A review of the challenges facing the market research industry suggest that the industry is at an evolutionary inflection point in which external pressures will create an industry qualitatively different from the one that existed only several years ago.

There are many challenges facing the industry, but they can be grouped into ten (10) basic categories and ranked by severity:

• Societal
• Technological
• Positional
• Perceptual
• Linguistic
• Speed
• Market Structure
• Human Capital
• Global
• Economic

Societal:
Society is changing rapidly and market research is struggling to adjust to these shifts. Market research’s basic societal challenge is the disintegration of the mass market-mass advertising model. The first part of this challenge is dispersion in consumer interests, choices and consumption, the so-called “long tail.” The second part of this challenge is the rise of social networks and peer to peer communications and the corresponding decline of authoritative vertical communications. This shift challenges the basic model of top down stimulus-response that marketing and advertising have operated within for many years.

Technological:
The market research industry faces five (5) basic technological challenges. These are: (1) the migration of the consumer from landline phones to mobile phones and the corresponding decline of phone-based polling, (2) the corresponding rise of online research and attendant quality concerns (e.g. panel quality, speeders), (3) technology generated consumer freedom to watch what they want when they want it (DVRs and online), access more product information than ever before, and substitute peers for traditional market authorities, (4) the expanding gap between data processing speed and the ability of humans to analyze this data, extract insights and build strategy, and (5) creating processes that enable researchers to pull insights out from new and evolving technologies (e.g. hosted online communities, eye tracking, text analytics).

Positional:
Historically, the industry has been tasked with execution of research that delivers data, but has been generally shut out of a wider strategic role. This is a byproduct of market research’s limited position in the strategic decision chain. For example, market research is typically tasked with understanding the consumer mindset, testing consumer awareness and interest in a product, testing tactical marketing executions and reporting these back into the decision chain. Unfortunately, market research’s role does not span the breadth of the institutional decision chain. Instead, market research plays a limited role somewhere in the middle, after basic assumptions have been established, after key initial decisions have been made, and generally (but not always) before a final strategic direction has been chosen.
Instead of accepting this limited role, market researchers must work to expand their role with their clients and within the companies that employ them. One key to expanding their strategic role is to examine (and test) the unstated initial assumptions at the beginning of the decision chain. All too often the market research professional is brought in to test a series of tactical options based on questionable assumptions. Market researchers are experts in formulating questions to analyze a topic. They focus this skill externally on target audiences. But, in order to gain a stronger footing within the corporate decision chain, they should also leverage their questioning skills internally by creating a process that examines the often unstated assumptions upon which their research is commissioned.

Unfortunately, the industry’s positional weakness is exacerbated and reinforced by (a) market research’s image as a tactical data provider and (b) its poor linguistic positioning. This leads to the potential for market research to be viewed as a commodity, instead of a high value consultative service. And the risk of commoditization is one of the industry’s greatest future challenges.

Perceptual:
The market research industry has historically struggled with the perception that it is a process heavy, producer of tactically useful data, not transcendent insights or data driven strategy. This perception has been a double edged sword. On one hand, the correct perception that market research is complex and process heavy has been helpful in protecting research and data integrity. It has also helped market researchers carve out their institutional niche. On the other hand, it has stifled market research’s ability to add higher level data driven strategy. It has created a comfortable corporate cul de sac for market research, but one too far from the main street of corporate decision making.

Linguistic:
The term “market research” has been incredibly detrimental to the industry, as it focuses on the process and not the value of the data driven strategy. The term “market research” has minimized the industry’s influence within the corporate decision making structure by reinforcing the notion that market research is all process and data and that market researchers manage the process and data delivery, but not insights or strategy that flows from this process.

In itself the term “market research” as a name and concept was always too limiting for industry professionals and should have been ditched long ago. In fact, the term “market research” has been incredibly harmful to those working in the field, because the term “market research” focuses on the physical act of research, but not on the value that flows from this work. This puts the industry and its professionals into a commoditized data collection box in which their primary value is the getting of data, not insight and certainly not strategy.

In a sense, “insights” is a much better term, because it concentrates the mind on the value derived from the data. But, “insights” as a term is still sub-optimal in that (a) it completely omits what will be done with these insights and (b) the strategy that will flow from them. These two standard terms for the industry put a ceiling on its value by omitting any reference to higher level strategy. If the term “market research” is replaced with something else in the future, the change will be a welcome one.

But what should the industry be called? Although the industry or key players in it should strongly consider hiring a branding agency to assist in renaming and repositioning, the following is a quick look at some of the more interesting alternatives.

Based on this analysis, “strategic insight” or “strategic foresight” may be advisable. The first focuses on the higher level strategic value that the industry delivers. The second focuses on the strategic predictive value that is delivered.

Speed:
The global, 24-7 nature of world society and the technology that enables rapid, mobile communications has produced a business culture in which corporations can and must make decisions more quickly than ever before. As a supplier of strategic insights that must be incorporated into this ever quickening decision making loop, market research is being pressed to collect data, identify insights and make strategic recommendations at a pace that challenges traditional timelines and threatens data quality.

This challenge is exacerbated by market research’s general perception as a data vendor and not as a strategic partner. When it is seen as a strategic partner, market research has the gravitas to demand deeper thinking and greater time to the study of a problem or opportunity.

Market Structure:
The increased need for data driven strategy and the proliferation of new, technology driven, research platforms will inject a number of new entrants into the traditional market research space. These new entrants are (a) management consulting firms that need more market data to support their strategic consulting practices, and (b) new research platforms based on new technologies like hosted online communities, passive listening reliant on text analytics, online dial testing, eye tracking, etc.

Human Capital:
Market research professionals are incredibly bright, intellectually agile, and innately curious. Unfortunately, most are introverted and could be stronger at spreading their data driven insights and strategic recommendations. Moreover, many are content to conduct quality research and deliver data based insights without a strong strategic role. This human capital and personality mismatch has only reinforced the industry’s perceptual, positional and economic challenges.

Global:
As products and ideas flow more freely across the world at a rapid pace, the need for global research capabilities that deliver quality, multi-country data and insights that ladder up to a global strategy is critical. As a technical matter this no longer requires large global firms, but it does require globally savvy researchers.

Economic:
The industry has both short term and structural economic challenges. The short term economic challenge is the economic slump of 2008. But the long term economic challenge is driven by several forces, including (a) commoditization threats driven by the perception that the industry provides data and not insights or strategy and (b) new market entrants from a variety of corners.

Interrelated Challenges:
Many of these challenges are interrelated and mutually reinforcing. For example, the societal and technological challenges provide entry points for new market players. The industry’s positional, perceptual and linguistic challenges provide an opening for management consulting firms to enter this space.

Analyzing management consulting as a new market entrant is alone very interesting and one way to see many of these challenges at work. Management consulting’s strengths are its gravitas, the ability to tell a story with the data it can find, and the ability to lead a client through a process that results in a strategy. What management consulting generally lacks is consumer or employee data to build or support its strategy. Market research’s strength is the rigorous collection of high quality data, a process of analysis that extracts insights from this data, and the application of the insights to higher level strategy. What market research has historically lacked is a solid seat at the table within the elite corporate decision making ecosystem. As a product of this, it has also historically suffered from the perception that it is a data collection arm and not a strategic partner.