We are excited to share our first interview for the Behavioral Data Barometer with you!
We have interviewed German Loewe, who founded Netquest in 2001. Netquest is the leading online panel provider for the market research industry in Latin America, Spain and Portugal. Netquest has incorporated passive metering in its panel model in 2013. One year later, Netquest acquired Wakoopa to unite participants’ satisfaction with constant technological innovation.
Interview with Germán Loewe, Founder & CEO at Netquest and CEO at Wakoopa
What made you decide to go into passive metering?
In general, I saw behavioral data as a promising opportunity to move one step further and reevaluate market research, given that traditional survey data has become a bit commoditized. I thought it might put market research companies in the position of owning a very valuable, new set of data that no one else might own.
In our case, we had learned how to manage online panels and how to get the quite significant loyalty from panel members. I started realizing that this loyalty could also be used for other data than survey data. More precisely, I thought of collecting behavioral data from the same panelists.
How did passive metering help and/or change your position as a panel provider?
I would say significantly. And let me explain you why: Our business model consists of executing survey sampling requests from the market research agencies. I have chosen the word executing on purpose, because the whole idea in our business model is that the owner of the survey – and with that the survey data – is owned by third parties, either the market research agency or the end client. We have never been the owners of the data we have produced. That put us in a sort of weak position, because panel companies were seen as the last element in the value chain.
Now, with behavioral data, we began owning our data for the very first time. It’s in fact an exciting journey. If you are into data collection as we are, it’s exciting to explore a completely new type of data that we can collect. Behavioral data is like a massive project that we run ourselves. And this has changed the Netquest position significantly – and it can also strengthen the position of any other panel company.
How has Netquest incorporated passive metering in its panel model?
The first big question that a panel company will face when dealing with behavioral data is the incentive strategy. You can choose among rewarding the installation or the ongoing data stream. It’s an interesting discussion on what the best rewarding system is to encourage people to share their data. For instance, surveys have a small entertainment aspect in its nature, so some people answer surveys for the sake of it. This is not the main reason why people participate in surveys, but it might be a bit more attractive to share your opinion about products and services, whereas sharing your behavior is only passive. When using passive metering technologies, the most important thing is to ensure and remain a trustful relationship with the panelists. Apart from that, at least in our panel model, if they feel safe, then it’s a matter of earning reward.
Additionally, when dealing with behavioral data, treating panelists well becomes a central and essential part. This includes the protection of their privacy very consciously. Netquest takes this extremely serious and we are continuously working on ways to remain the panelists privacy, which is a huge challenge. I think this should be the core of a panel company’s activities.
What do you see as the main challenges when dealing with passive metering?
One of the biggest challenges for a panel company is to find the right business model and the clients for behavioral data. Although, thanks to Wakoopa, the data is processed into meaningful clickstream data, the data still has to be further processed, analyzed and interpreted. For a panel company it’s an unfamiliar value proposition into the market, because you have a very valuable set of data, but market researchers do not know what exactly to do with it and how to use it. They don’t have the data processing or analytical skills to deal with this data.
With the adoption of behavioral data, it could become necessary to integrate more data processing competences into the company or create pre-products that enables agencies to work with the data.
How has your experience with passive metering been within your specific markets?
On the one hand, we see the interest of large audience measurement companies. These companies were interested in this data from the very beginning and we have been (and still are) quite successful in providing some of these companies with this new type of data. But, we also notice an increase in the demand for behavioral data from more custom-related companies, who are developing new research solutions around this data.
"With behavioral data you see consumer reality."
What is your key take-away from dealing with behavioral data?
It’s incredibly rich in insights. With behavioral data you see consumer reality. You see things you wouldn’t expect. Survey-related research tries to ask people what they do, but they don’t remember. With surveys you see only a part of the whole. It’s super convenient and it has been extremely successful for a long time, but now behavioral data reflects the reality, which is usually full of surprises, full of interesting links and connections. This is why in my opinion behavioral data will transform market research.
Is there any advice you would give the market research industry?
Definitely. I think that market research has to embrace behavioral data, because it is a clear opportunity for market research to find its place in the digital world.
Market research has collected data typically out of two sources: The consumers and the retailers. This second part might be under threat in the future, because all these shops operate digitally and this information might be owned by the main internet players or become available for free with the explosion of new company types and technologies.
So, for market research, owning and collecting the consumer’s behavior might be a huge opportunity. This can only be done by starting to adopt to new technologies. And not by looking at these challenges with fear or doubt, or by trying to protect the survey research.
"We are in the beginning of the best times for market research."
How do you see the future of research?
It’s becoming more and more difficult to predict this, because the rate of change is accelerating. But I think the main market research needs will remain. Only the type of companies who will be providing the solutions to these problems, might change. I can see hard times for companies that are still exclusively focussing on traditional methods.
Moreover, new digital companies that don’t originate from market research, but have started measuring things and providing data, are entering market research. The problem has been that the industry itself and the marketing world has made the mistake of defining market research by only survey-related research. So, you can even see people in the industry saying that it’s going to be hard times for market research.
What they actually mean is, that it’s going to be hard times for survey-related research. I think that we are in the beginning of the best times for market research, for a very simple reason: The objective of market research is to measure the market and the consumer. With more and more digital, observable activities, there is more and more to measure. You only need to properly define market research. Not by the method, but by the objective. The only change will be in the methods and the technologies.