In This Issue
Volume III September 2004
Are Landline Phones Losing Ground?
by Andy Arthur, V.P. Client Services, Mediamark Research Inc.
Twenty years ago, there was one telephone company and the words "telecom" and "competition" were rarely used in the same sentence. The landscape is different today, thanks to the breakup of AT&T, the mergers of the "Baby
Bells" and the introduction of cellphones, the Internet and VoIP (voice over Internet protocol) telephony. And where every household once needed a phone line to be connected, millions are now unplugging and are 100% mobile.
Changing Demographics in Households Without Landlines
MRI has measured the presence of traditional "landline" phone service since the 1980's. After declining gradually throughout the 90’s, the percent of homes without wired phones has doubled over the last
four years, from 4.2% in Spring 2000 to more than 8% in Spring 2004.
Traditionally, downscale and less-educated consumers have dominated the "non-landline" segment of the population. In Spring 2000, for instance, the median household income (HHI) for non-landline consumers was 63% lower than the median HHI for the general population, and only 2.5% of the non-landline population had graduated from college, compared to 22.5% of the general population.
Over the last four years, the percentage of households without landlines has sprung back to levels unseen since the late 1980's. According to the 2004 Spring MRI
Survey of the American Consumer, 8.1% of households are now without landlines, and the rate of increase suggests that number will soon exceed
10%.
The non-landline consumers of 2004 are increasingly younger and more upscale than those of 2000. In Spring 2000, the median age for the non-landline population was 23% below that of the general adult population; by Spring 2004, it was 30% lower. The median HHI for the non-landline population rose from 63% below that of the general population to 49% below. And the college graduation rate for non-landline consumers has more than
quadrupled to 11.8%.
Enter the Cellphone
When MRI began to measure cellphones in its Spring 2001 Survey of the American Consumer,
one or more cells were in 51.6% of U.S. households. However, despite such widespread use of cellular technology, only 1.4% of households were "cell-only," meaning
that no landline phone was present.
Since 2001, cellphones have continued to proliferate: according to the Spring 2004
data, 68.9% of households have at least one cellphone, up from 63.8% in Spring 2003. Most households (63.1%) have both a cellphone and a landline, and only 28.6% of households are using landlines exclusively.
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After years of coexistence between cells and landlines, it appears that cellphones have recently begun to contribute to the desertion of landline service. The percentage of cell-only households has risen nearly fourfold in just three years, from 1.4% in Spring 2001 to 5.5% in Spring 2004. Cell-only households now account for 69% of all households without landline phones, compared to 30% in Spring 2001.
Of the 8.1% of U.S. households that do not have landlines, more than
three in ten (31%) are truly "phoneless," having neither a cell nor a landline, down from 70% in Spring 2001. Since cell-only households have significantly higher incomes than phoneless households (median HHI $32,948 v. $16,058), and since cell-only consumers are younger (median age 28.8 v. 38.7), it’s clear that the growth of the cell-only segment explains the recent tilts in the profile of the non-landline population.
Who are the Cell Only Consumers?
Research shows that young males are often early adopters of new technologies, and MRI data indicate that, under the right conditions, they can also be "early deserters" of old technologies. While males represent
48% of the total adult population, they account for 57.6% of the cell-only population. If the traditional patterns hold, these young males may be the leading edge of a larger, more mainstream group of cell-only consumers.
7.9% of single-person households are now cell-only, compared to 5.5% of households in general. More to the point, 16.7% of single-person households in which a cellphone exists are now cell-only. Since cellphones embody the transformation of the phone from a shared household resource into a transportable personal accessory, owners are accessible 24/7 eliminating the need for another phone.
According to the 2004 Spring MRI data, in at least 26.3% of U.S. households (up from 15.3% in Spring 2001), the number of cell phones is equal to or greater than the number of household members (the percentage is likely higher, but MRI currently caps the maximum number of cellphones in its survey at "three or more"). Such households account for 56.6% of cell-only households; they are more than twice as likely as households in general to be cell-only. While 88% of them still have landline phones, that percentage is down 3.1% from a year ago.
Prospects for Continued Growth
MRI numbers are showing that the percentage of households with cellphones is still rising, as is the percentage of households with multiple cellphones. Young, tech-savvy consumers – particularly those who live in single-person households – are abandoning fixed, landline phones in favor of a new cell-only lifestyle.
All indicators point to continued increases in the cell-only population. Whether or not the current advantages of landline phone service, such as clarity, reliability, and data use (fax machines, DSL and dial-up Internet) will be addressed adequately by advancements in cellphone technology will be crucial for establishing a ceiling to the trend.
Marketing Drive Worldwide-Wilton Targets Consumers using Product and Psychographic Data
In an in-store promotional campaign, there is only one opportunity to tell consumers about a brand and persuade them to buy it on the spot. "Retail is where we bring a brand to life," says Kathryn Benedett, co-president of Marketing Drive Worldwide-Wilton, an Interpublic Group company. "Consumers are in a buying mindset and we have one chance to drive a transaction."
