I ended my series of posts about the iSelect PR with one talking about an article in The Economist that flagged the specific issue of PR agents paying bloggers and experts to "spruke" their product.
Tonight the ABC's Media Watch picked up specifically on the Charlie Brown angle.
Adding up the unthinking reprinting of the release, the reporting of research not released and clearly unreliable and the dodgy promotion by a blogger/tech editor and you have in one piece everything wrong with PR and a lot of what passes as journalism.
Novae Meridianae Demetae Dexter delenda est
Showing posts with label Public Relations. Show all posts
Showing posts with label Public Relations. Show all posts
Monday, May 30, 2011
Wednesday, May 25, 2011
Consumer behaviour, economics and research methodology
I've had some fun with the iSelect media release that purported that the "iSelect Broadband Report" had been released but wasn't.
I now want to talk about its central thesis, the comment attributed to Charlie Brown that;
Australians need to do their homework on broadband before signing up to a new contract. It doesn't need to be time consuming or difficult - if you use an online comparison service, you can evaluate plans based on your actual needs to find the best one for you.
This, of course, means use a site like iSelect. The size of the prize seems to be quite impressive - the whole $141,313,506.15 that they absurdly tell us will be saved. As I've elsewhere noted we are given no information on how this amount is derived.
We aren't even told over what time period this saving is made, but it looks to be an annual amount. Still a big number, but we are also told there are 7.5 million households subscribing to the internet. That's a saving of under $20 per household.
Economists who talk about anything other than theoretical non-existent markets will tell you that "search costs" are a significant factor in consumer behaviour, and that consumers will use other things, like brand and referral as substitutes. The iSelect research tells us that, on average, we shouldn't exert more than $20 worth of extra search costs in choosing broadband provider.
Their pitch of course is that their site significantly improves your search capability. Having had a look at it it is a proposition that certainly wouldn't be true for me, though it may be for other consumers.
More significantly the release reveals that "Not surprisingly, most people (66 per cent) say that reliability and maintaining connection are the most important features of a home internet service." This is something that price comparison sites provide no assistance with.
The release also says "Less than a quarter (24 per cent) understand how the speed of their broadband connection is measured (megabits per second), yet 86 per cent say speed is very or extremely important to them." This means the consumers are actually savvy, because the access speed tells you nothing about the contention ratios in the ISPs network. Users judge speed by how fast things happen on their screen not how many bits can flow from their modem to a network access point per second.
There also seems to be an unexplained discrepancy. The release cites the ABS statistic of 7.5M households with a non-dial up connection. Technically speaking this is reported by the ABS as 7.595 and should be rounded up and represents the bulk of the 9.739 million non-dial-up connections.
But the ABS also reports download stats. They report 191,655 Terabytes of data downloaded for the entire three months prior to the report date (31 Dec 2010). That is a grand total of 19 GB of download for the entire quarter for every broadband connection, or just over 6 GB per month.
Yet the iSelect release asserts "Australians are on average downloading more than 48 gigabytes of data per household per month." This is a massive discrepancy between the result from the iSelect research (presumably based on user self-reporting) and the ABS statistic (which is based on data provided by ISPs). Two potential causes of that discrepancy could be errors in the self-reporting of download usage or a very statistically non-representative sample.
The position marginally improves though if the vast gap between fixed and wireless downloads is included (see graph) but 31 GNB in a quarter is still less than 25% of the rate claimed by iSelect.
I'm not sure I have the energy for another round of questions to iSelect.
Novae Meridianae Demetae Dexter delenda est
I now want to talk about its central thesis, the comment attributed to Charlie Brown that;
Australians need to do their homework on broadband before signing up to a new contract. It doesn't need to be time consuming or difficult - if you use an online comparison service, you can evaluate plans based on your actual needs to find the best one for you.
This, of course, means use a site like iSelect. The size of the prize seems to be quite impressive - the whole $141,313,506.15 that they absurdly tell us will be saved. As I've elsewhere noted we are given no information on how this amount is derived.
We aren't even told over what time period this saving is made, but it looks to be an annual amount. Still a big number, but we are also told there are 7.5 million households subscribing to the internet. That's a saving of under $20 per household.
Economists who talk about anything other than theoretical non-existent markets will tell you that "search costs" are a significant factor in consumer behaviour, and that consumers will use other things, like brand and referral as substitutes. The iSelect research tells us that, on average, we shouldn't exert more than $20 worth of extra search costs in choosing broadband provider.
Their pitch of course is that their site significantly improves your search capability. Having had a look at it it is a proposition that certainly wouldn't be true for me, though it may be for other consumers.
More significantly the release reveals that "Not surprisingly, most people (66 per cent) say that reliability and maintaining connection are the most important features of a home internet service." This is something that price comparison sites provide no assistance with.
The release also says "Less than a quarter (24 per cent) understand how the speed of their broadband connection is measured (megabits per second), yet 86 per cent say speed is very or extremely important to them." This means the consumers are actually savvy, because the access speed tells you nothing about the contention ratios in the ISPs network. Users judge speed by how fast things happen on their screen not how many bits can flow from their modem to a network access point per second.
There also seems to be an unexplained discrepancy. The release cites the ABS statistic of 7.5M households with a non-dial up connection. Technically speaking this is reported by the ABS as 7.595 and should be rounded up and represents the bulk of the 9.739 million non-dial-up connections.
But the ABS also reports download stats. They report 191,655 Terabytes of data downloaded for the entire three months prior to the report date (31 Dec 2010). That is a grand total of 19 GB of download for the entire quarter for every broadband connection, or just over 6 GB per month.
