Market Research Industry


CareerCast.Com has released its list of “most underrated jobs” for 2012.  Number 5 on the list?–Market research analyst.  Ahead of MR on the list are computer systems analysts, civil engineers, veterinarians, and biologists.  These jobs make the list on the basis of projected growth in employment, relatively good compensation, and lower stress levels than more glamorous or otherwise high-profile occupations.  Here’s what CareerCast says about market research as a career:  “One of the fastest growing fields per the [Bureau of Labor Statistics], market research analyst makes a vital impact on the direction of business decisions by applying data of economic and technological trends.” (emphasis added)

ESOMAR Congress 2012 took place in Atlanta, Georgia during the second week in September.  This was the first time the Congress has been held in the United States, reflecting the extent to which ESOMAR has become the most important global organization of market and social researchers.  This also happens to be the 65th anniversary year for ESOMAR.

The current and past ESOMAR Councils, together with the Director General, Finn Rabin, and the rest of the ESOMAR team, have done a terrific job in building a robust and resilient organization and a public voice for market research.  My desire to serve ESOMAR as a council member does not reflect any dissatisfaction with the direction of the organization.  Rather, I believe that I can make a contribution to the continued growth and health of ESOMAR.

My involvement in ESOMAR has grown steadily since I attended my first ESOMAR-sponsored conference ten years ago (Automotive–where I had the privilege of presenting my first ESOMAR paper).  More papers and events followed (Consumer Insights, Asia Pacific, and Congress).  I was honored beyond imagination to have my 2010 Congress paper, “Riding the Value Shift in Market Research,” selected for the Excellence Award.  More recently I’ve served on the juries for the Effectiveness Award and for this year’s Excellence Award and I presented a workshop on the cognitive aspects of survey design (“Think Like a Respondent”) at the Online conference in 2010.

Outside of ESOMAR I’ve been involved with the American Marketing Association, CASRO, and the American Psychological Association for many years.  I served as president of my local AMA chapter, leading the successful turnaround of a struggling chapter.

As I expressed in my Candidate Statement, I have three particular areas of interest that support ESOMAR’s overall mission of encouraging, advancing, and elevating market research throughout the world.  These areas are:  professional development, collaboration with other related MR organizations, and finding new business models that will enable sustained growth for MR.

ESOMAR’s continued growth will depend on both capturing and reflecting the diversity of global market research.  The election rules insure a measure of geographical diversity.   It’s equally important to have diversity of experience and industry perspective.  I believe that I bring a unique point of view–as do the other nominees–that will help me contribute even more to ESOMAR’s future success if I am fortunate enough to serve as a council member.

Thank you!

dgb

2 October 2012

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There’s an interesting article by Jonah Lehrer in the Dec. 13 issue of The New Yorker, “The Truth Wears Off:  Is there something wrong with the scientific method?” Lehrer reports that a growing number of scientists are concerned about what psychologist Joseph Banks Rhine termed the “decline effect.”  In a nutshell, the “decline effect” is an observed tendency for the size of an observed effect to decline over the course of studies attempting to replicate that effect.  Lehrer cites examples from studies of the clinical outcomes for a class of once-promising antipsychotic drugs as well as from more theoretical research.  This is a scary situation given the inferential nature of most scientific research.  Each set of observations represents an opportunity to disconfirm a hypothesis.  As long as subsequent observations don’t lead to disconfirmation, our confidence in the hypothesis grows.  The decline effect suggests that replication is more likely, over time, to disconfirm a hypothesis than not.  Under those circumstances, it’s hard to develop sound theory.

Given that market researchers apply much of the same reasoning as scientists in deciding what’s an effect and what isn’t, the decline effect is a serious threat to creating customer knowledge and making evidence-based marketing decisions. (more…)

I had the pleasure of participating in a lively discussion on the impact and future of “DIY” (do-it-yourself) research a few weeks ago at the recent ESOMAR Congress in Athens, Greece.  In a 90-minute “discussion space” session I shared a few thoughts about the future of the market research industry.  The other half of the program was presented by Lucy Davison of marketing consultancy Keen as Mustard and Richard Thornton of CINT.  They shared the results of some research on DIY research that they conducted among consumers of market research (i.e. “clients”).  Bottom line, many clients are favorable to DIY for a number of reasons.

For my part, I am more interested in DIY as a symptom of deep and fundamental change in the market research industry.  When I began my career in MR (on the client side at first), most research companies were vertically integrated, owning their own data collection capabilities and developing their own CATI software, for example.  This made sense when the ability to coordinate and integrate the diverse activities required for a typical research project was a competitive strength.  Perhaps you remember the days when a strategic segmentation study might have three or four phases, take six to nine months to complete, and cost $500,000 ( in 1980 dollars!).  But vertically integrated industries tend to “de-integrate” over time.  Firms may spin off or outsource some of their capabilities, creating value chain specialists who are proficient at one link in the chain.  The emergence of WATS call-centers and off-the-shelf CATI software were early steps on the march towards de-integration for the MR industry.

