with a panel, Nadilo says he and other researchers believe Harris is violating the guidelines of the Council of American Survey Research Organizations. Sources say Greenfield Online has filed a complaint with CASRO about Harris' recruiting practices, though the organization refused to confirm they had received such a document.
Pushing the envelope even further is BizRate.com. The Venice, Calif.-based e-commerce research firm began as a sort of Better Business Bureau guide to Net merchants. An invitation to participate in a postpurchase survey by BizRate.com is