Yet the iSelect release asserts "Australians are on average downloading more than 48 gigabytes of data per household per month." This is a massive discrepancy between the result from the iSelect research (presumably based on user self-reporting) and the ABS statistic (which is based on data provided by ISPs). Two potential causes of that discrepancy could be errors in the self-reporting of download usage or a very statistically non-representative sample.
The position marginally improves though if the vast gap between fixed and wireless downloads is included (see graph) but 31 GNB in a quarter is still less than 25% of the rate claimed by iSelect.
I'm not sure I have the energy for another round of questions to iSelect.
Novae Meridianae Demetae Dexter delenda est
An even more recent update on iselect
The nice man from iSelect Corporate Affairs has just rung me to inform me that he disagrees that the media release purports that there is something more to read. The proposition is that "the research has been released through the media release".
I am grateful for the information. He has at least pointed me to the full release on the company website. It is interesting how this varies from the versions on various newsfeed sites like Press King. I am also aware that at least one media organisation only received a version through one of these sites that did not include the footnotes on how the research was conducted.
These footnotes make interesting reading. The third footnote provides details on how the "research" was conducted (naming the firm and as a sample of 1000 households). Three of the footnotes though look like the additions of a zealous fact checker. Three amounts in the release ($141M overspend, 368 million gigabytes and $200 for data) are carefully reproduced as actual numbers to the last cent or Gigabyte below. It is hard to know which is really more misleading - given that the representation to the cent represents an assertion of accuracy beyond the bounds of the survey methodology. The correct way to footnote the data points from a survey is to quote the data point and the estimated sampling error.
I will stand by my view that the first and third paras of the release assert that a thing called the "iSelect Broadband Report" has actually been released, not just a set of data drawn from that research.
But my real gripe is with the media outlets that churned out the data from this release without asking to see the basis of the report. I am still at a loss to understand the basis of the assertion of the $141M overspend. My guess is that the research asked people what their current plan and usage was, looked up the best plan on the iSelect site and made the straight comparison. But we don't know because we are not told.
I will save for another post a comment on the economics.
Novae Meridianae Demetae Dexter delenda est
I am grateful for the information. He has at least pointed me to the full release on the company website. It is interesting how this varies from the versions on various newsfeed sites like Press King. I am also aware that at least one media organisation only received a version through one of these sites that did not include the footnotes on how the research was conducted.
These footnotes make interesting reading. The third footnote provides details on how the "research" was conducted (naming the firm and as a sample of 1000 households). Three of the footnotes though look like the additions of a zealous fact checker. Three amounts in the release ($141M overspend, 368 million gigabytes and $200 for data) are carefully reproduced as actual numbers to the last cent or Gigabyte below. It is hard to know which is really more misleading - given that the representation to the cent represents an assertion of accuracy beyond the bounds of the survey methodology. The correct way to footnote the data points from a survey is to quote the data point and the estimated sampling error.
I will stand by my view that the first and third paras of the release assert that a thing called the "iSelect Broadband Report" has actually been released, not just a set of data drawn from that research.
But my real gripe is with the media outlets that churned out the data from this release without asking to see the basis of the report. I am still at a loss to understand the basis of the assertion of the $141M overspend. My guess is that the research asked people what their current plan and usage was, looked up the best plan on the iSelect site and made the straight comparison. But we don't know because we are not told.
I will save for another post a comment on the economics.
Novae Meridianae Demetae Dexter delenda est
An update on the iselect PR
In my post about PR I promised to update my readers when I heard back about my request for the research that iselect was claimed to have released.
This prompted a call to me by their Corporate Affairs Manager today who wanted to know what exactly I want and why I might want it. I advanced the proposition that while I was most interested in being able to interrogate the claimed "$141M overspend", how it had been estimated and its veracity, I was particularly seeking the "research" which the PR claimed had been "released".
I advanced the somewhat odd idea that you can't claim to have released something without actually having done so. The nice Corporate Affairs man has to consult with "other people" to see how he deals with my request.
The nice man also managed to completely deflate my ego by asking exactly who I am and what my company does. I explained that he can find out about the regulatory management services I offer at the Havyatt Associates website, that I am a blogger and that I write an occassional column for itNews. I further explained that my inquiry wasn't being made on behalf of anyone else, just my own interest.
It did provide an interesting insight though - they can't be tracking themselves too well. Googling the exact phrase "iselect" for the last 24 hours had yesterday's blogpost as the last item on the page.
Note: In case you think I'm being a little harsh, I can tell you that I have been responsible for very similar releases that want to refer to research data. I have in the past had to explain to my employers that if you say the research is released then you have to release it.
Novae Meridianae Demetae Dexter delenda est
This prompted a call to me by their Corporate Affairs Manager today who wanted to know what exactly I want and why I might want it. I advanced the proposition that while I was most interested in being able to interrogate the claimed "$141M overspend", how it had been estimated and its veracity, I was particularly seeking the "research" which the PR claimed had been "released".
I advanced the somewhat odd idea that you can't claim to have released something without actually having done so. The nice Corporate Affairs man has to consult with "other people" to see how he deals with my request.
The nice man also managed to completely deflate my ego by asking exactly who I am and what my company does. I explained that he can find out about the regulatory management services I offer at the Havyatt Associates website, that I am a blogger and that I write an occassional column for itNews. I further explained that my inquiry wasn't being made on behalf of anyone else, just my own interest.
It did provide an interesting insight though - they can't be tracking themselves too well. Googling the exact phrase "iselect" for the last 24 hours had yesterday's blogpost as the last item on the page.
Note: In case you think I'm being a little harsh, I can tell you that I have been responsible for very similar releases that want to refer to research data. I have in the past had to explain to my employers that if you say the research is released then you have to release it.
Novae Meridianae Demetae Dexter delenda est
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