Imagining the future is exciting, especially if, like me, your childhood was shaped by sci-fi versions of the future; Star Wars, Back to the Future, The Jetsons and Terminator, to name a few. If you can relate, most likely you are also disappointed in not yet owning Marty McFly’s hovering skateboard (Hendo doesn’t really count). If life was a product, at this point I would be asking for my money back.
So what does the future hold for market research? No, it’s not dead yet – I admit that my headline is a mere exaggeration to grab your attention in a disgustingly tabloid-esque style. This is a $40B industry (and growing). It’s not easy to wipe out an industry that is bigger than many small countries’ economies. Or is it?
The Graveyard
When talking about the future, it’s important to also talk about the past. The rise and the demise of several technology titans leave valuable lessons for all of us. Everything goes well until something disrupts. Then comes chaos for a short time. Then reactive measures — your clients are gone; they are not as loyal as you thought. Then you realize that there isn’t much you can do and you try to salvage what you have. At this point the disrupting company is riding the wave of success. In the meantime, you’re just trying to cover the holes. You are desperate to look attractive so that someone else can buy what is left of you.
There are three very clear examples of companies who dominated markets but then were wiped out. In just 19 years, these companies lost a bit more than $90B altogether.
- Nokia: At its peak in 2010, it had $74.56B in revenue. In 2014, it recorded $13.4B
- Kodak: At its peak in 1996, it had $16B in revenue. In 2012, it filed for bankruptcy.
- Blackberry: At its peak in 2011, it had $20.59B in revenue. In 2015 it is $3.3B.
All these companies have something in common: they are victims of disruptive technologies that no one saw coming.
Comparing companies that failed individually with entire industries may be like comparing blackberries and apples (pun intended). However, one of the things (for better or worse) about our industry is how cohesive it is. We all seem to react at a similar pace to technology. If seen through this lens, disruptive technologies could be a threat to us all.
Winter is Coming
In our industry, data collection for primary research, comes in many forms, from Nielsen’s TV measurement tools to traditional face-to-face qualitative interviews. Historically, clients came to us as experts at collecting data and understanding it. We designed statistical models to make it more efficient and developed techniques to guarantee the accuracy of this data.
Technology has democratized data collection. The evolution in storage capacity has given us the ability to store pretty much everything without the need to ever delete a file.
Companies now know that all they have to do is collect as much data as possible about their interactions with their customers (this applies to any vertical), organize this data and push it through the right tools and resources. This is easier said than done, but until a few years ago, companies were discarding most of this data and going to third parties for insights about their consumers. I’m sure you’ve read the numbers – one of the careers in highest demand for the next 10 years is going to be data scientist.
The demand for data scientists is coming from every sector. There is an increasing need for people that can analyze data because companies are not discarding data anymore. It is being collected in truckloads. Our clients know that with the right resources, they can mine their data. They are generating all the data they need to get the insights they want.
The power of mining your own data, mixed with the power of mining publicly available data, is a very strong combination. Considering how big our digital footprint as consumers is, this is becoming easier and easier. Let’s take, for example, a company that recently launched a product called Crystal (https://www.crystalknows.com/). This application analyzes people’s public data and then it tells you exactly how to communicate with them. Go ahead, give it a try – it’s free at the moment,
At first it feels like reading your horoscope, but unlike Astrology, there is real science behind Crystal. On a quick test, it managed to match my profile with 97% accuracy. What this means is that if you look me up on Crystal, it will tell you what to say and what not to say, when you want to send me an email. Some of the tips it shares about my profile are freakishly accurate. This tool is the dream of every sales person. Until now, the most common use for technologies like this one has been to sell you very targeted online advertising. This tool takes it to another level.
At this point Crystal only sells itself as a tool to help you write better communications. But depending on how strong its profiling engine is, it (or something similar) could easily grow into other areas like market research. If they are able to determine how to communicate with someone, with “bigger data,” they should be able to apply the same sauce to larger audiences. The implications are tremendous. By analyzing publicly available data and blending it with historical data from your systems, you can shape messages, tailor products and understand behavior. All this without even asking a single yes-or-no question. Crystal is testing this at a very small scale, but its potential is really exciting.
Crystal is showing us how to push the envelope when it comes to mining publicly available data. It’s an ambitious project that is crawling the infinity of the web looking for those needles in the haystacks of information. Somehow, it is now managing to partially do it. Imagine if you could plug it to your own CRM system and allow something similar to profile your clients and tell you what to say and what not to say to them?
Let’s also look at Slice (www.slice.com). This service helps you to keep all your online purchases organized. It collects all your receipts, gives you analytics about your spending, tracks your shipping, and even monitors changes in the prices of the products that you have purchased, allowing you to claim refunds and rebates, saving you money! Best of all, this service is free.
