When Joel Goldhar worked in his father's neighborhood grocery store during the 1950s, market research was done over the deli counter.
"My father would say to the customers we knew best: 'I've got a lot of baloney in the store this week. I can give you some a little cheaper if you'd like,' " says Mr. Goldhar, who delivered food for the Albany, N.Y. mom-and-pop business. "We learned what people liked and also what they could afford just by getting to know each customer."
A half century later, most large- and small-business owners don't know individual customers by name, nor whether they prefer pastrami to prosciutto.
In an increasingly impersonal age, they rely on a more distant brand of research for answers.
But marketers may have found a way to regain that personal touch, and from a highly impersonal source: technology.
From measuring brain waves to shaping psychological profiles of online behavior, companies are using high-tech innovations to probe deeper into consumers' lives and preferences than ever before.
"Marketing is getting to be so expensive, you cannot afford to make a mistake," says David Hunter, president of Capita Research Group. As a result, "more and more money will be spent on more accurate measurement systems that use technology."
Results from focus groups and phone surveys - techniques used for generations - are often imprecise. Despite $7 billion in annual spending on market research, most new products fall flat as corporate heads struggle to gauge the public's taste.
But Capita hopes to produce better results with its latest research innovation: a high-tech headset volunteers wear while they watch or listen to commercials produced by Capita clients. The device measures a person's attention level, the company claims, and can detect whether the ad makes an emotional connection with the guinea-pig viewer. If it does, the ad will probably draw in television viewers, too, Capita argues.
Sabrina Connoly of Blue Bell, Pa., recently strapped on the headset for a TV/radio-ad survey. She says wearing the headset, which resembles Walkman earphones, wasn't weird, but that some of the results were surprising.
"There were parts when the diagram showed my interest had dropped, but I thought I was still tuned in," Ms. Connoly says. "I knew that I was focused at some points, though, especially when they played the '80s music station, which probably took me back to my college days.
"This would be a good way to measure whether your husband is listening to you," she quips.
The prospect of having scientific data to make marketing decisions has understandably piqued the interest of executives looking to slash advertising costs. Mr. Hunter estimates companies spend about $7 million to produce and air a single TV commercial nationwide.
"The cost of getting someone's attention these days has skyrocketed," he says. "If your commercial isn't effective at gathering attention, you can waste millions."
Capita's pursuit of information will soon take it into the living room. It's latest technology allows viewers at home to transmit the headset data like an e-mail message to company analysts.
The consequence of this and other technologies is clear: volumes more of more-accurate data. For many market-research veterans, the field is finally living up to its potential as a true social science.
According to Boston University marketing professor Michael Elasmar, competition in the New Economy has made the difference. "As corporations grow bigger and bigger, and competition increases, they're asking more for hard evidence that would justify doing [an advertising] campaign one way or another," he says.
A Web of information
The Internet is perhaps the greatest boon to marketers, who see it as a two-way mirror into consumer behavior. Companies not only collect massive data on Internet users, they record what surfers do online, including what products they buy and why.
"Internet technology allows you to track every keystroke, every Web site a person visits. There's the assumption that every site you visit says something about you," says Goldhar, now a professor of marketing at the Illinois Institute of Technology in Chicago.
Internet companies can assign an identification number to any computer using their Web sites in order to track people's behavior. Eclectic retailer
The Sharper Image uses a dynamic browser in its Web site that recognizes the computer user's ID number, watches what he or she does, and adjusts accordingly. If someone browsing on the site links to a list of the store's CD storage racks, for example, the home page might change to display graphics of its latest CD players.
Bearing witness to the trend, comScore Inc., a market-research firm in San Francisco, has tailored its analysis to the behavior of online denizens. With the aid of a special server connection and a package of incentives, the company has collected data on the continuous Web habits of more than 3 million volunteers.
"Sites know a lot about what their visitors are doing, but lose track of them when they go to a different Web page," says Gian Fulgoni, who launched the company in September. "Unless you know where they go afterwards, it's a struggle to understand if you've got loyal or nonloyal buyers and why."
With the technology at hand, marketers are looking beyond demographic groups and directing their messages straight to the individual.
"These days it's important to know a lot about one customer, one family," says Goldhar. "[Companies] create a marketing mix of the product and price, channeled to the unique needs and wants and economic resources of that particular individual and family."
Not so anonymous
It is, ironically, the anonymity of the Web and other technologies that allows researchers to get up close and personal. But some experts warn that research, be it in an advertising office or online, isn't always appropriate, and that new technologies threaten personal privacy.
Technology "offers a service because it ultimately helps people find the products and services they want," says Mr. Elasmar. "But some organizations know more about you than you know about yourself. The images of 'Big Brother' become sharper and sharper when you think of this scenario."
Andrew Shen, a policy analyst at the Electronic Privacy Information Center, says researchers are jeopardizing the future of e-commerce if they fail to strengthen their privacy safeguards.
"One thing that has made the Internet a successful medium is the ability to search out information you wouldn't otherwise search for without anonymity. Many people will just not go online when they learn their privacy is at risk."
No laws prevent companies from selling personal information gathered on the Web. As a result, some failed dotcoms have attempted to sell user information to help pay their debts.
Internet surfers are not defenseless, however. And various protections exist that can help consumers safeguard anonymous browsing. (See story, opposite page.)
(c) Copyright 2000. The Christian Science Publishing Society