The Future Place Blog

What is the next big thing in market research?

Last week a group of UK Market Research leaders (mostly C-level execs) gathered to workshop the future of market research. Earlier posts covered “Are Surveys a Thing of the Past?” and “Is the Market Research SWOT mostly wrong?” This final post covers what these leaders thought about the next big thing in market research.

Whilst there was some interest in topics such as research through gaming, quant surveys via smartphones, mass ethnography, social media monitoring, community panels and MROCs, none of these were identified as key candidates for being the next ‘big thing’.

Big Data

The general consensus in the room was that Big Data is the most important trend, albeit one with some real challenges for market researchers. By Big Data the leaders were talking about integrating behavioural data (who does what, when, with whom) with market researcher’s ability to understand people and in particular the question ‘Why?’

The brainstorming produced two versions of Big Data, one focused on brands and one focused at the societal level – although there was a degree of overlap between these two visions.

The brand focused view looked to integrate CRM data and Voice of the Customer data. Some brands are making great progress with integrating and utilising their data, for example Tesco and its loyalty card data, but there is scope to go much further. This field already has many players, it includes analytics, network analysis, direct marketing, business information, and market research. The key thing that market researchers can add to this mix is a focus on why people do things, rather than just be observational and experimental. This route would require a major shift in market researchers’ codes as much of this work would relate to identified individuals. For example, putting procedures in place to talk to people in identified circumstances to find out why, to assess their likely responses to changes, and to co-create new ideas.

The societal level version of Big Data can perhaps best be thought of as the merger of very detailed panels with third-party data systems, with one portent being WPP’s Xaxis with its plan to create a panel of half a billion people for behavioural and ad targeting purposes. This view of Big Data would combine all of the publicly available information (including that part of social media that is public) along with opt-in data from multiple sources, along with relevant other data, such as geodemographics.

With both models of Big Data, one of the cornerstones would have to be informed consent, and even then regulators are likely to be a major issue. Traditional market research techniques, such as questions, interviews, choice tasks etc would be the final 5% that turned data into consumer insight. The feeling, amongst our thought leaders, was that most of the data companies were very bad at understanding people and very bad at addressing the ‘Why?’ question, and this represents the opportunity for market research.

To paraphrase the thinking, there are opportunities to make millions of dollars through approaches such as behavioural economics, netnography, research through gaming, and smartphone anthropology, and neuroscience. But, the Big Data opportunity is going to be measured in billions of dollars. Market research has an opportunity to be involved in Big Data, if we change, if broaden our boundaries, if we develop new skills, if we review our codes, and if we really understand our core skills. Our core skills relate to understanding people and understanding how to get business insights through understanding people.

And Mobile?

One subsidiary topic, to the Big Data theme, was the role of mobile. The consensus was that if big data is the future, then mobile is becoming the primary door to the collecting and accessing of that information. The future of mobile looks very exciting, but not necessarily as a replacement for collecting standard quant surveys, rather its role could be the portal through which new methods of gaining insight are developed and delivered.

There was a consensus in the room that the 30 minute brand tracking survey was not going to be ported to mobiles in any large scale way. In order to use the ubiquitous mobile, the methods as well as the medium have to change.

 

Running the Saints Way for Coppafeel

On 17 August I am going to be running just under 30 miles to raise money for CoppaFeel, a breast cancer awareness charity. You can follow my progress on my Saints Way blog.

You can make a dontation at my JustGiving page.

Warning! Don’t send emails to people’s Yahoo! Mail - it is dangerous

According to an article on MrWeb Yahoo! Is changing its terms and conditions to allow it to read emails sent from people’s Yahoo! Mail accounts, AND they will also and open emails sent to Yahoo! Email addresses WITHOUT THE PERMISSION OF THE SENDER!

This is not only outrageous but raises severe security problems for anybody sending messages to people’s Yahoo! Email. You can read more about this problem on the BBC’s website.

 

Is the Market Research SWOT mostly wrong?

Earlier this week I ran a “Where next for market research?” session with a group of senior players from 15 different  organisations in the UK. Yesterday, I reported back on the issue “Are Surveys a thing of the past?”. Today I am going to look at MR’s self-image.

In the ESOMAR 2010 Global Report there is a SWOT analysis of Market Research. The SWOT was partly created collaboratively by people adding their suggestions via an online discussion – so it clearly represents a constituency of thought within MR. As part of our session this week the thought leaders were tasked in looking at the SWOT critically, for example to see if they could argue why the strengths were not strengths, the weaknesses were not weaknesses and so on. This was done as a loosening up exercise before we moved on to looking at the future, however, it produced some very interesting thoughts and ideas.

