Market research was born in the US during the 1920’s boom years, with the art of surveys and focus groups becoming the mainstay of the admen of Madison Avenue. A generation later the same techniques were adopted by the emerging commercial due diligence sector looking to serve the rise of the private equity titans. Market research is a critical part of an investment process. Testing an investment hypothesis, identifying growth opportunities and valuing a brand is big business. The likes of McKinsey and Bain&co have pushed the industry forward with their trademarked models and schemas, but they still rely on the tried and tested telephone surveys and focus groups to inform and support their strategies.
Almost one hundred years since the first market research survey, the sector is undergoing a revolution. The world has moved online. We now research, purchase and comment online in a vast scale. Our friends in Silicon Valley capture it all. And they are now waking up to the value of the data they have. Social listening goes beyond market research, it is continuous rather than static, unprompted and therefore unbiased, depicts shifting consumer preferences driving market and industry trends, rather than the narrow snapshot offered by a survey or a roundtable.
Why would you commission a 1000 strong telephone survey that would take two weeks, when you can understand the preferences people of 100,000 people in two days?
Why would you undertake a focus group to understand what people buy and who they list as competitors when you can see the browsing and purchase activity of millions of consumers?
Why would you take a punt when choosing a new store location, when you can now pinpoint volume demand for a product at the postcode level?
Market research budgets have unsurprisingly contracted for seven consecutive quarters. Digital data is the future of market research. The large research and strategy firms know, this and they are worried. The expensive panels they have spent decades building face the risk of becoming obsolete. They are looking to protect their old model, not embrace the new.
This is Kodak all over again.
Bill Gates mantra is that it is better to cannibalise yourself than let someone else do it.
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