On the other side of the curtain, Slice Intelligence uses anonymous aggregated data from these interactions with the Slice app, and delivers online retail purchase habits reports based on real purchase data. All this stuff is explained in detail in their privacy policy.
Traditional market research online panels have a transactional relationship with their panelists. For completing every survey you get X, Y or Z. In most cases this is money for surveys. Slice is one of the many companies that show us that people are happy with getting services that make their life easier, and in return they will share their data. Google built an empire with this model.
These type of applications are appearing everywhere, therefore the sources of data and insights are becoming infinite. Clients are already looking at them with a lot of interest. What this means for our industry is that we no longer have the monopoly to provide our clients with information about consumer behavior. Technology has leveled the playing field for everyone. The most innovative agencies have identified this and are already creating partnerships and alliances with a lot of these new applications and services.
In the future, we may also become consultants to help our clients identify which tools they can give to their consumers. We could help them design those tools in such a way that the data gathered can be analyzed more efficiently. Moving from the “survey” to the “tool” will allow customers to voluntarily generate data, not in waves, but in a constant stream of data. This is the ultimate dream of the researcher, and it is also the ultimate dream of every client – real-time constant feedback about their users.
This sounds a lot more complicated and tedious than writing a survey. But don’t worry, market research is not really dead. Concepts and ads will always have to be tested. As long as there are people willing to answer questions in exchange for money, there will be room for this model. However, it is at risk of becoming slow and inefficient, compared to the new sources of data, and is therefore unattractive to our clients. This coming change could be a gradual process or it could happen in one single hit. We won’t know it until we feel the knuckles.
Felix Rios is Market Research Technology Manager at Ugam.
8 comments
I am a representative of MR consumer. We welcome news to provide more data at a lower cost. But data collected by different methods, in a different context, bring different results. Our internal customers do wonders and require findings from different sources has to be roughly the same. If not, they criticize it and they tend to question the reliability and usefulness of the outputs. So I have sometimes to defend market research and its reliability.
we are delighted that the industry is officially NOT DEAD.
We can stop looking for an undertaker if we listen to you.
We are calling a meeting next week and to WAKE up our clients to what we can do them NOW and in the FUTURE.
Colin
Colin, there are many threats to our industry, I guess we’ve always had threats. I just wonder how much of an accelerator technology is, compared to previously? I haven’t been around too long to have an answer about this.
Thanks for commenting.
I agree whole-heartedly with Annie. While Market Research as we knew it even 5 years ago may be ‘dead’, the industry is thriving now with the use of emerging and even some more futuristic technologies to help improve surveys, participant engagement and survey accessibility. The world is now using infographics by an increase of 9000% from 2012, showing that we’re evolving in the way we don’t just analyse data, but communicate findings. I think the fact that market research also focuses on ‘insights’ more than on seemingly retrospective-only findings is also testament to our push for our data to translate into something meaningful that people will actually use and make a difference. But staying ahead and being part of the evolution means, as Annie put it, also evolving your skills. Every time I speak to students about the current state of Market Research as an industry and where/how it will evolve, I try to drum in three aspects; the need to learn about Technology (I will often discuss VR and Augmented Reality), Design (the increasing need to provide surveys with great UX design and formats that are more in-tune with the rest of the internet, especially through mobile) and finally, ‘Translation’ (ensuring the data that is collected actually counts, and is readable to the relevant audiences through a mix of tools, such as Video as well as the traditional PPT presentations). I actually wrote an article in VUE (Annie you may remember) where I wasn’t being very nice about the Market Research industry at the time. However, since I wrote that article in 2012, the industry has evolved so much, and I no longer see MR as ‘dead’. It’s alive, thriving and diversifying. Fantastic article felix, agree with many of your points, particularly the way researchers will be much more consultative, making sense of constant streams of data in the very near future.
Now a days, the sources of data are endless, and they will continue to grow! The industry is changing and growing. There are so many more companies now analyzing and studying consumer behavior than ever before.. They are looking at data sources that we never thought we could use until a few years ago. There are new companies working with huge sets of data and providing “market research” insights, without even knowing it, many don’t even consider themselves part of this industry. The years ahead are exciting!
Forgot to add, many thanks for your positive comments 🙂
Market research will never die. Methodologies may come and go but the need to understand consumer behaviour will always be there, and THAT is what market research is all about. If you want to make sure you still have a job in market research 10 or 20 years from now, then you’d better make sure your research skills also evolve from survey science to data science.
Agree with you. There will always be a need to understand and study consumer behavior.