I recently saw an astonishing fact about the market research industry. According to the annual “Top 50 Report” by Jack Honomichl[1], 24 of the 50 largest research firms in the U.S. experienced a drop in revenue in 2012. Given that there were as many gainers as losers last year, we have a clear signal that fundamental shifts are afoot in how organizations gather insights.
Mr. Honomichl provided some explanations on what is driving the change and I would like to weigh in with my own thoughts on what is occurring and what this means for our profession. While Rockbridge is not a “Top 50” firm, we were in the “gainer” category, which might hone our views.
DIY Empowers Researchers. 
Honomichl noted a decrease in custom research which he attributed to economic conditions. I believe another issue is that Do-It-Yourself tools save time and money for companies with the dedicated research staff to write and field their own “custom” studies. For companies like Rockbridge, this has been an opportunity because we are able to support our clients on the more sophisticated studies that require special expertise in a business solution or methodology. Many of my peers complain about low-end web solutions like Survey Monkey, but I suspect such applications are primarily fueling web surveys among non-professionals who would not have commissioned surveys to outside firms in the first place. This new class of “empowered amateurs” is not a threat to research professionals, but is probably fueling the decline in response rates. Summing it up, high-end DIY solutions reduce revenues for low-end research providers, while low-end DIY solutions create more surveys all around.
Winners: boutiques with special expertise.
Losers: field and tab specialists.
Focus Groups are in Decline. This iconic methodology experienced a decline in the key index last year. Honomichl believes this could be driven by reliance on other alternatives for gathering qualitative insights such as social media mining. Another factor, which we are experiencing firsthand, is a rise in new virtual qualitative methodologies. Increasingly, we are addressing the “exploratory phase” of a project with new methods such as social-media like discussions with OpinionPond™. Other shifts include doing more focus groups by phone/web, mobile ethnographies, and depth interviews with a video link. It is becoming increasingly harder to find “typical consumers” who are willing to drive in rush hour traffic to a central location, or clients who like to fly around the country, regardless of the candy and crabcakes.
Winners: purveyors of new technology-based qualitative methods.
Losers: the moderator superstar who puts on a great show in front of the mirror.
The Internet makes Data Collection More Efficient. Honomichl notes, and I fully agree, that revenues are decreasing because of lower project costs when research is conducted on the web. While we still need to cover the costs of trained professionals for the design and analysis tasks, we are increasingly cutting out the costs of interviewers or printing and postage. However, the survey methods are constantly changing to adapt to the way consumers communicate. Just as Rockbridge was an early user of web surveys, we have shifted data collection smoothly to mobile and point-of-sale surveys.
Winners: researchers who embrace and continually reinvent survey platforms.
Losers: traditional data collection centers who are unable to handle unconventional projects.
Research is now conducted seamlessly on a global scale. I recall almost 20 years ago losing a large telephone tracking study because our travel industry client, that operated in several countries, shifted the work to global research supplier. Today, Rockbridge is a global supplier and conducts numerous studies with travelers in multiple countries and languages for a fraction of the cost of that telephone tracker. The Internet is the obvious driver of this change, but the way it has transformed research is more nuanced. For one, most customers of interest to our clients are now online regardless of where they live. Further, the Internet fuels global business, allowing companies and non-profits to market their brands seamlessly in multiple countries. To embrace the opportunity, we rely on new resources such as global web panels and software that easily uploads translations. The challenges of global research are still daunting enough to prevent attempts to “DIY,” but global studies are now a standard offering at Rockbridge and not the exclusive domain of large multinational research firms.
Winners: service-oriented research companies with the software and knowhow to conduct global surveys.
Losers: research giants who can coordinate multi-country studies through local offices.
The Honomichl statistic brings to mind the cliché question: is the cup half empty or half full? The number of firms with declining revenues is the highest since the great recession, but I believe the factor driving the statistic last year was due to change that on the whole is positive. We are finding more effective and less costly ways to achieve the same goals. Just as there are losers, there are many winners among the research companies and insights professionals who have taken advantage of the opportunities provided by technology and globalization.
[1] “The 2013 Honomichl Top 50 Report”, by Jack Honomichl, Marketing News, June 2013.
Written by: Charles Colby, Chief Methodologist