Diagnosing Challenges Facing Market Research

If I were to attempt to make an alarmist case that the future of our industry was in jeopardy, I would expect an audience of veteran market research professionals to object. We’ve heard apocalyptic claims seemingly forever, yet as an industry we’re still alive, kicking, and growing! The future of our industry appears to face challenges that fall into two categories: external and internal. Distinguishing between the two helps answer the question about what’s really going on. To me, the external challenge looks something like this: Business decision making relies on data and insights. For years, market research was the only source for data and insights and therefore enjoyed unique status relative to business decision making. Today, everybody is swimming in data and insights from myriad sources. Frankly, new sources provide better answers to certain kinds of questions; questions that used to be the exclusive domain of market research. In the past, our industry represented 100% of the “insights” pie. When new sources joined the marketplace, the total “insights” pie exploded, and market research represents a smaller portion of it. So, the external challenge, to the extent that it’s a challenge at all, appears to be one of semantics: what is the role of market research and where should market research be applied? If we posit that market research is the unique tool we collectively use to gather information that cannot be gathered by other means, it makes sense that market research should shrink relative to total “insights” as new means of gathering information become available. I argue that market research belongs on this frontier, straddling the line between what is known and what is unknown. As known territory expands, our industry should adjust accordingly. This is not a zero-sum game; more known territory does not diminish infinite unknown territory. As such, the future of market research is hardly in jeopardy due to any external challenge. Let’s move on to address the internal. Our industry’s supply chain is comprised of three primary players: corporate clients, market research agencies, and sample providers. As an industry, we require some degree of alignment between players to function at all, in the short-run. The marketplace has established what “minimum viable function” looks like: generally speaking, sample prices are as-low-as-providers-will-accept and data quality is as-poor-as-customers-will-tolerate. This is far from an ideal situation, but it works… in the short-run. What’s missing here is the long-run; this is a repeated game. Our industry’s marketplace operates in the short-run at the expense of market research participants in the long-run. Participant experience and engagement are neglected afterthoughts. As the game repeats, participants suffer and disengage. As helpful as the marketplace is in establishing a bottom-end, it doesn’t help establish viable alternatives. Clearly all players understand that improving participant experience and engagement is in our collective long-run best interest, yet there is no short-run impetus to do so. It’s hard to bridge this gap without stumbling into naïve territory but I’ll proceed nevertheless. The answer clearly involves placing value on participants, but how do we get there from here? Coercion is one approach; our industry’s associations and organizations play this role to some extent. An approach that directly addresses flaws in our marketplace would be better. The evolution of digital advertising provides an interesting corollary. As tracking capabilities developed, CPM led to CPC which led to CPA. Today, with three options, you can pay very little for someone to view your ad, you can pay a little more for someone to click your ad, and you can pay much more for someone to buy from your ad. Ad tech did a good job quantifying what people are willing to pay, but they did a better job understanding what people will pay for, separating views from clicks from actions. They created an efficient market, but they also created multiple markets. Our own marketplace has enough gravitational pull that a viable alternative must look sufficiently different from everything we’ve explored to-date. Have we truly exhausted all possibilities? I think not. We have an efficient market, but we don’t really have multiple markets. Undoubtedly, a few players willing to risk exploring these possibilities will succeed eventually; they should be rewarded greatly. Walker Lewis Critical Mix https://www.linkedin.com/in/walkerlewis/ https://www.linkedin.com/company/critical-mix/