In our Creative Destruction 7 Act Play series, we have looked at the following markets: Financial Services, B2B Media, STM Publishing, Education, Legal Publishing, Advertising, eCommerce.

We now turn our attention to Market Research. In this Part 1, we look at the current cash cows and market incumbents.

Market Research grew up with advertising during the radio age of the 1920s. It grew much bigger during the TV age of the 1950s, but remained essentially the same. It is now being fundamentally reinvented during the Internet age.

Image courtesy of Flickr and Miller Info Commons.

In our Creative Destruction 7 Act Play series, we have looked at the following markets: Financial Services, B2B Media, STM Publishing, Education, Legal Publishing, Advertising, eCommerce.

We now turn our attention to Market Research. In this Part 1, we look at the current cash cows and market incumbents.

Market Research grew up with advertising during the radio age of the 1920s. It grew much bigger during the TV age of the 1950s, but remained essentially the same. It is now being fundamentally reinvented during the Internet age.

Image courtesy of Flickr and Miller Info Commons.

Current Incumbents And Market Size

Here is a snapshot of the 9 biggest market research companies:

This is NOT a consolidated market, unlike some of the publishing markets we have looked at. There are lots of small research companies that do very well.

Huge Array Of Services

The Market Research industry has evolved a large variety of techniques over many decades. But they are mostly aiming at answering one big question:

“WHAT IS THE CUSTOMER THINKING?”

That insight can guide product development and marketing.

The techniques boil down to 2 main types (gross simplification alert):

1. Ask them directly – focus groups, surveys, field tests, interviews. The Internet makes it easier to fill in forms and collect this data. But it does not solve the bigger problems of a) motivating people to take the time to do so and b) correlating what people say they will do with what they actually do.

2. Observe what they say and do. This is where the Internet has changed the game as it is so much easier to observe what people do online. For example, AB testing, which grew out of direct mail, was updated by Amazon and has become a core technique for online marketers. In simple terms: don’t ask users if they prefer Price A or Price B, offer them both and see what they do.

Observe What They Say – Sentiment Analysis

Sentiment Analysis is a market that we cover a lot on this blog. It is a new technique in market research based on the ability to observe what people say en mass as they write in social media.

As Jenny has documented, this field of market research is still very new and the results have not yet reached the level of accuracy where companies can rely upon them for big decisions. But it is potentially game changing.

Historically we have never had an opportunity to listen in to conversations. Social media has opened that up (albeit within constraints: people do want to control what is public and what is private). These conversations are inconsequential to all except the participants… until, that is, they are aggregated, structured, and analyzed. This is not simple to do, as security and intelligence agencies have long understood.

Secondary Analysis

A lot of energy in the current market research industry has been expended on primary market research. The major issue was how to create the data in the first place. Getting the analysis out was relatively easy.

This is changing. The greatest value can now be generated from secondary analysis. Raw data is being generated in massive quantities, from online transactions, from social media conversations and from sensors and other devices that spit data into the Net.

The challenge is now increasingly how to extract meaning from this data. This is where we see the innovation coming from.

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Current Incumbents And Market Size

Here is a snapshot of the 9 biggest market research companies:

This is NOT a consolidated market, unlike some of the publishing markets we have looked at. There are lots of small research companies that do very well.

Huge Array Of Services

The Market Research industry has evolved a large variety of techniques over many decades. But they are mostly aiming at answering one big question:

“WHAT IS THE CUSTOMER THINKING?”

That insight can guide product development and marketing.

The techniques boil down to 2 main types (gross simplification alert):

1. Ask them directly – focus groups, surveys, field tests, interviews. The Internet makes it easier to fill in forms and collect this data. But it does not solve the bigger problems of a) motivating people to take the time to do so and b) correlating what people say they will do with what they actually do.

2. Observe what they say and do. This is where the Internet has changed the game as it is so much easier to observe what people do online. For example, AB testing, which grew out of direct mail, was updated by Amazon and has become a core technique for online marketers. In simple terms: don’t ask users if they prefer Price A or Price B, offer them both and see what they do.

Observe What They Say – Sentiment Analysis

Sentiment Analysis is a market that we cover a lot on this blog. It is a new technique in market research based on the ability to observe what people say en mass as they write in social media.

As Jenny has documented, this field of market research is still very new and the results have not yet reached the level of accuracy where companies can rely upon them for big decisions. But it is potentially game changing.

Historically we have never had an opportunity to listen in to conversations. Social media has opened that up (albeit within constraints: people do want to control what is public and what is private). These conversations are inconsequential to all except the participants… until, that is, they are aggregated, structured, and analyzed. This is not simple to do, as security and intelligence agencies have long understood.

Secondary Analysis

A lot of energy in the current market research industry has been expended on primary market research. The major issue was how to create the data in the first place. Getting the analysis out was relatively easy.

This is changing. The greatest value can now be generated from secondary analysis. Raw data is being generated in massive quantities, from online transactions, from social media conversations and from sensors and other devices that spit data into the Net.

The challenge is now increasingly how to extract meaning from this data. This is where we see the innovation coming from.

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