Online marketing research

IBM Journal of Research and Development, Sep-Nov 2004 by Agrawal, A, Basak, J, Jain, V, Kothari, R, Et al

2. Schematic for implementing online marketing research

It is useful to distinguish between OMR and traditional business analytics. Business analytics uses existing data, perhaps collected during normal business operations, to find the relationships among variables (including marketing and response variables). In contrast, marketing research intentionally changes the marketing variable and collects the corresponding response. Data obtained from marketing research is thus more suitable for establishing the relationship between specified marketing and response variables. Consider, for example, that a manufacturer wants to know, as part of the exercise of designing a new product, the value (utility) that buyers associate with the different features of the product. Such information allows the manufacturer to implement desired features in the new product and remove the features that do not have utility for the buyers. Business analytics would attempt to uncover the utility of the features from historical sales of perhaps different models that the manufacturer has sold. However, since there was a certain feature that was always present, there is no way to establish whether the absence of that feature would affect sales. On the other hand, marketing research would change the features and attempt to determine the likelihood of shoppers buying the contrived product (for example, with a survey in which users indicate the likelihood of buying one of several contrived products). Though there are systematic methods of arriving at contrived products [3-5], at this point we simply wish to highlight that the data collected under the proactive change in the marketing variable would be more suitable for establishing the relationship between the marketing (features of the product) and response variable (sales).

In OMR, the change in the marketing variable is done online, and the responses are also collected online. Since the process of changing the marketing variable and collecting the responses cannot interfere with the normal operation of the site, we first describe the site and highlight how the change in the marketing variable is achieved. We assume that there is a Web site whose pages comprise content typical of online sites. In particular, there are some navigation controls, there is some space for horizontal and/or vertical banner advertisements, and there is space for the main content of the page. Hyperlinks or "hot spots" embedded within the main content or navigation controls allow a visitor to navigate the site and engage in transactions offered by the site. The content of the banner advertisements is chosen by logic embodied in the recommender subsystem of the commerce server on which the online site is developed. Certain activities (for example, a purchase) require the individual to log in, while other activities do not require identification to the system. For the latter, the individual can browse the site as an anonymous user.

The marketing variable is changed through the horizontal or vertical banner advertisements. For example, when price is the marketing variable, a coupon can be shown to the user in a horizontal or vertical banner [6]. The coupon changes the effective price of the item for the shopper (change in the marketing variable), and the user's acceptance of the coupon (by clicking on it) and subsequent redemption is the response variable. There are additional mechanisms that may be used to change the marketing variable, though here we assume that all marketing variables are changed by changing the content of the horizontal or vertical banners. This does not in any way reduce the generality of the proposed approach and helps in making the discussion clearer.