The Future of Marketing Is Looking at You

Inside a converted Schwinn bicycle factory near Chicago's Loop, a team of young social scientists -- anthropologists, ethnographers, art historians -- is huddled around TV monitors and computer-controlled editing decks. They've been staring for hours at streams of video, sharing their impressions and cataloging thousands of images.

This film is no Academy Award nominee. It is cinema verité -- unedited tapes of commuters in three cities pulling into self-service gas stations, filling their tanks, and buying coffee from the convenience store. To these researchers, though, the video is every bit as engaging as the most intricate Hollywood thriller -- full of complex patterns, hidden meanings, clues about human behavior. Do people intuitively grasp how to use the pump and where to pay? If not, do they read the instructions or simply fumble around until they get it right?

Welcome to the watchful world of E Lab Incorporated (http://www.elab.com), a small market-research and design firm with big aspirations. The company is only two years old, but it is at the forefront of a growing movement to rethink how companies understand customers and create products that meet their needs. Its clients include some of the best-known names in technology and consumer products: Hallmark Cards, McDonald's, Steelcase, Texas Instruments.

E Lab's message is as simple as it is subversive. Nearly all the tools of conventional marketing -- focus groups, customer surveys, segmentation -- are designed to measure what people think. But the secret to breakthrough innovation, E Lab believes, is understanding how people behave: what they do and how they live.

"It's not 'the product' that matters," says Rick Robinson, 37, an E Lab cofounder. "People use products to make meaning in their lives and make statements about who they are." Customers often can't articulate those connections, he adds, "because meaning isn't always a matter of conscious belief. You can't just listen to what people say. You have to understand how they interact with their environment and with other people. That's why you have to watch."

"This is new territory," adds John Cain, 33, another E Lab cofounder. "Marketing is a science. There's syndicated research, data on attitudes and intentions. But something is missing -- information about real behavior in real situations. We shoot video to understand patterns of behavior and explore how people actually use things."

What can others learn about the future of marketing by watching how E Lab watches customers? Consider its work with Thomson, the French company that sells consumer products in the United States under the RCA and GE brands. Thomson recently came to E Lab with a new technology for storing, accessing, and playing digital music -- an innovation both sides believe can become The Next Big Thing. But even the most powerful technology can't guarantee success in a hypercompetitive market like home entertainment. That requires new insights into when, where, and how people interact with music.

It was E Lab's job to generate those insights. First, the company conducted in-depth interviews with potential users in three cities. Researchers followed people around their homes -- from the living room to the laundry room, from the basement to the garage -- and carefully noted where they kept their audio equipment and how they organized their music collections. Ethnographers also shot 60 hours of "guerrilla video" in public places -- people listening to music on sidewalks and buses, in record stores and malls.

Then it was time to go broader and deeper. E Lab mailed disposable cameras to potential customers and asked them to photograph the audio equipment in their dens, bedrooms, cars, boats -- essentially wherever they listened to music. To understand how listening patterns changed depending on the circumstances, E Lab provided other people with beepers. Researchers beeped participants as early as 9 :00 AM, as late as 10:30 PM, and as often as seven times a day. When their beepers sounded, participants took out a company-supplied notebook and answered questions about their listening habits. The questions probed for context (are you alone?), mood (are you feeling happy or sad?), even decision-making patterns (who picked the music?).

Research this exhaustive generates massive amounts of raw data. The challenge is to organize the data in ways that help explain what Robinson calls "the practice of everyday life." Here, too, E Lab has created a distinctive set of tools. When it comes to analyzing video, researchers can spend as long as one month studying hundreds of hours of images frame by frame. As they watch, they use proprietary software called CAVEAT (Computer-Aided Video Ethnography Analysis Tool) to index the images by activity, environment, type of interaction, and user experience.