Has The Market Research Industry Missed The Train?

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Market Research Industry

In one of the keynote speaker sessions at the recent 2011 Market Research Association Annual Conference, in Washington DC, a delightfully loud and dynamic banter went between Marshall Toplansky from Core Strategies and Bill Neal from SDR Consulting trying to answer questions such as:

Is marketing research really able to deliver on the critical needs of today’s (and tomorrow’s) enterprise?

Most of the discussion revolved around the pros and cons of using social media in market research. Toplansky  focused on the need for a real-time flow of data, which social media can provide, while Neal called researchers to be the voice of the customer and make sure the data we gather, no matter the channel, represents the target market.

According to Toplansky, the type of information the traditional market research provides is irrelevant to decision makers. Big corporations, which are responsible for 85% of the market research expenditure, are funding real-time, continuous flow of information on which they can make decisions on (e.g. lead generation, sales, promotions, competitors’ impact, etc.), which has been made possible by technology. For Toplansky, it is about harnessing technology and providing daily information at a cost that is equivalent to years of doing tracking research.

Neal, on the other hand, argued that our role as researchers is to find out what is going on in the market place and why. According to Neal, the” why” is not being addressed by the new technology.  He is also an ardent supporter of sample representativeness. No matter how large the amount of information we may be able to collect via social media, we always have to ask if it is representative of our target market, which Neal claims, it is unlikely to be.

Our role as market researchers is, said Neal, to be the voice of the customer, but unfortunately market researchers don’t have a place in the C-suite. Most researchers work for the CMO, but the money is managed by the CFO. This is often reflected in research guided by the “I have to have it now” mentality which often leads company astray. Unfortunately, the people who are users of consumer data are not able to judge its quality, said Neal. Corporate researchers have to act as the guardians of data quality.

For Toplansky, representativeness is more about finding consumers who are engaged with a particular brand or product category than demographic representation of the population. Companies don’t care about the general population, but about the consumers who will buy their products.

Since many companies are run quarter to quarter, argued Toplansky, it is about building the business around empirically read mass observations, and correlating sales numbers, channel-through sales numbers and other relevant metrics. The reason we are not in the C-suite, said Toplansky, is because researchers don’t speak that financial language. We fail to translate consumers’ preferences and understanding into a continuous flow of data needed for decision making.

For Toplansky, traditional market research is too slow and expensive, so finance managers default to the information they have at hand under the mantra that “some data is better than no data,” and “it doesn’t have to be perfect.” This attitude is very detrimental to the perceived value of the market research function.

Although both speakers sounded like coming from opposite points of views, I found that their arguments complemented each other:

  • Social media can provide invaluable consumer data, but we need to make sure that what we hear in social media represents our target market, that is the consumers we are after, which may or may not be representative of the general population.
  • Social media research can be a source of valuable insights to explain the results from traditional research and even help to design better data collection tools (i.e. surveys, discussion guides, IDIs).
  • Social media can help to explain the “why” behind sales and market share data. This requires better text analytics tools that allow us to dig deeper in the content provided by social media.
  • Triangulation of different data sources, including social media, is needed to translate consumer research into financial terms and increase market research’s predictive power. There is not a research method that can do this on its own.
  • Market researchers need to find ways to provide more timely and relevant information to support decision making.

In my view, the market research industry has not missed the train. The train has just arrived and we are all trying to figure out how to hop onto the wagon without leaving valuable knowledge behind at the same time as we inspect how this new train works and where it can take us.

Comments Comments

Jeffrey Adler Posted: June 13, 2011

On some level it is astounding that there is so much discussion on “social media vs. traditional market research.” Social media is not a particularly close kin to market research — it is much closer to “Consumer Relations.” Most large companies have formal Consumer Relations functions — either an inbound toll free phone number and/or mail/email “contact us” functions. From virtually day one, companies recognized the opportunity to produce reports summarizing these contacts.

Of course the percentage of customers who actually contact a company is typically very small, and almost certainly NOT representative of its overall customer base. Social media represents an improvement on some levels of consumer relations — in that the “sample sizes” suddenly get large, and they do so very quickly. This is terrific — but nobody ever confused Consumer Relations with traditional Marketing Research, so why confuse social media with traditional MR?

I pose the question rhetorically, but unfortunately it has an answer. I believe this is simply a typical case of people believing what they would like to believe, regardless of whether or not that represents reality. If you could get these people to share their thoughts, it might be represented by, “My mind is already made up — don’t confuse me with the facts.”

Di Tunney Posted: June 14, 2011

The comparison that I believe is being made here is the value of social media data as a research resource vs. data collected by more traditional research methods. As an experienced market researcher I have now moved into social media based research in a serious way for a number of reasons. Yes the data is indeed very ‘current’ and the continuous flow makes it a great resource for identifying patterns & trends, but even more importantly for me it is the fact that it is consumer generated content untainted by clients’ or researchers’ own views on what it is useful or important to ask the consumer about! It is also shared from their natural habitat and not a place assigned for ‘conducting research’ which inevitably affects the responses given.
We hear much talk about representative samples in this new field and I hold the view here is that no it isn’t representative as we have defined it in the past and completely agree with Toplansky when he says says ‘representativeness is more about finding consumers who are engaged with a particular brand or product category than demographic representation’. So, we need to learn to work with it for what it is – data provided by consumers who are keen to share their thoughts , opinions and more often than not feelings, with a social media community that they ‘belong’ to and that these are important consumers to listen to and interact with.
Also it is requiring attention at C-level and strategies to be put in place to not only respond effectively to what is being but also engage in the conversation.
We are moving into a Brave New World and I believe that we resist the challenge that ‘using as a social media as a learning platform’ presents at our peril!

Michaela Mora Posted: June 14, 2011

Well put Di. Many want to hold on the illusion of representativeness based on the notion of random sampling, despite that even more and more surveys are using targeted samples and the response rates are terrible. I agree with you that the advantage of social media is that you get unsolicited feedback that is more likely to represent what consumers really think, feel and behave. We just need tools that make the extraction of insights from this type data more efficient and cost effective. Although the data is free, its processing it is not if we want to go beyond word clouds and rough sentiment counts. We still need humans to get quality insights from the enormous amount of data social media generate.

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