Big Data, Big Changes?

Apr 09 2012

What will the entry of Google into market research mean for the industry?

Google Consumer Surveys is a deceptively simple product. Limited questions, simple (and low) pricing, and the promise of focused customer feedback. Other DIY tools such as Survey Monkey (which I use regularly), have not yet gained strong traction, perhaps because they lack the access to consumers that is an important part of an agency’s service.

I believe that Google may well be the disruptive technology that finally wakes us up to some of the changes that are about to take place in market research. I know that we have heard the cry of ‘change, change’ before, but this time it could be truly different, because Google are at the intersection of a number of trends in broader society as well as market research which when pulled together could have a profound influence on the future of the industry.

Consider the ‘benefits’ that market research provides clients. They include consultancy (business understanding), consumer understanding, research design (sampling, questionnaire, discussion guide, etc), data collection, analysis and communication of learning (report, presentation, etc).

Large agencies have a business model that is based on data collection (and they account for a large part of the industry, with the top 10 companies accounting for more than 50% of global market research revenues). They typically base charges on a cost per interview basis. These costs are already falling with changes in data collection (from face-to-face to phone to online and ultimately to mobile) and will continue to fall. Google along with other DIY research platforms offer a basic service at very low cost (and with quick turn around too). While the industry incumbents complain that the service is not quite as good as theirs (i.e. ‘poor quality, not proper research’), users will gradually shift to the quicker and cheaper version for problems that can be addressed within a simpler and more focused service delivery. And over time, the disruptive technology will improve, add features and become the mainstream. This is a classic example of disruptive innovation, and I believe the current business model of many agencies, as the access to sample becomes more open, and survey design, data collection and basic analysis automated.

Looking more broadly at ‘data’, the latest ESOMAR report estimates that the market for ‘business intelligence’ is at least 50% more than that currently defined as market research (and they are conservative). They include software companies, media monitoring, sample providers, web traffic measurement, social media communities and more general and business market reports.

Many companies have the analytic skills to be successful in business intelligence, but who has the data? I think this is where Google may have a big (and increasing) advantage. Of course, individual companies will continue to hold a mass of data about their customers, and the more they integrate this data internally as well as externally the more they will be able to leverage their understanding. Currently, that doesn’t happen, and many companies struggle to even share the information they have internally. Perhaps this will change.

There are three inexorable trends in the market research world:

  • the quantity of customer data keeps growing and growing
  • new approaches and new technologies will continue to encroach on core market research business activities
  • the importance of combining data into holistic insights has never been greater

So where does that leave the industry? The current business model means that too many researchers are selected, trained and developed as project managers. The changes taking place will require a paradigm shift both in the business models of agencies and the skills required by researchers, who will need to become more knowledgeable about different data sources and have the ability to analyze and more importantly synthesize information into simple and focused stories for clients.

Big data means big changes. Those who want to take advantage of these shifts will need to have analytic, creative and storytelling skills to weave more and more threads of data into compelling stories to help client businesses succeed in an increasingly complex world.  And above all, they need to understand  human behavior, something data will never be able to describe adequately.


The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton Christensen (1997)

Into the River: How Big Data, the Long Tail and Situated Cognition are Changing the World of Market Insights Forever by Tony Cosentino (2011)

One response so far

  1. Excellent post and analysis Neil; I couldn’t agree with you more on all counts. Interesting times are indeed ahead for us all!

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