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In the business world, an untested idea is a bad idea. Before spending millions of dollars designing, manufacturing and marketing a product, companies first have to figure out whether anyone even wants to buy it. That process is called market research.
Market research is big business. American companies spend billions of dollars each year on focus groups, product testing, interviews and surveys — all in an effort to determine which logo is the catchiest, which flavor of potato chip is the most addictive and which pop song will be the next big hit
To save time and money, many companies are turning to online market research. Surveys, in particular, can easily be conducted online or over e-mail. The cost of a 200-person, e-mail survey is $2,500 to $5,000. To get the same number of responses from a snail mail survey would cost between $5,000 and $7,000, and phone surveys can run as high as $15,000
Large American nonprofits spend at least $7.6 billion per year on marketing and public relations, and may in fact spend a great deal more, according to the Changing Our World analysis of 71 nonprofits with annual revenues of $10 million or more per year. Itemized examination of IRS Form 990 Line 43, where marketing and communications expenses reside, resulted in an extrapolated estimate of $7.6 billion for the sector.
For instance, total spending on public relations in the U.S. reached some $3.7 billion last year, according to Veronis Suhler Stevenson, a New York investment bank that specializes in media. Contrasts that with the total advertising spend of the largest consumer company, Proctor & Gamble, which spends $4 billion per year on advertising, according to the Economist, part of the overall $190 billion U.S. ad spend
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