Technological change (especially in the form of disruptive innovation) also provides opportunity for new entrants.  Sure, some of the face-to-face interviewing companies made the transition to telephone, and many telephone interviewing companies successfully converted from paper and pencil questionnaires to CATI, but each of these shifts provided a point of entry for new players.

The large, integrated firms have managed to hang on to a substantial share of industry profits, but there are three looming threats.  The first is (so-called) “commoditization”–the downward pressure on pricing.  While some supplier side researchers complain that clients are unwilling to pay for quality, this downward pressure is the result of basic competitive dynamics:  there are many competing firms, few barriers to entry, many substitutes (e.g., transactional datamining) and not that much difference in value propositions or business models across MR firms.

The second threat is do-it-yourself research.  At the moment, DIY appeals to the least demanding and most price sensitive customers.  DIY removes the access and affordability barriers, thereby democratizing survey researchAs Lucy and Richard’s research showed, customers like the low cost, speed and convenience of DIY, and I expect many will move up the learning curve quickly.  I hope so–many of the DIY surveys I’ve seen from even big companies have been pretty ghastly. 

The last threat to the traditional MR business model comes from the sheer deluge of data generate by both commercial and non-commercial online activity.  How much could Google tell any marketer about customer preferences based just on search data, for example?

At the end of the session in Athens I offered this analogy.  Imagine that you need a bedstead.  You could go to a furniture store and choose from a selection of attractive, well-constructed and expensive bedsteads.  Or you could go to the local home improvement store, purchase some plywood and paint or stain and with a few tools (which could be borrowed or renterd) and some minimal ability, construct a perfectly serviceable platform bed–at much lower cost.  This represents the difference between the full service integrated research firms at the top of the latter and what we’ve historically thought of as do-it-yourself market research.  The gap between the two has been sustained until now by a skill barrier and limited access to better, easier to use tools.  This is the gap that Ikea filled in the home furnishing market by creating a new business model based on attractive, customer-assembled furnishings. 

Unfortunately for the incumbent research firms, this kind of business model innovation does not often come from the current players in a market.  The incumbents have too much personal investment in the current business model.  Let’s face it–most of us are in market research because we like the high-touch, intellectual problem solving that’s involved.  It’s what we’ve trained to do.  Designing something like appealing flatpack furniture that customers take home and assemble themselves just does not fit our self-image.

The smarter, easier to use tools are here.  Who will be the first to package them into a new way to deliver market research?

Copyright 2010 by David G. Bakken.  All rights reserved.

I’m happy to announce that my paper, “Riding the Value Shift in Market Research:  Only the Paranoid Survive,” received the Fernanda Monti Award for Best Overall Paper at the 2010 ESOMAR Congress that took place in Athens on September 16.  More Info.

I’ll be speaking at the upcoming ESOMAR Congress (Athens, Greece, 12-15 September 2010).  You can find an abstract of my presentation, “Riding the Value Shift in Market Research:  ‘Only the Paranoid Survive'” by clicking here.  Click here to see the full conference program.

As I noted in my last post, the American Marketing Association’s Advanced Research Techniques Forum took place in San Francisco the second week in June (June 6-9).  The program is an intentional mix of presentations from academic researchers and market research practitioners.  While the practitioner presentations are often more interesting, at least from the standpoint of a fellow practitioner, this year the best and most useful presentations either came from the academic side or had significant contribution from one or more academic researchers.  In that last post I wrote about three papers that explored different aspects of social media.  Three more papers from this year’s ART make my list of the most worthwhile presentations. (more…)

The 20th occurrence of the Advanced Research Techniques Forum, an annual conference sponsored by the American Marketing Association, took place in San Francisco a couple of weeks ago (June 6-9).  For those of you not familiar with A/R/T, this conference brings academic researchers together with market research practitioners in a format that produces (nearly) equal representation of contributions from each of these two groups.  Half of the twenty presentation slots are reserved for “practitioner” papers (where the lead author is not an academic researcher) and half are held for papers from academics.  One of these academic slots is assigned to the winner of the annual Paul Green award for the best article published in Journal of Marketing Research in the previous calendar year.  More papers than in the past are collaborations between academics and practitioners, and choice of one or the other as lead author can impact the chances of getting on the program given the limited number of slots.

The program is assembled by a committee comprised of academics and practitioners (disclaimer–I’ve been on the committee a few times and was program chair for 2008).  In a typical year, the call for papers might yield around 70 submissions.   In addition to the presented papers, “poster” presentations are considered, and the program includes optional tutorials (extra cost) before and after the main conference sessions.

The A/R/T papers, especially those presented by academic researchers, can be dragged down by the weight of too much algebra.  Over the years, the “advanced” has more often referred to “models” than to “research techniques” in general, and this year was no exception.  Still, there were a few presentations that are noteworthy. (more…)

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