Marketing Drive Worldwide-Wilton develops promotional marketing campaigns that stimulate immediate results at retail. Each of their strategies is grounded in thorough research analysis.
Finding the Intersection Between the Consumer, the Brand and the Retailer
The key for successful retail promotions is detailed knowledge of the links between consumers, brands and retailers. "Building traffic and transactions requires an understanding of what motivates the consumer in the channel and within each retailer’s store environment," states Ms. Benedett. "MRI’s data help us create effective campaigns by providing information about consumer preferences, attitudes and responses to specific brands. The unique benefit of MRI is that it lets us see how the consumer reacts differently based upon the retailer they are shopping. In other words, the same consumer has attitudinal differences when shopping Kmart versus Wal-Mart."
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"Advertising builds brand equity. Promotion is about immediately impacting consumer behavior. Our aim is to stimulate immediate purchases while reinforcing brand equity." Marketing Drive Worldwide-Wilton Vice President Strategic Planning |
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As media choices proliferate, consumer shopping behaviors seem to consolidate. "Media is fragmenting," says Jim Cataldi, vice president strategic planning. "But retail, conversely, is tightening; most consumers shop one of a small group of retailers. As a result, the store is an increasingly important place to reach consumers." Marketing Drive Worldwide-Wilton must reach "shared consumers," shoppers seeking a specific brand in a specific store. "Brands know a lot about their own consumers and retailers know about theirs," remarks Ms. Benedett. "MRI provides consumer insight which is common to both the brand and the retailer.
"Targeting customers efficiently -- delivering the right message to shoppers in the right store -- requires broad and accurate research," says Mr. Cataldi. "MRI data let us study the habits of consumers in different environments so we can compare how purchasing behaviors are different in one venue versus another."
Motivating the Mind Through Research
The creative team at Marketing Drive Worldwide-Wilton marries demographic and psychographic data to reach consumers on a personal level. While MRI product data are very important to their campaign development, psychographics round out the picture with information about consumers’ interests and attitudes. "These data as well as other information, such as leisure activities, lead us to develop added-value incentives that speak to the whole consumer," says Ms. Benedett.
In developing a promotional campaign designed to target a national brand’s heaviest users, for example, Marketing Drive Worldwide-Wilton uses MRI data to identify the target consumer segment’s preferred retailers. Once heavy users who shop at a certain retail store are identified, MRI information on how these
consumers spend their leisure time, among other behaviors, can be directly applied to the creative message. In the end, the combination of product data and psychographics provides a clear understanding of the target consumers and how to stimulate them to purchase a product upon seeing a particular promotion in a certain store. "MRI data
help us reach consumers through the retailer more efficiently, and more importantly, communicate more effectively," states Mr. Cataldi.
Concept Testing
Marketing Drive Worldwide-Wilton also relies on MRI for concept testing. They develop ideas grounded in Mediamark data, then conduct projectable web-based tests to measure responses to the campaign. The comparison of MRI information with testing results almost always yields consistent results, confirming the campaigns developed reach target consumers likely to respond to each campaign’s promotional messages.
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Evaluation of Research Practices Presented by MRI Executives
MRI research executives and colleagues presented two papers at the ESOMAR conference in Geneva in June. Mediamark’s Day in the Life outlines a pilot study that measured media usage during a 24-hour period; Developments in the Measurement of Readership Accumulation evaluates readership accumulation in the United Kingdom. Summaries of both papers follow.
Mediamark’s Day in the Life Pilot Study
By Ted D’Amico, Michal Galin (MRI) and Richard Fielding (Starcom Worldwide)
How do American adults allocate their media use over the course of 24-hours? MRI conducted a pilot study to determine how much time Americans spend consuming the Internet, magazines, newspapers, radio and television in a typical day and to test the feasibility of a conducting a full Day-in-the-Life study.
Background
This pilot was developed following preliminary research in Wave 46 (September 2001 through April 2002) of the national
Survey of the American Consumer in which respondents were asked to record the time and place of their media activities from the prior day.
Objectives & Methodology
The Day in the Life pilot study was initiated to determine:
- if respondents who participated in MRI’s national survey would be willing to participate in an additional research phase;
- if media estimates from this pilot correspond to media estimates in MRI’s national survey and other accepted currencies.
The Day in the Life pilot study was conducted by telephone and completed with 1,000 respondents. Interviewing took place between January and February 2004.
Findings
According to the pilot, adults on average spend eight hours and 42 minutes per day engaged in at least one of five measured media. Television is the dominant medium both in terms of time and incidence of use. Order of usage for other media is: radio, the Internet, newspapers and magazines.
