Page 284 - Introduction to Electronic Commerce and Social Commerce

270 9 Marketing and Advertising in E-Commerce

Limitations of Online Market Research technology for market research involves social and legal
and How to Overcome Them acceptability.
Mobile market research is a method of collecting data
Online market research has technical and behavioral limita- though mobile devices including mobile phones, smart-
tions. One technical problem with online market research is phones, and tablets. Typical methods for collecting informa-
that there may be an abundance of data. To use data properly, tion are through apps, short message systems (SMS), WAP,
one needs to organize, edit, condense, and summarize them. mobile Web, and location-based services. A major advantage
However, such a task may be expensive and time- consuming. of mobile market research is that it can be conducted virtu-
One solution to this problem is to automate the process by ally anywhere at any time. However, it does suffer from the
using data warehousing and data mining. The essentials of limitation that it is hard to define the sampling frame and
this process, known as business intelligence, are provided in cannot access the sample without the users’ mobile devices.
Online Tutorial T3 and in Sharda et al. (2015). Privacy protection is another key concern for conducting
Behavioral limitations of online research methods are mobile market research. Hence, an organization called
responding biases, sample representatives that are hard to ESOMAR has released guidelines for conducting mobile
control, and the ethics and legality of Web tracking. As Web- market research (esomar.org).
based surveys often use an “open call” to recruit respondents,
the response rate is hard to know and the respondent control
is limited. Anonymity in Web-based surveys may encourage SECTION 9.3 REVIEW QUESTIONS
people to be more honest in their replies. However, anonym-
ity may result in the loss of valuable information about the 1. Describe the objectives of market research.
demographics, preferences, and behaviors of the respon- 2. Describe the role of transaction logs and clickstream
dents. To overcome some of the above limitations, online analysis.
market research methods need to be designed carefully and 3. Define cookies, Web bugs, and spyware, and describe
rigorously. Small companies without proper expertise may how they can be used in online market research.
outsource their market research to large and experienced 4. Describe how the issue of privacy relates to online market
companies that have specialized market research depart- research.
ments and expertise. 5. Describe the limitations of online market research.
6. Describe how biometrics and smartphones can improve
Privacy Issues in Market Research market research.

Collecting data from customers, sometimes without their
knowledge, may constitute an invasion of privacy. For an over- 9.4 WEB ADVERTISING
view, guidelines, and standards, see esomar.org/knowledge-
and-standards/codes-and-guidelines.php and marketing Advertising on the Web plays an extremely important role in
research.org/issues-policies/mra-code-marketing-research- e-commerce. Internet advertising is growing very rapidly,
standards. especially in B2C, and companies are changing their adver-
tising strategies to gain a competitive edge. Since the Internet
provides interactivity, online ads are also useful for brand
Biometric and Smartphone Marketing Helps building directly through response ads. Based on a 2014 IAB
Market Research Internet Advertising Report conducted by the professional
service network PricewaterhouseCoopers (pwc.com), online
Many households have several users; thus, the data collected ad revenue reached a record high of $42.8 billion in 2013 in
may not represent any one person’s preferences (unless, of the United States alone, which is a 17% increase from the
course, we are sure that there is one user per device, as in the previous year, while mobile advertising increased by 110%
case of smartphones). Potential solutions are using biometric to 7.1 billion in the United States in 2013 (see iab.com/wp-
marketing or smartphones to access individuals. content/uploads/2015/05/IAB_Internet_Advertising_
A biometric is one of an individual’s unique physical or Revenue_Report_FY_2013.pdf). The Internet advertising
behavioral trait that can be used to authenticate an individ- revenue surpassed $40.1 billion of broadcast television and
ual. By applying the technology to computer users, we can $34.4 billion of cable television.
improve security and learn about the user’s profile. The Search, display/banner ads, and mobile ads are the three
question is how to do it. Indeed, there are programs by most popular types of Internet ads. Social media advertising
which users identify themselves to the computer by biomet- is another fast growing area. A market research organization,
rics, and these are spreading rapidly. Note that utilizing the eMarketer (2013), reported social media advertising revenue