Rethinking The Conversation on Market Research Innovation

In market research, like any other industry, innovations that deliver real value through leaps in effectiveness and efficiency will stick. Anything else won’t.

 Innovation

 

By Steve August

Last month I had the pleasure of participating in a panel discussion on innovation at IIeX EU in Amsterdam. As befitting an event with Innovation in it’s name, the topic sparked lively debate and it got me thinking about the ongoing internal dialogue that the market research industry has about itself. The discourse on MR  Innovation generally runs along two main veins: the existential and the promotional.

The existential conversation is generally around wondering if market research is innovative enough. The answer is usually no and then everyone quickly moves into discussing such questions as “why isn’t it?”, “what can we do to be more innovative?”, and “wait, maybe market research is actually more innovative than we give it credit for.” On the other hand, the promotional conversation often finds its genesis in the release of a new innovative offering, which quickly moves to “is that truly innovative or is it just hype?” Like the existential conversation, it often leads nowhere definitive.

So what is innovation exactly? Merriam-Webster’s dictionary defines innovation as:

definition

By this definition (which is a pretty low bar), market research is a very innovative industry, as new methods, practices and ideas are constantly being introduced.

Except we still have those discussions and debates. So what keeps us going?

Innovation is really about leaps in effectiveness and efficiency.  More effectiveness means being do something better than we have previously. More efficiency means we are able to do things with faster or with less effort.  Electricity is a more effective and efficient way to light homes than say, whale oil or kerosene. Cars are more effective and efficient than horses. Google is a more efficient and effective way to search the ever growing and changing world of information than a set of Encyclopedias.

Leaps in efficiencies and effectiveness unlock value for the people they serve. Value is usually expressed in time, money, new capability, or experience. The most impactful innovations usually give people all of the above at great scale. For example, Hans Rosling in his TED talk, “The Magic Washing Machine” (http://tinyurl.com/pl37g7n) argued that the washing machine is one of the most important innovations ever created. Its adoption marks the point that developing nations accelerate as the time saved liberates half the work force, and boosts economic productivity dramatically.  Now, that’s delivering value.

Turning back to market research, a simple way to express the industry’s function is that it delivers credible, actionable market and customer understanding to decision makers. If we apply the notion that innovation is really about effectiveness and efficiency, innovations in market research need to deliver more accurate or actionable insights or deliver the same level of insight faster with less effort, or a combination of the two.

That seems straight forward, and it is fairly simple when dealing with innovations of efficiency. The only issue in terms of judging efficiency innovations in market research is in their impact on effectiveness. If efficiency compromises quality – for instance online sample that doesn’t meet the quality standards necessary – then the innovation does not deliver value.

On the other hand, the debate tends to be inherently less straightforward with innovations of effectiveness. Not only is it a more subjective and time consuming exercise to judge effectiveness, but also there is an added wrinkle within market research.  The wrinkle is that not only does an innovation need to be proved more effective; it has to be able to be normalized to previous methods.  Just being new and better isn’t always enough.

It has to be better and be able to be correlated to past results. As an analogy, imagine if every time you bought a shiny new phone, you had to make sure you understood the impact on your speaking and texting style compared to previous phones.  That might slow your upgrade process down just a bit.

Correlation with past methods is an area where the market research industry does offer a barrier to innovation that other industries may not encounter. Just look at the fuss that happens whenever Nielsen tries to adjust their television rating system.  Or why changing methodologies on trackers is such a daunting undertaking.

That said, there is a lot of excitement of about innovations that have promise, and it will be interesting to see which will prove out. By all means, let’s continue to debate and discuss innovation.  But ultimately in market research, like any other industry, innovations that deliver real value through leaps in effectiveness and efficiency will stick. Anything else won’t.

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4 Responses to “Rethinking The Conversation on Market Research Innovation”

  1. Charles Shillingburg says:

    April 1st, 2015 at 12:03 pm

    While correlation with past results, when judging Ratings Services like Nielsen or MRI, is the norm, this need not slow down innovation. Back in the 1980’s I developed and introduced the Power Media Reports that were revolutionary at the time. Our method was to focus on products purchased and not demographics (the norm), with demographics being an observation, rather than the driver of media selection. Within two years, the method became the primary too (methodology) used by automotive manufacturers and their agencies to develop publication media plans (over Simmons and MRI). The methodology not only provided publication “relationship” consistencies (e.g., monthlies to weeklies) with previous methodologies, but was more consistent with the automotive industry’s way of thinking about the industry and its consumers. This was a disruptive methodology at the time, much like Big Data today. In fact, Big Data follows the same behavior based logic we employed in the Power Media Reports, but provides information on a real-time basis. It is the next logical step, with Personas being an observation, with fluid, rather than static Target Markets. Like Big Data, the Power Media Reports increased efficiency and effectiveness of media selection, as its methodology more precisely corresponded to consumer behavior (and industry logic), allowing advertisers to more effectively understand and influence product purchase and repurchase. Innovations can be quickly adopted, if they better fit the mindset of users and clearly deliver better results (e.g., Sales) in a more efficient manner.

  2. Edward Appleton says:

    April 1st, 2015 at 12:03 pm

    Hi Steve, wishout wishing to become too specific, I’m surprised you don’t mention either disruption or dfisintermediation in the context of MR innovation. My view is that the DIY and DIFY options are the major MR innovations to highlight as having the biggest impact over the past 2 -3 years – process rather than purely product innovations, they potentially allow buyers to become both more efficient and more effective (more flexibility thanks to iterations due to lower cost per survey). If something can be automated and reach say upwards of 60% of the comparable result of something crafted individaually, then it’s likely to be investigated seriously.. If conversely a new MR tool offers 5% quality improvement (authenticitiy/ granularity, accuracy, speed), but is 15% more expensive, it would have to be a very specific case that justiified the investment – very strategic, large investments depend on the output. The pressure on budgets is invariably downwards/ genuine USPs are rare, often short-lived. On a divergent note, I’d suggest that the most important “new” we can all focus on in MR is on the quality and nature of advice generated by MR ouputs – innovation is indeed extremely important, but to be truly impactful across clientside organisations, it needs to be focussed on the result, far less the method.

  3. Steve August says:

    April 1st, 2015 at 12:50 pm

    Hi Edward – in my view, disintermediation is most valuable in that often great leaps and effectiveness and efficiency require disintermediation. Thinking of non-research examples, the Internet/Web disintermediated libraries, encyclopedias, and other holders of information. The ice machine in our freezers disintermediated the ice industry. Disintermediation is one, and often a necessary, part of an innovative leap. Disruption tends to follow disintermediation – ask any home ice supplier or encyclopedia sales person. In MR, disinteremediation in the form of DIY offerings are a fusion of innovation around product and process, and it might be argued expertise. It’s the last bit that makes it really tricky. There’s a threshold above which expertise is very hard to package and automate, especially in qualitative exercises. DIY is disrupting below that threshold where people feel like good enough research suits their purposes. Above that threshold there is still a need for more research expertise. And that’s where your final point comes in, and mirrors my take on MR as a decision support exercise. The big leaps in innovation will improve the he reliability, actionability while reducing the time and cost of obtaining and distributing that advice to decision makers.

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