Benefits
Hour-by-hour analyses were conducted for each of the five measured media available in the Day in the Life pilot. Results illustrated that these data could be detailed by demography as well as weekday vs. weekend usage by media.
The study also points to the possibility of comparing media estimates found in the pilot to MRI’s national
survey as well as radio and television cume estimates from Arbitron and Nielsen.
Future
In the next few months, MRI will explore the potential of a complete Day in the Life study to help clients fine-tune media and marketing decisions.
The complete paper, Mediamark’s Day in the Life Pilot Study, is available for your review.
Developments in the Measurement of Readership Accumulation
By Julian Baim (MRI) and Alan Higgs (NOP Media)
Agencies and publishers in the United States have long noted the need for more robust and accurate information to quantify the rate at which average issue readership accumulates. This demand is also apparent in the United Kingdom. Developments in the Measurement of Readership Accumulation provides a summary of a recent U.K. readership accumulation study conducted by NOP on behalf of NRS Ltd. As MRI released its accumulation study in the late 1990’s [see Volume 1, 2002 and Volume 4, 2003 issues of The Source for more information], this paper also compares major U.K. newspaper and magazine genres to publication genres from the U.S. study.
Methodology
The study was conducted in the United Kingdom and provides accumulation data for all titles published in the main National Readership Surveys’ volumes. One-week, self-completion diaries were used to record
reading which is comparable to MRI’s study in the U.S. This method allows researchers to record "first-time" and subsequent reading events for specific issues, regardless of the age of a particular publication.
Results
Key findings include:
- National daily newspapers achieve 96% of their readership on the day they are published;
- Weekly and monthly magazines have more shallow accumulation curves than newspapers. The average general weekly magazine is first read in its issue week by 82% of its average issue audience;
- There are significant levels of readership for monthly magazines before the publisher’s on-sale dates, with 4% of the readership occurring in the week prior to the official first appearance; monthly magazines also exhibit the slowest rates of audience accumulation;
- Both the U.K. and the U.S. studies reveal that publication frequency was a major driver in determining the shape of accumulation curves, and weeklies always accumulated faster than monthlies. The exception to this pattern was found among general weeklies – U.S. general weeklies and/or newsweeklies accumulate slower than their counterparts in the U.K.
The complete paper, Developments in the Measurement of Readership Accumulation, is available for your review.
CAPI Initiative Suspended Following Results of Extensive Testing
After extensive testing, MRI has decided to suspend investigation of a Computer Assisted Personal Interview (CAPI) method for its Survey of the American Consumer. While the decision was difficult, extensive testing indicated the potential benefits of a computerized system did not outweigh its negative impact on response rates, a critical indicator of quality in any survey.
| "Extensive
testing indicated the potential benefits of a computerized
system did not outweigh its negative impact on response
rates." MRI Chief Research Officer Julian Baim |
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MRI was one of the first companies to test computerized implementation of its national survey some ten years ago. The original concept, CASI (Computerized Self-Administered Interviewing), was to develop an improved measurement system using the digitized audio and video capabilities offered by computers. In effect, the computer presentation would replace the logo card administration in the paper and pencil version. MRI shared the findings of these tests at two Worldwide Readership Symposia, but declined to pursue this approach further. Instead, we concentrated our efforts on CAPI, a more limited approach in that while the questionnaire would be electronic, respondents would continue to sort logo cards and use a sort board.
CAPI, as it has been employed in other studies, provides numerous quality control advantages. Among these benefits are ensuring the proper sequencing of questions and the elimination of a separate data entry function. In addition, researchers can analyze question-time variations among interviewers to establish quality control criteria. At the same time, CAPI, a new and perhaps unfamiliar technology to both respondents and interviewers, posed a potential risk of losing cooperation from prospective respondents.
MRI has been investigating interviewers’ use of Fujitsu PenTablets to collect data since 2001, encouraged by its successful implementation by other research suppliers, including the U.S. Bureau of the Census. The technology also has been used to administer magazine readership studies in Europe. However, MRI’s
national survey required more complicated programming than its European counterparts (in part because Mediamark’s
survey is longer and measures a variety of different media).
MRI was keenly aware of the differences between our study and those of the organizations already using CAPI, and it was important for us to investigate the technology‘s compatibility in meeting our unique requirements.
MRI’s CAPI investigation included qualitative tests and a response rate test that compared response rates of matched samples of respondents in similar geographic clusters. CAPI’s negative impact on data collection was remarkable: among interviewers using the computers, response rates dropped ten percent compared to those using paper and pen.
"These findings tell us that CAPI, as it is presently designed, does not provide sufficient benefits to outweigh its harmful effects on our historically high response rates,"
says MRI Chief Research Officer Julian Baim. "At the same time, we still believe strongly that technology provides the basis for improving our procedures and we will continue to explore opportunities in these areas."
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