Marketing research heads to Vegas
Sunday, September 29, 2002
LAS VEGAS -- When Linda Pulido visited Las Vegas, she never expected to help decide who'd be the next anchor on a morning television news show.
But Pulido found herself giving her opinion about who was hot, and who was not, during a screening at CBS' Television City, part of the network's market research operations that's located at the MGM Grand hotel.
"I thought it was pretty cool. I'd do it again," said the Laredo, Texas, resident. "It makes you feel like maybe your little opinion might mean something and might count to some big corporation somewhere."
With an estimated 36 million tourists a year, Las Vegas is becoming the city of choice for market researchers to gather consumer opinions on products from pizza to diapers, and on media offerings from television shows to commercials.
"That's what drives this industry," said Lee Medick, president and owner of MRCGroup Research Institute. "Companies make million-dollar decisions based on what people think."
Finding out what people are thinking is a booming industry that generates an estimated $6.1 billion annually. Dollars spent on market research have grown steadily since 1991 except for dips in 1996 and 2001, said Larry Gold, editor and publisher of Inside Research, a Chicago-based industry newsletter.
When Medick and her husband, Jim, who is MRCGroup's chief executive officer and managing director, moved their 10-year-old company to Las Vegas in 1996, others in the industry were shocked, Jim Medick said. But the Medicks found only a few similar companies in Las Vegas, and a virtually untapped source of consumer opinion.
Las Vegas as a haven for market research makes sense, said Nancy Costopulos of the Chicago-based American Marketing Association.
"People go to Las Vegas for a reason, and that's usually to be entertained," she said. "So by testing people who are there seeking entertainment, you have a steady stream of consumers who are right for your test market."
With its fast-growing population in addition to tourists from across the nation, Las Vegas also brings an instant cross-section of the country to one location. Analysts say it also provides a fresh test market in which consumers haven't been surveyed as much as those in Los Angeles or New York.
Ten years ago, CBS set up a temporary test site in Las Vegas to supplement its other test cities and found a perfect match. Last year the network opened Television City, a permanent site in the MGM Grand in which consumer critics like Pulido can screen new television shows and movies and participate in focus groups.
The diversity found in Las Vegas was a big draw, said David Poltrack, CBS executive vice president of research and programming.
"It's something you can't do anywhere else but Vegas because of all the demographics," he said.
Viewers receive coupons good for 10 percent off CBS merchandise and other freebies, as well as an opportunity to help change television programming.
That attracted Paul Rudzinski of Austin, Texas, who like most TV viewers, has a few gripes about what's on the tube.
"If it's about cops, lawyers or doctors, I'm going to be automatically against it," Rudzinski said before going into a screening at Television City. "That's all there is on TV today."
Laugh tracks -- when laughter is dubbed in -- get a thumbs down from him, too.
More wholesome, family oriented shows should be on TV, said Phyllis Tucker-Saunders of Laurel, Md. "There needs to be more shows like Cosby and less sex," she said.
Such feedback is what media executives crave. NBC is negotiating with MRCGroup to open a site similar to Television City at another hotel on the Las Vegas Strip.
Consumers' conclusions about products, services and shows can be the deciding factor in whether companies pursue their projects or try something else. With so much riding on the test results, market research companies sometimes go to great lengths to keep client projects secret.
MRCGroup conducts research for clients in a variety of industries on products that include chocolate, diapers, slot machines and kitty litter, the Medicks said.
But despite all the testing, box-office and market flops can't always be prevented, said Gold, the Inside Research editor and publisher.
"Nothing is guaranteed," he said, chuckling. "Life is that way. What you're trying to do is reduce risk."