Recently Alastair Gordon has asked “who’ll own MR in 2020?”
By this Gordon means to ask which players will dominate the market research industry.
His thesis is that the answer changes based on the year, but that one probable future is the rise, and ultimate dominance of the sub-contracting firms upon which full-service shops often depend. Several years ago the answer would have been the big advertising and communications holding companies (Aegis, WPP, etc.) More recently one answer might have been private equity. But, Gordon now thinks that the sub-contracting firms that provide full-service shops with data collection, data processing, sample, etc. are positioned to overtake the traditional MR firms.
As Gordon puts it:
“Just as researchers wonder how marketing consultants can justify their fees, increasingly the “servants” of market research are feeling that maybe their “masters” don’t deserve their profits.”
This is an interesting proposition. How will these sub-contracting firms break through? Gordon sees several different paths:
1. Out-sourcers grow up and offer more advanced services until they become full-service shops themselves.
2. Technical firms will gain entry via DIY solutions on the desktop and become data mining and integration experts who stay sticky with a portal or other GUI.
3. A final scenario, and one that feels a bit out of place with the article, is the rise of the external consulting company (think IBM, McKinsey, etc.) within the classic MR space. This has been well discussed on this and other venues.
While only time will tell, I have several thoughts on the issue.
1. This article assumes the “market research industry” will be recognizable in 2020. I believe that the industry will have undergone so much change by 2020 that (a) it might not even be called market research, (b) the players will be radically different (c) the tools will be dramatically enhanced-evolved and (d) the newer employees in this field may not think of themselves as “market researchers.”
2. Assuming that the trend toward commoditization of insights continues, these subcontracting firms may indeed be the major players of 2020.
3. But, I think more likely scenarios are that:
3a. New entrants from analytics firms, consulting firms (McKinsey, BCG, etc.), MROCs, neuromarketing and social media agencies transform the business and marginalize traditional players.
3b. Google, Facebook or other large online players become the sample provider of choice and then develop their own DIY and custom research offerings.
3c. The industry undergoes radical “free-agentism” with large numbers of current employees taking advantage of their skill sets and low barriers to entry and going out on their own. With each one touting their unique sector or research expertise, client side buyers begin employing a short term army of Davids via a MR version of the mechanical turk.
HI, Thanks for the reference, and glad my post interested. Your points are well taken, and I agree the industry could look very different in 10 years. But a couple of points:
- Since this post I’ve had a LOT of emails about “data, sub-contractors taking over” (it’s interesting how threatened some MR people are by such an idea!) but the core scenario in my post was about how various kinds of unlikely firms who currently supply information to MR agencies and clients could expand – this could well include consultancy firms as you mention, but also software/DB and other information amalgamation orientated outfits. Your point about Google et al is important in this regard.
- I think some neuroscience and social media agencies may well expand rapidly in the next few years and some of their owners will do very well indeed – but the most successful will be bought out by traditional agencies and the emerging types of new players.
- My guess is that the changes happening will make the underlying RESEARCH skill sets of MR still highly relevant: analytical skills, information synthesis, data-based consulting etc. So while the methods may change, and MR people may work in lot of different places (not just agencies and research departments), I think there will still be lots of people who will be pleased to class themselves as “market researchers”.
Anyway, it will be an interesting decade!