Just before we looked at the SWOT we had reviewed a range of evidence and data that showed:

• A majority of clients were willing to trade-off quality against price
• A majority of clients were willing to trade-off quality against speed
• Over half of all research bought (by value) is provided by the top ten biggest agencies

Strengths
The top item in the strengths column was Quality. However, this means that market research is describing itself in terms of something that is not the key driver for the majority of clients. In their book ‘Simply Better’, Barwise and Meehan explore the problems of brands and organisations choosing to differentiate themselves on attributes that are not core benefits to their clients.

The second item on the ESOMAR list was Reputation, based on scientific criteria and ethical purity. But again this contrasts with client demands for insight, commercial understanding, and delivering results. We were reminded of Martin Sorrel’s comments to the MRS conference a few years ago when he made the point that it is not for market researchers to say how much quality a client should buy, the client makes that decision, the market researcher supplies the information to enable the client to make the choice, but the choice is not (should not) be the researcher’s prerogative.

Other strengths that were challenged included “Large and Growing” – the industry has recently stalled and is tiny by comparison with the newer fields of Business Intelligence and Management Consulting. The topic of Inspirational Agencies was also challenged – there are some inspirational agencies, but that is not what characterises our industry; we can’t say one of our strengths is something that does not relate to most research bought and sold, and most research bought and sold is from the big agencies (and in the SWOT the term inspirational agencies was specifically referring to the smaller ‘new wave’ agenies).

Weaknesses
In terms of weaknesses, the number one was Communicating Research’s Value – this sounds like every political party who has lost an election, we did not lose it because we were wrong, but because we did not communicate our ideas properly. This may be a weakness, but is it really one of the top problems? If we believe that communicating our strengths is the problem we won’t address the real issues.

The second weakness was Compromising on Quality. However, as explained above, this assumes that quality is the top issue, as opposed to meeting clients’ needs and expectations. Another way of expressing compromising on quality is to say Flexibility – which the SWOT claims is a strength.

The weaknesses columns also included reluctance to change and lack of new ideas, but this potentially ignores the massive number of start-ups in (and around) the market research area and the vast number of purchases that the mainstream agencies are engaged in.

Opportunities
The largest amount of scorn from our thought leaders was reserved for the term “Value-added Research”. All research that is useful to the client is adding value, adding value is not something unique to expensive research nor consultancy.

Several of the opportunities were also seen as potential threats, which is not unusual for a SWOT, these includes Social Media, Advances in Technology, and Changing Environments.

Threats
Perhaps the craziest part of the ESOMAR SWOT (at least in our eyes) was the Threats section.

DIY Research – in essence DIY reflects where research will be done, it raises the possibility that more of it will be done inside client companies, instead of by agencies. Let us imagine a world where half the employees of agencies moved to being employed by end clients – is that a threat to market research? It might be a threat to some companies, but not to the role of market research.

Research as a Commodity – most of the big money in market research comes from turning research into a commodity. Large amounts of research are only of large ongoing value to clients when they have becomes standardised and integrated into systems. Bespoke, ad hoc, ‘value added’ research will always have a role, but the industry would be destined to become niche and boutique if the commodity trend reversed.

Alternative Data Sources – if market research does not embrace alternative data sources and add “Why?” to the mix, then alternative data sources will speed the death of MR, but they are also the biggest single opportunity for Market Research to start to grow in big and significant ways.

New Entrants – Dunnhumby is a new entrant, Synovate is a new entrant, Millward Brown (created by two planners) was a new entrant. New entrants might be bad for current agencies; they are not bad for market research. However, creating boundaries that classify some companies which offer market research as NOT market research is a potential problem.

Our Conclusions
After finishing our brainstorming on the ESOMAR SWOT we felt we were looking at an industry that was:

1. Trying define its core benefits in a way that did not match those that its clients were most interested in
2. Trying to define its core characteristics in terms of a minority of its activities, instead of in terms of the bulk of the industry
3. Trying to preserve its current structure in a changing world, confusing what is good for market research with what is good for today’s agencies
4. Seeking to protect its narrow turf instead of seeking to embrace new areas of business
5. Reluctant to see that big data, integration, analytics were the main opportunity and that a reluctance to expand what we mean by market research is the main threat.

What do you see as the main issues for market research? What do you think the term market research should mean?

 

Are surveys a thing of the past?

Yesterday I had the pleasure of brainstorming the future of market research with 15 senior thought-leaders from the UK and several important ideas and observations emerged (some of which will be the subject of future posts). But the most striking overall finding was that the future of market research is something very different from its past.

In the past market research was largely identified (from both within and outside the industry) as being based on spending time with people asking questions, talking to them, or following them around. The core of this business was surveys, focus groups, depth interviews, and more recently online discussions and communities. A popular view about market research is that about 80% of industry is quant and about 15% is qual (in terms of revenue).

