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The Ugly Duckling That Was Market Research

With new tools in consumer ideation and co-creation combined with lightning fast big data analytics, Market Research is evolving from an ugly duckling to a beautiful swan.

By Kevin Lonnie

I found it fascinating that an October 2012 PricewaterhouseCoopers review on the size of the UK Market Research industry found it to be 50% larger than previously estimated!

Holy smokes, what’s going on here?  According to the latest Honomichl Report, our industry is only growing by low single digits.

The answer is in how you define Market Research.  According to the report “The Business of Evidence” the traditional definition of MR no longer applies.  Apparently, there are a lot more firms and organizations undertaking research activities than had been previously thought.

Is this all nothing but good news?  Well, if you’re clinging to a comeback for traditional MR data collection, you’re out of luck.  That part of our industry is dying a slow death.  Traditional MR is akin to the local music or book store.   Take a look at all those empty Borders & Tower Records stores.

The newer, broader interpretation of MR appears to encroach on the realm of Business Intelligence and Competitive Intelligence.  (see Wikipedia Definitions below).  If Social Media Research and Big Data are placed under the header of MR, then we have significantly grown our industry at the expense of other forms of market intelligence.

What I’m suggesting is that all the narrow definitions we have held ourselves to are moot.  With new tools in consumer ideation and co-creation combined with lightning fast big data analytics, MR is evolving from an ugly duckling to a beautiful swan.

Business intelligence

Business intelligence (BI) is defined as the ability for an organization to take all its capabilities and convert them into knowledge. This produces large amounts of information that can lead to the development of new opportunities. Identifying these opportunities, and implementing an effective strategy, can provide a competitive market advantage and long-term stability within the organization’s industry.


Competitive intelligence

From Wikipedia, the free encyclopedia

A broad definition of competitive intelligence is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.

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8 responses to “The Ugly Duckling That Was Market Research

  1. I would like to know where you got the stats that says traditional MR is “dying a slow death”. Nothing I have seen shows this to be the case. To add big data analysis to MR is wishful thinking. Very few MR companies will be able to match the consultant driven analytics business growth provided by the IBM, Accentures and specialist data analysts which will dominate this business. Data accessed by these analysts is internal and has lots of confidentiality issues around it. That is why consultants have an edge because they are seen to be highly ethical, not that MR suppliers are not. The problem with MR is it is seen as mostly involved with external data sources. A few companies may get into this business but at the end of the day will they really be MR or big data guys? Conjoint was pioneered by MR companies in the 1970’s and 1980’s, but by the 90’s it had become a “super intellectual tool “of the consultants who truly had no particular skills to offer. The reality is that MR is not going to be able to play in this big data business simply because it is not seen as big data skilled. No amount of this type of back-patting will overcome client perceptions I am afraid. I have been in and out of that data analytics business for years but business always come back to the same thing – “well the management were more confident to use McKinsey (at three times your price)”. It will only be companies that devote extensive and large scale departments to this that will compete with consultants. Would you buy such services from Boston Consulting or Kantar or Nielsen? I think the answer is obvious.

  2. Hi Chris,

    You seem to be making two distinct points. The first being you see no evidence that traditional MR is in decline. And the second being that big data analytics and the potential windfall associated with such analyses will be dominated by the high profile consulting firms.

    OK, let’s take up the 1st point. What stats do I have that says MR is dying a slow death? Well, have you seen anyone start a WATS Facility in the US? Or have you talked to a facility owner who is bullish about their rentals?

    OK, how about some facts to back this up. For that I’ll turn to the latest GRIT Report. It states that 2/3rds of clients and suppliers expect the products and services they deliver will change in the next five years. And more than half of both suppliers and clients expect fewer field interviews. Furthermore 2/3 of MR suppliers are providing social media monitoring to their clients. So with all this change and movement towards observational learnings, where does that leave traditional MR? All that money and movement has to be coming from something? If you want to bet on the future of traditional MR, you might want to open up a record store in your town. And you point out yourself the rise of big data analytics. If a firm decides to take up Boston Consulting on their ability to provide big data analytics, where is that budget coming from? I would bet that at least some of that is being taken from the MR budget.

    And last month, the MRA published the results from their most recent quarterly tracking index on the MR industry. It reported a downward trend. To quote “Smaller and medium size firms (under $5 million in revenue) are primarily driving the lower score. However, a sizable portion of the larger firms also experienced a decrease in RFPs/proposals and revenue.”

    For your second point, I’m not so sure the big consulting firms are going to kick our butt and claim to be the de facto experts on big data analytics. I think our industry is in the process of reinventing itself from one based on data collection to one based on explaining what all this data means. So yeah, I think Kantar will be able to go toe to toe against Boston Consulting on big data analytics.

    Thanks for the comment Chris. I genuinely appreciate it. Like you, I have my own experiences and data to back up my suppositions. But how will this all work out? Time will tell! But if I turn out to be right, I’ll be even more insufferable than I am now!

  3. Kevin, I just love these surveys that ask about future expectations. What does “2/3rds of suppliers expect the products and services they will supply will change” mean? These are all prognostications made in an environment we all think is changing fast, and frankly they don;t smack of any reliability. Clearly we are so early in the game on social media and big data that no one really knows how this will pan out. And why would you expect anything other than a belief that social media MR will replace traditional MR? It’s there, so why not? The reality however will be otherwise as users discover huge biases in samples, declining response rates, non-participation in location information and weird findings because of attitudinal biases.

