Tom H. C. Anderson - Next Gen Market Research

Next Gen Market Research Group (NGMR) Study in ESOMAR Research World

In this month’s issue of ESOMAR Research World The Next Gen Market Research (NGMR) Group’s recent Market Research Trends study was covered. The issue is devoted to High Impact Research, and as founder and moderator of NGMR and recently elected US ESOMAR representative I’m happy to share my thoughts on the study.

If you are an ESOMAR Member you can log into the online version of ESOMAR Research world via the image above and read the entire article/issue. For non-members I have provided the article below.
@TomHCAnderson

THE END OF RESEARCH AS USUAL?
By Tom H. C. Anderson

Clients Adopt Next Generation Techniques With or Without Traditional Research Suppliers.
In recent years, the distinction between “traditional” market research and business intelligence has become exceedingly pronounced among commercial providers, and increasingly blurred among clients.

Technological advancements and socio-cultural shifts have opened the door to alternative insight sources and new approaches that clients have enthusiastically embraced, while many survey research suppliers cling stubbornly to conventional approaches.

These were among key conclusions drawn from a recent study among 855 members of Next Gen Market Research (NGMR), an online networking group of market research professionals.

The study explored a range of important issues among research clients and suppliers. Many of the results were predictable, but the survey also turned up some notable exceptions.

Next Generation Techniques and Analytics Adoption
Survey results indicate client-side researchers are more likely than suppliers to utilize “next generation” research techniques that fall outside traditional response-based methodologies. These span both mature and relatively novel, but increasingly popular insight tools: data mining, web analytics, CRM analytics, social networking analysis and blog mining.
In particular, client-side market researchers are much more likely than their supplier counterparts to engage in CRM analytics and Web analytics; they may be doing this in-house or through a specialist vendor, but that vendor probably does not define itself in traditional MR terms.
Moreover, MR suppliers who are not already providing these capabilities expressed relatively little interest in providing them in the future.

The study also uncovered unexpected disparities among types of statistical techniques clients and suppliers indicted they felt “comfortable discussing.” (Note: This is a subjective measure reflecting at least a reasonable theoretical understanding of a given technique, and not an indicator of proficiency to execute.)

Overall researchers were most comfortable with cluster and factor analysis, while CHAID analysis - a relatively intuitive data mining technique - scored surprisingly low among both groups, suggesting a general deficiency at the industry level.

Clients were significantly more comfortable discussing conjoint analysis. Suppliers, in turn, were more comfortable discussing structural equation modeling and canonical analysis.

Commoditization
More than half of client researchers did not agree with the statement “clients care a great deal about which panel company is used.” This opinion was also shared by roughly two-thirds of research suppliers, which suggests both groups agree that the online panel market is fairly commoditized from the clients’ perspective.

Conversely, large majorities of both clients and suppliers did not agree with the statement “sample is all about price, not quality,” although suppliers were significantly more likely than clients to agree. Additionally, only small minorities of clients and suppliers felt that online panel quality concerns have been “greatly exaggerated,” and even fewer respondents from both groups concurred with the statement “all panel companies are the same.”

Overall, it appears that clients recognize there are differences between particular panels and believe that sample quality is important, yet they also feel that quality is either beyond their control and/or best left to their suppliers’ discretion.

Researchers’ views on “Do-It-Yourself” (DIY) survey software platforms suggest online survey research, in general, has become relatively commoditized, too.

Although the study found significant differences at the extremities - far more client researchers than suppliers viewed DIY favorably - the majority of both suppliers and clients conformed to the notion that researchers are somewhat wary of DIY tools and concerned about their potential misuse, while not opposed to them in principle.

This is hardly surprising given the economy. “Off-the-shelf” products like SurveyMonkey have been popular with budget-conscious clients for years, and the global recession has doubtless furthered this trend. Ten years ago infrastructure was a significant barrier to entry; now, some DIY products are completely free. Setting aside potential quality issues, one can’t help to wonder whether survey programming and fielding is the best use of client side researchers time.

Supplier Selection: Quality Trumps Price
Clients’ criteria for supplier selection revealed several important trends. “Quality” was the overwhelming top factor in supplier selection among clients of all sizes, after which larger clients were apt to seek suppliers that offer “new and different techniques,” while smaller clients were significantly more likely to value “reputation” and “price.”

Shockingly, clients overall ranked “price” fourth among all selection criteria, preceded in ascending order by “new and different techniques,” “reputation,” and “quality.” In fact, “price” was on par with “personal relationships” among clients overall. Given the current economy and the diminishing margins reported both anecdotally and in MR companies’ financial reports, this finding raises questions about the perceived value of the typical MR deliverable.

Signaling a major shift, the least important consideration in supplier selection among clients overall was the size of the supplier company. One may thus infer that from the clients’ perspective there is no longer any direct correlation between supplier size and “quality” or “reputation.”

Conclusions
Clearly, technological advancements and market trends have in many ways commoditized conventional research by eroding barriers to entry and diminishing economies of scale. Survey research is just one form of data, and it may not be the most important - or lucrative - source in the future. Moving forward, research companies that in the past relied heavily on revenues from extensive field-and-tab operations may need to revise their business models and differentiate themselves through a broader portfolio of next generation methodologies and analytic techniques.

[Tom H. C. Anderson is managing partner of Anderson Analytics, LLC, and founder/moderator of NGMR. For further information or to download a full presentation deck of the study findings, please visit www.nextgenmr.com.]