However, looking at the data from ESOMAR, MRS, and Inside Research this picture does not accurately reflect the industry today. Something like 50% of current market research spend (as described by ESOMAR’s lists, the MRS league tables, and Inside Research’s figures) does not relate to spending time with people, it includes store audits, loyalty card data, media monitoring, the processing of health data etc. Perhaps the most striking aspect of this is that Dunnhumby is number 3 in the UK league tables of market research companies, and in ESOMAR’s global league table the top 15 contains several companies whose core business has little to do with surveys, focus groups, ethnography, depth-interviews, and community discussions etc.

Once consequence of this split is that it is probably fairer to say that the traditional part of market research is something like 15% qual and 35% quant - creating the 50% that is traditional, i.e. that qual (including most of the activity in MROCs) is about 40% as big as quant, not the under 20% that it is usually reported as.

So, the common image of market research today, i.e. one that is  dominated by researchers dealing with people through direct interactions, appears to be wrong. Remote and automated monitoring of large data sets is a major part of what market research today is.

What about the future?

When the conversation concentrated on the next five years it was clear that traditional research concepts, such as surveys and focus groups are going to play an ever decreasing role in market research, even in the context of mobile surveys and community discussions. The key changes are going to be in the integration of data sources. Although this area, which is likely to involve CRM, Voice of the Consumer, loyalty card data, people monitoring, geolocation, social media listening, transactional data, and third-party databases is going to be contested by a wide variety of types of  organisations, the people in the room felt that our special angle is adding two elements to the mix a) understanding people (something which we felt the large ‘data focused’ companies were quite weak at) and b) focusing on the ‘why?’ question.

The changes, in what market research is, have some pretty wide implications in terms of the skills we need, who our competitors might be, who our clients might be (they increasingly are not the insight managers), and what the rules of our industry should be, and they will be explored in subsequent posts on this blog.

But, I will leave my comments here with one prediction. At the moment something like 50% of market research relates to surveys, focus groups, communities, discussions, polls, and other traditional forms of market research. In five years this will be under 25%.

What do you think?

 

Interview with Tamara Barber of Affinnova

Affinnova are the sponsors of the Advanced Qaunt NewMR event. Ever since Tamara Barber and Jeffrey Henning moved to Affinnova I have wanted to find out more about what Affinnova does, and as a result of them sponsoring the NewMR I go the chance to record and interview with Tamara, which you can see below.

 

How do we assess the reliability and validity of social media research?

I am pulling together the final draft of an article on social media research and have got into an interesting discussion with one of the reviewers about how clients (and researchers) should assess the reliability and validity of social media research.

Having thought about the curent position a bit more my view about the current state of play is set out below.

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Traditional quantitative research has well established methods of assessing its reliability and validity. The methods of assessing the trustworthiness of qualitative research are less precise, but are well established. By contrast, the views about social media research vary widely.

Although views about social media research lie on a continuum, it is useful to think of three positions that typify the debate:

1. Social media research is simply traditional research with a new sample source. All the traditional rules about sampling, measurement, reliability and validity can and should apply.
2. Social media research is different because, for example, it has not established what the population is, has not created a sampling frame, has not established that its measurements follow normal distributions, and is subect to sensitised and complicit participants. Therefore, traditional methods of establishing reliability and validity are unproven.
3. The third view attacks not the methods of social media research but the subject of the research. This view holds that the comments people make online reflect constructed personas. Comments are often made for purposes other than the expression of ‘true’ views. This third camp is doubtful that social media research can directly inform clients about the ‘real’ world.

 

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Do you think this covers the range of views that currently exist? What do you think about the reliability and validity of social media research?

What is the next ‘big thing’ in market research?

Next week I am running a workshop for a UK managing directors and senior decision makers within the UK research industry focused on “Where next for market research?”.

As part of the preparation for that session I have created a list of research approaches that ‘might’ be one of the major techniques of the next few years. I have my own views about which are more likely to be the main ones, but the list I have gathered so far is:

1. Behavioural economics
2. Biometrics (non-neuro, e.g. eye tracking)
3. Community panels
4. CRM related research
5. Database/loyalty card data integration
6. Discourse analysis
7. DIY research
8. Genetic algorithms, e.g. Affinnova’s concept testing
9. Mobiles for short quant
10. Mobiles for standard quant
11. MROCs
12. Netnography
13. Network analysis
14. Neuromarketing/ neuroresearch
15. Predictive markets
16. Research through gaming
17. Researching social media ROI
18. Secondary research
19. Semiotics
20. Smartphone qual/ethnography
21. Smartphone standard quant
22. Social media monitoring
23. Tablet based research
24. Text analytics
25. Video (webcam) groups
26. Virtual world simulators
27. VOC (Voice of the customer) work
28. WE-Research

Do you have any additions to the list?

Which do you think are most likely to be the next big thing?