    Every survey I see about the industry is about the future of social media and big data, not what is happening now, which is basically not a lot going on. Have a look at every social media survey and look at the recency and frequency data, if you can find it. Past month usage is the most common statistic – how useful is that for a medium that is in daily use? Did you know for example that 25% of Twitter sign-ups have stopped using the medium? Does that make sense for such an “exciting” medium?

    As for big data, yes I know all the war stories and successes being reported, but these were always there, just becoming more visible as we created the “big data” terminology. Ask any manager about expectations from big data and they will give you the most positive (and probably outlandish) responses about “we aren’t using it now but we sure as hell will in the future”. The recent IBM study is full of this kind of hubris. The reality is internal data is owned by multiple departments and getting access to that by a market research firm will just never happen. But a McKinsey or Bain will walk in get approval from the Chairman or CEO and data access is guaranteed. Do you think Nielsen or Kantar have that kind of image that will get support with immediacy from a cross-section of senior management most of whom have probably never heard of Kantar but sure know their BCG’s, Bains and McK’s? The other factor that will work against MR is that this whole area of big data is already being picked over by software suppliers. For example many companies simply use off the shelf text analysis software nowadays and see no need to use external suppliers at all. Fort example, Clarabridge software is now used by many in the service industry to track sentiment and analyze customer responses. This ain’t rocket science and certainly doesn’t need MR expertise.

    1. Actually Chris, this GRIT study is very much focused on what is happening now, as well as what that may mean in the future. Check out the specific excerpt here on the blog that reports on both. We do have an immense amount of data on current adoption rates, uses, and challenges on a wide swath of topics. be patient; I think your concerns will be addressed on that point when we release the report. I’ll be doing more sneak peeks as well and you’ll see what I mean.

      I agree with you re: consultants and here is another data point for you: over 68% of suppliers in this sample are trying to position themselves as strategic consultants. That is happening NOW, and tells me that most suppliers see the writing on the wall here and are trying to deal with it. Whether they will or not remains to be seen, but the shift is real.

      I do disagree about whether MR experience is needed to fully capitalize on the “Big Data” opportunity; I think smart people getting to the “why” behind the numbers is very much needed, and MR skills are ideal to fill that gap. Again, will that happen? I don’t know, but the consensus opinion seems to be that since we are losing the “owners of data” role, the “owners of insight” position is the next place for us to look for long term relevance and growth.

  4. Chris, you sound like a bit of a cynic. Don’t you believe every study on future expectations?

    And I see your point on the competitive advantage consultants will enjoy in owning Big Data as they are already seen as experts on a far greater swatch of company concerns than we are.

    Still, I think the smart play is for MR to expand our reach beyond data collection and focus on what all this stuff means. Traditionally, the revenue model of the MR Supplier is heavily skewed towards data collection. Only a fraction of our costs are based on analysis and interpretation. That relative percentage needs to change for our industry to thrive.

  5. Leonard,

    I’d like to be able to agree with you that the ‘owners of insight’ role can provide relevance and growth. The only snag is MR (in the UK at least) has spent at least the past 10 years describing every piece of data as “insight” in and of itself. “63% liked the blue ones” is NOT insight and insight does not get generated by an Insight Department or the even more fatuously-titled Insight Director.

    It’s inductive and deductive and it’s more than just ‘results.’ But in the same way MR has managed to elevate recruiters to interviewers and interviewers to researchers, once again the industry has managed to shoot itself in both feet with nonsense labels that have only helped the ‘anyone can do that’ perception that is so widespread among non-MR practitioners.

  6. Carl, pleased to see there is another logical thinker out there, not caught up by all this social media and big data hubris. Leonard why MR has traditionally a low place in the information schema for business is because few market researchers ever came through the school of marketing, working with sales, logistics and internal data and therefore having an holistic appreciation of business. I have rarely ever seen a market research report that question distribution strategies or media strategy as possible causes for brand weakness. Too often the assumptions made by MR are narrow in the extreme. And that is why corporations will see no role for them in internal data exploration.

  7. Carl and Chris,
    I am very young in my MR career, and just within the few years I have been in the industry I have seen a few changes:
    1) MR is being combined with Social Media and Big Data more often (growing very slowly) to drive business decisions; therefore, the companies that are able to outsource that part to combine with their MR are delivering more of what is being expected in the industry. Companies are slow to put their eggs in this basket and bring it inhouse at an extra cost because as was being said – firms are struggling to pay rent, let alone undertake starting a department for social media and big data analytics that haven’t fully developed in the industry. Timelines are shrinking and budgets are too – doing more with less means adding other elements such as social media and big data to fill gaps.
    2) MR is being asked more often than in past years to assist in business decision making for their clients. Companies are not just taking a MR report every time, going to the board meeting and developing a game plan. They are asking MR’s to help analyze and pull out meanings for them so that when that board meeting starts they have an answer prepared for the higher ups. “Actionable insights” are being asked for in the analysis rather than your typical what is this graph telling me kind of interpretation. MR has the best skillset to do this but it is slow to be recognized.
    3) Smaller companies are having employees expand their roles within the company to gain that “hollistic appreciation” of the business and help fill the gap that having fewer employees has on demanding timelines and certain bids on jobs. I think it’s the larger companies who are able to custom form an approach that works for multiple projects may have the easier time avoiding big data and social media…at least for now. Those companies are still looking at it and doing some of those things though.

    The industry is changing and MR is the first budgets being slashed if the company feels they aren’t getting what they need from it – marketing and sales efforts are being asked to go on without us unless we can prove our worth. And that means adapting to new budgets and new needs.

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