Market research cos. say it's too early to hop on internet

But that could change in the near future, as TPSA hives off its new internet subsidiary and changes the random way it currently logs customers on to make it possible for companies to begin tracking exactly how much traffic their site or advertisement attracts.
That issue, along with the relatively undeveloped internet arena here, has kept market research companies from delving further into cyber research. E-commerce is a fairly new concept in Poland, particularly since only a fraction of the population holds credit cards and only 13.6% of households had a personal computer at the end of 1997, according to the Central Statistics Office (GUS).
"The internet is one of the activities we want to cover increasingly, but it is too premature, the situation is not so developed yet," said Marcin Kujawski, research director at SMG/KRC Poland-Media.
The crux of the problem has been that TPSA hands out different log-in passwords to internet users each time they surf the net, which prevents internet providers from tracking exactly how many individual users peruse a specific site or how often. While it is estimated that Poland has more than 1.5 million internet users, the majority of them go through TPSA's free service.
That differs from the United States, where internet service providers give users a unique ID number, identifying their account each time the net is accessed. That method allows market research companies to track where a site's traffic stems from, and exactly what a user views - which also helps determine how effective an advertisement is, market research executives said last week.
In the meantime, the companies have been preoccupied with bread-and-butter business, such as fast-moving consumer goods and business-to-business surveys.
The demand for market research services took off in the early 1990s, with growth in annual turnover for the industry hitting as much as 200%, executives said. That has since slowed to about 30% annually, although forecasts this year call for growth of 30-40%, they said.
Many executives said that the industry is just taking a breather, and that demand could rev up again in coming years. "This is still the leading country for the industry's growth," said Łukasz Mazurkiewicz, director at ARC-Rynek i Opinia. "It will still be growing in two or three years, at about 40-60% a year."
That all makes e-commerce a little less compelling here, as companies have their hands more than full. At the same time, some industry players said that while companies may dip into internet activities, it will hardly constitute a major part of their business.
"We can't see it happening in the next three years at least," said Costas Vlahos, sales manager at ACNielsen. "Demand for the service is not high enough yet."
Many market research companies have explored the fast-growing world of internet advertising to supplement their existing surveys and tracking services - demand for which is not nearly as dynamic as for any information about the internet.
But even while TPSA's decision to create a new company to handle its internet services and change the way it logs on customers may make tracking e-commerce possible, an explosion in demand for such services is not inminent, Kujawski said.
Others agreed. "There won't be much effect in the long term," said Janusz Szymański, director of the interactive department at advertising agency McCann Erickson.
He predicted that in Poland, internet use will likely grow much differently than it has in the United States. Here, he said, it will blossom through the use of cable modems and interactive television that allow access, as opposed to the traditional entry through personal computers. Internet approached through those types of connections would be logged individually and therefore open to more analysis.
The United States is still the most sophisticated market in terms of internet research, where firms like ACNielson have specialized in measuring web audiences, Kujawski said. In Western Europe, the service is still new but growing rapidly, executives said. ACNielson did not disclose how much the market was worth in Western Europe, or how much they could lose by not providing the service here.
Internet providers should be more interested in research, said Sławomir Nowotny, president of Demoskop. "They are the natural main users, the internet is their product and they must have regular marketing information," he said.
With some form of collaboration with providers, market research companies could compile user data much easier, he said.
Still, the need for advertisers to possess such information is not quite there yet, Kujawski said. He said that SMG/KRC's clients so far have not commissioned full surveys for internet advertising. "It is still a bit of information that is nice to know rather than need to know for advertisers," he said.
Gradual interest though has prompted a few companies to incorporate internet research into their already extensive media activities, said Demoskop's Nowotny. "It will develop, this year, next year, we will have the first projects of internet research in Poland," Nowotny said. "Now there is no such demand."
The reason for the low demand in internet research is that e-commerce has remained relatively stagnant here to date. Two factors explain the situation. Few people own credit cards in Poland: Last month Visa International estimated that around 3 million payment cards were in circulation on the market, excluding ATM only cards. At the very most, the figure translates into a potential customer base of only 7.7% of the population. Of this number, most individuals and businesses are unwilling to part with their details over the net for security reasons, executives said.
"E-commerce is practically non-existent in Poland," Kujawski said. "You could say it's a vicious circle: no e-commerce, no market research; no market research, no e-commerce."
Simultaneously, attempts to use the net as a research tool have foundered. "We conducted some research on the internet, and also some of our clients tried to conduct such research," said Katarzyna Staszyńska, president of CASE Consumer Attitudes and Social Enquiry. "Everything failed, the response rate was very low."
Instead, she said, interested companies have drawn up question pages on their own sites rather than hiring researchers to do the work.