More Investment in Market Research

Simon Chadwick

After a record increase in inward investment into the marketing research, analytics and information industry in 2012, 2013 has seen yet another leap forward in new capital being invested in this space.

The Cambiar Capital Funding Index (CCFI), an annual analysis of new investment in the industry, estimates that a total of US $3.2 billion was injected into marketing research, analytics and information firms in 2013. This is up from US $1.7 billion the previous year, an increase of 88%.

Skewing these figures, however, was the massive US $800 million debt financing of SurveyMonkey, which occurred in January 2013 and enabled key stakeholders to benefit from their equity holdings. Even if this outlier is removed, however, overall growth of investment remained at a very healthy 51%.

Let us not be fooled, however, into thinking that the primary focus of this investment is what would traditionally be considered “market research.” It isn’t. No, the operative word here is “analytics.”

If we exclude the SurveyMonkey debt raise, as well as IPSOS’s stock market raise in 2011 (used to finance the purchase of Synovate), we can see that inward investment in market research activities (new and old) has remained at between US $165 and US $220 million a year. What has really surged ahead in that time has been investment in marketing analytics, which rose from US $300 million in announced deals in 2011 (see box) to nearly US $1.6 billion in 2013. Given that not all deals are announced, this probably equates to around US $2 billion in actual investment in analytics.

What counts as analytics? In 2012, investment in this category was evenly split between social media and big data analytics, with mobile coming in third. It was the first time that we had explicitly seen and measured “big data” as being a future force in this space, and so we were keen to see what would happen in this arena this year.

The answer was an explosion of investment in marketing-related big data analytics, doubling over the previous year. This is where the investment community has placed its bets. Correspondingly, investment in social media analytics dropped off somewhat, suggesting that this area is probably maturing. At the same time, there have occurred upsurges of investment in both web and predictive analytics, as well as smaller ones in text and retail analytics (grouped here under “other”).

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