Lately there have been several high profile new entrants into the “insights” business, most of them (but not all) from outside of the traditional market research industry. Examples range from some major global companies to small start ups. On a similar note, the Insight Innovation Competition GreenBook and NewMR are currently conducting is emerging as a showcase for even more companies that want to revolutionize the business of market research. It all adds up to a disruption of the market research industry that is simply unprecedented.
What this activity tells me is that the hunger for new ways to understand consumers is only increasing in urgency, while the commoditization of data continues apace. Market research simply is not the primary channel for data to drive strategic decision making today. In fact, it is quickly becoming marginalized as new business intelligence approaches deliver data cheaper, faster, and in a more useful way than traditional market research can. It’s an interesting dynamic, and one that seems to only underline the growing realization in most corners of the industry that the true value of the market research industry is NOT in data collection, but rather in generating insights that deliver real impact. This message has been echoed by many lately, both within industry media and at just about every industry event. It certainly seems that many of these new firms are building business models based on data delivery only, leaving the analysis and implications to others; it’s a twist on the old field & tab model, albeit applied to whole new methods that have little in common with survey modalities. Let’s take a look at a few of these emerging companies and then tell me if you agree with my analysis.
Perhaps the highest profile player to stake a claim for research is IBM. Brian Tarran at Research.live has an excellent overview of their strategy, informed by the results of a recent study the technology conducted with CMOs on the topic of data usage. Here is the crux:
Marcel Holsheimer, a former Unica and SPSS executive now working in the enterprise marketing management division of IBM, describes the world today as one that offers up as many threats as opportunities for companies. Failing to adapt your business to the online world could mean eventual demise, he says, but embracing Facebook and Twitter and heavy-duty analytics tools offers new avenues for growth.
All this data is “a great asset for companies once they are able to use it properly,” says Holsheimer.
But reaching that level of capability is a challenge in itself. To succeed in what Holsheimer calles “the age of the smarter consumer” requires companies to have a much sharper focus on understanding their customers and prospects as individuals – not as markets.
In IBM’s survey, 14 out of the 19 sources of data used by CMOs to influence strategy provide a market-level understanding – things like market research, competitive benchmarking and campaign analysis. The sources IBM sees as important for understanding individuals – analysing consumer generated reviews, blog posts and online communications – appear much further down the most-used list with only customer analytics ranking in the top five.
“CMOs are still reaching out to traditional sources which they have been using for many years,” says Elaine Fletcher, an IBM global business services partner, “but I think we will see a different picture in two or three years.”
Asked about the technologies they plan to invest in, over 80% of CMOs cited social media, customer analytics, customer relationship management and mobile applications. “Marketing is becoming much more of a technology play than it was in the past,” says Holsheimer – and technology is clearly an area IBM knows well. He sees a future where software is put to use in ways to make marketing “so good it feels like a service”. Examples in use today include the analytics tools that allow online retailers to make product recommendations to customers based on their own buying habits and those of similar customers; or the bricks-and-mortar retailers that dispense personalised coupons based on purchase history.
IBM isn’t alone in making significant investments to build a suite of tools that will make “big data” analysis a reality; big players like HP, SalesForce.com, Google, and Facebook are also doing the same thing (the ESOMAR blog has a great interview with Sean Bruich, head of Facebook’s Measurement Research group, on its ambitions in the research space). The momentum behind the idea of using a combination of VAST data sets and advanced analytics to produce insight-driven business impact is such that I think it’s now just a matter of fine tuning the approach and filling in the resource gaps to derive value from the process; in all other ways the age of data convergence is upon us and there is no going back. The U.S. government is even getting into the mix with their efforts to make science fiction science fact by creating their own version of “Psychohistory”.
Continuing down the list, this week we learned that Sun Microsystems co-founder Scott McNealy was launching a new company: a crowdsourced mobile social game for data collection called Wayin. Once again, Research.live has the scoop:
The Wayin experience is built around an iOS and Android mobile app that lets users upload photos and ask questions of other users.
At a launch event last week, McNealy described the concept as “a little bit of Facebook, a little bit of Twitter, and a big chunk of SurveyMonkey”.
It’s also similar in concept to Opinionaided, a Q&A app which has built up a community of users sharing photos and opinions with each other.
Wayin has raised $6.3m from early investors and it plans to make money both by inserting sponsored polls into a user’s stream as well as by making its database of opinion and sentiment available for analysis.
Wayin is a new twist on the mobile panel concept being explored by many market research firms, effectively creating a mobile omnibus for rapid data collection using crowdsourcing. Is it classical research? No, although it could get there. Will that matter to clients? Probably not. The ability to ask questions, get rapid feedback, monitor trending topics, review mobile meta data, and analyze that information for insight generation is a compelling concept that I suspect many CMO’s will flock to.
Research Through Gaming is the product of MR wunderkind Betty Adamou, one of the industry’s brightest young researchers. She has been hard at work for months now in prepping the launch of her new company and their first game, and it has finally arrived! Last week she debuted “Pimple Crisis”, a totally interactive research game. here is a video sneak peek of the game in action:
If you have not done so already, I heartily encourage you to also check out the Game Access blog, where Betty is Editor-in-Chief. It’s a great collection of news, case studies, and thought leadership on how gamification can be applied to drive value in many aspects of business, including market research.
I’ve been privileged to get a glimpse of some of the other things Betty and her team are working on and I can tell you that they are poised to make research games a viable method. The imagination, innovative spirit, and understanding of the requirements of researchers that form the foundation of their efforts are a sure recipe for success, and based on the movement into this area from companies outside of the market research space I believe that brands will be increasingly embracing this mode.
