Global Market Research Report: A Tale of Two Industries

Editor’s Note: ESOMAR performs many valuable services for the industry; the Global Market Research Report is one of them. The slowdown they report in the traditional sector of the business, while there is growth in the new sectors, should not be surprising to observers of the trade, and has been forecasted for some time now. The world has indeed changed, and it’s not over yet!

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Watching the results coming in for this year’s ESOMAR Global Market Research (GMR) report was a fascinating time. A year ago, we were reporting continued growth in both traditionally defined research and in the newer analytics-based methodologies – although growth had certainly slowed down in the traditional research sector. However, this year we see, after many years of growth, a decline in the research sector, as originally defined. 

As this became apparent from the data coming in, it felt like a watershed moment in our evolving definition and measure of the research, data, insights and analytics market. The extended research industry (including not only conventional market research but also the (re)use of existing data and analytics) is now valued just shy of $80 billion globally, up from $76 billion in 2017. The ‘conventional’ research sector, now valued at a little over $47 billion, posted a healthy 2.1% rise. However, the impact of inflation is significant and reveals a more stagnant picture, reversing the trend to a slightly negative -0.3%. 

However, while the industry (using the original definition) reported a net decrease, the data analytics industry and insight counterpart show a remarkable increase of more than 10% compared to 2017. What’s more, the value of these methodologies has, historically, been approximately 80% of the value of the traditionally defined market research sector. Not so this year, where both areas are almost equal. 

There are a number of reasons for this; the growth of tech-enabled systems, automation and differing definitions of what is and what is not included in these different areas of our business are a few of the contributing factors. What is clear, however, is that the industry is transforming.  2019 will mark a turning point in the industry as the year in which data and analytics represent a higher turnover than conventional market research. 

North America

In a pattern that has been present for some time now, North America shows the ambivalence of its two very distinct geographical markets. On the one hand, the US reports a healthy, positive absolute growth rate of +2.6% that remains positive even after taking inflation into account (+0.1%). Canada, on the other hand, is immersed in the domestic challenge of adapting to a changing industry and thus reported flat growth that turns negative (-2.2%) after inflation is accounted for. 

Throughout the years, the US has been one of the most resilient markets and is currently one of the most dynamic ones, not only embracing the consolidation of new players related to new technologies but welcoming them, as evidenced by the US$ 4 billion expenditure in the analytics sector. However, at just +0.1%, industry growth (discounting the effect of inflation) was markedly lower than the optimistic +4% forecasted for 2018. Throughout 2019, it will be interesting to see whether the sector reaches the +3% growth level currently forecasted by the market commentators. 

Canada, on the other hand, is experiencing similar strains to other markets and presents a flat absolute growth that declines to -2.2% after inflation. Estimates for turnover, however, may be revisited in the future thanks to improved support for the industry by the new trade body – the Canadian Research Insights Council – which succeeded the MRIA (which regretfully declared bankruptcy in 2018). 

Outlook for 2019

Predictions for 2019 appear more positive, with a higher number of respondents expecting the industry to expand further than was witnessed in 2018. For those respondents who have predicted their industry to shrink during 2019, this presents a double reality: on the one hand, the instability brought along by political, social or economic uncertainty affects primarily smaller, more traditional industries. On the other, the challenges of adapting to a new industry model affect developed industries that are sometimes unable or slow to react swiftly to these changes. 

However, if the last few years of socio-economic and political upheaval has taught us anything, it’s the difficulty in predicting what will happen over the course of a year. What we can say for certainty, is that it will be fascinating to see how our expanded industry develops.