PartingGift and Stylitics are two such firms that have developed research-focused business models from a non-traditional perspective. PartingGift was recently profiled in Xconomy.com due to their work with Dunkin Donuts. Here is what Xconomy had to say:
Haven’t heard of the Dunkin’ Donuts game? Called On Your Mark, it debuted on the first of this month and lives on Dunkin’ Donuts’ Facebook fan page. The game interface pushes an image of a coffee cup along a virtual coffee assembly, with stations for flavor, sweetener, milk, and brew, with a virtual customer’s order. The player is responsible for correctly filling the order in the allotted one minute. The orders become bigger and the cups move faster as the players hit higher levels of the game. Ten players a day have the chance to each win $10 gift cards to Dunkin’.
On Your Mark does more than waste hours of the players’ time and earn the game developer money in the process, though, says PartingGift founder and CEO Brad Crowell.
“The whole game platform was designed with research in mind; there’s a strong data-collection component that’s part of our platform,” Crowell says.
See, On Your Mark starts off by asking the player to input their favorite Dunkin’ Donuts beverage to make at the virtual drive-through.
“We are looking to figure out what people’s preferences are in terms of beverages—that’s sort of the starting point of being able to understand what we can do with those preferences,” Crowell says. “We’re working with Dunkin’ on multiple games, building on that sort of information.”
PartingGift is another start up that is building a business through vision, pluck, and a refusal to let the status quo stand in the way of a good idea. Want to see the Dunkin Donuts game in action? Try the embed below and see what you think!
That’s certainly not how we would normally think of conducting a preference study, but I suspect it works very well indeed and that PartingGift will continue to create ways to deliver engaging data-driven games to consumers that will make surveys look antiquated to say the least.
Last but not least, we have Stlytics. As the name would suggest, it is a fashion-centric offering that incorporates analytics into the value for brands. The company was recently showcased in Inc. and the article made quite a splash within the market research Twitter community with the title “Market Research is the new Black”, although I think everyone was shocked to discover that the subject was a non-MR company using gamification to disrupt the traditional research paradigm. If there was any doubt on their target, the company website removes it:
Traditional market research is expensive for you, boring for consumers, becomes stale quickly, and only measures intent, not actual consumer behavior.
Stylitics gives consumers a way to interact with you and to share their behavior in a way that’s closer to a game than to old-fashioned market research. Through our customizable online analytics dashboard, you get rich, meaningful insights on what your customers actually own, wear, and buy – from you AND from other brands – in real-time!
Here is a screenshot of one of the user interface pages:
…Deuskar points out the importance of information not just for forecasting, but for real-time marketing. “Let’s say I’m a marketing manager for a brand and we’re deciding if today’s e-mail offer should be pencil skirts,” he says. “Now I can see all instances of people who have worn pencil skirts to work in the last two weeks, what colors, what style of shirt or blouse they wore with it, the average price point and the demographic of those who wore them to help me make my decision.”
Deuskar and Davis won the grand prize at the Wharton Business Plan Competition this past April (Deuskar is a Wharton alumni). Stylitics has nine employees now, a small board of advisors and several apparel industry partners who signed on during the beta phase, says Deuskar, like market research firm Gilt Groupe and Lucky Brand Jeans. So far the founders have raised about $750,000 from angel investors and early stage venture capitalists. Although revenue will ultimately be driven by the analytics offering, the site will also allow for targeted advertising and affiliate sales. Deuskar says Stylitics will be out of beta before year’s end; right now you have to be invited to join.
Tamara Gruzbarg, senior director of analytics and research at Gilt Groupe, says the company is “turning market research into an interactive platform.” Users are essentially a large market research panel, providing information about their purchasing and fashion habits. “There’s definitely a need for this information. And it could be much more detailed and personal than what you get from spending two hours in a focus group,” says Gruzbarg.
Gilt Groupe is watching to see how Stylitics will evolve. Will the necessary critical mass of consumers log in their fashion information to make the data valuable? And will market research firms and other companies sign up to get that information? If they do, Gruzbarg thinks it could raise market research to a whole new level.
“The idea that people will take the time to provide much more detailed and rich information than is possible in traditional market research is the reason why we are interested,” she says. “That kind of information could be extremely valuable to us.”
That last paragraph sums up why Big Data, mobile, gamification, social media, MROCs, and other new methods are growing so rapidly. Brand seem to be increasingly impatient with the pace of innovation in market research and are looking for alternatives that deliver value outside of simple data collection and analysis. Although no one is saying that traditional research approaches should not be used for many types of strategic research projects, more and more client needs are focused on business issues that the rigor of the old tools are simply not needed (and in most cases not suited) to address.
From one of the largest Bluechip firms in the world to start ups using a variation on a theme, we’re seeing rampant disruptive innovation in the market research space. What may appear to be noise from the chattering classes to some is in actuality the front of a tsunami of change that will profoundly transform the business of market research over the next five years. As the barriers of entry come down and new business, technological, and societal realities fuel the need for new models to understand and engage consumers at the same time, this wave of disruption threatens to overwhelm market research.
As the recent GRIT study showed, the majority of researchers believe significant change is underway now, although what we don’t know is how many are embracing that change. Based on what I see happening with the five companies we’ve looked at here and many more that I’ve mentioned in the past, it is clear that it’s time to get to the top of this wave and ride the transformation. The days of thinking that business as usual will succeed are over; we better start paddling hard if we want to remain relevant after the waves finally crest.