Rubinson takes a look at the evolution of the ad agency and applies this evolutionary footpath to MR with media buying the analog to the data collection side of the business and creative the analog to the full service, analytics side of the business. It’s worth a read.

In my thinking about the future of the MR agency, I have developed at least five (5) plausible futures (not mutually exclusive):

1. Army of Davids: In this scenario, the larger firms keep consolidating and attempting to buy their future by acquiring hot new companies, but the systemic change and “free agent nation” overwhelms them. The goliaths are killed off by the Davids. The carriagemakers can’t adjust to the age of the automobile, and they are overhwelmed by new entrants, new technologies, new approaches (social media listening, etc.) and agile specialty firms.

2. Whuffie-Driven Free Agency: A second and more extreme “Army of Davids” scenario, Whuffie-driven free agency develops when individual researchers band together under a kind of digital guild in which each is rated by his-her clients. The resulting client score, their Whuffie (hat tip to Cory Doctorow’s “Down and Out in the MagicKingdom”) roughly determines an individual researcher’s compensation if and when they are chosen to do the work. Sound fantastical? Hardly. Consider: (a) eBay feedback profiles and (b) the mechanical turk. Now assume that a community of credentialed researchers (think PRC or similar) build an elance site on these principles. Insights rockstars, as opposed to large companies or even specialty firms, dominate the scene.

3. Convergence: Under the convergence scenario the MR industry is renamed, rebranded and redefined by a much larger collection of data-driven strategic consultants, including: management consulting, social media listening and analytics firms, predictive markets, game modelled consumer behavior research, foresight practices and IBM. Under this scenario, the first to combine all fields in an integrated way gains a significant advantage. The deepest pockets are the most favored here.

4. Incredible Shrinking MR: In this scenario the market research industry retains its current, distinctive, identity. It is not reinvented or transformed. Plenty of new innovations come along, but they’re not part of MR. MR labors on, like the dinosaurs after the first asteroid strike, oblivious of their doomed future.

5. DIY: Google, Facebook and future social media platforms enter the consumer research business by offering unimaginably massive panels of their users-members. With MR now a simple page on these social media sites, the era of DIY research is fully unleashed. Need a quick, global survey of fashion conscious, well-educated women? No problem. GoogleSurvey will collect data for you in 30 minutes after you have posted your (mandated) 5 questions or less survey. Need some collage-based qual done in 20 countries on a new tourist destination? No problem. 3 hours. Survey quality suffers, but the data is abundant. Insights? Well, those are a bit tougher to come by.

Tom Anderson promos the RIT a bit over at Next Gen Market Research. It’s worth a look.

The top two concerns are:

1. The non-representative nature of online samples
2. Quality of online sample is worse than most believe

Clearly these two concerns complement each other.

Although Jeffrey Henning is right about random samples vs. so-called “convenience samples”, the industry has clearly embraced “convenience samples” as the next best thing to purely random studies.

Stay tuned.

This year’s RIT study promises much more.

(Of course, I should disclose that my firm, StrategyOne, and I were pleased to be included in the survey design discussions for the RIT, and so I do have some “skin in the game.”)

Marshall Toplansky, President of WiseWindow, explores this question and scans the horizon of market research in a new MRA Alert article. For those MRA members, I highly recommend reading Toplansky’s article titled “Measuring the Future of Market Research.”

Reading this article reminded me very much of the things I’ve been writing on this platform and in my white paper (“Insight’s Future; From Market Research to Strategic Insight”) and I’m glad to see others thinking along similar lines.

One area of considerable agreement is what he titled “the new expectations.” Here Toplansky is, at base, writing about organizations’ increasing “need for speed” and how this is impacting traditional market research. Think James Gleick (of Faster book fame) meets Simon Chadwick.

As Toplansky colorfully puts it:

“To today’s CEO, a six week qualitative study to find a simple answer is a slow moving elephant in a race for gazelles.”

I believe that clients now have 8 demands of market research:

1. Strategic Recommendations
2. Concise Deliverables
3. Deeper Insight into the Whole Consumer
4. Speed
5. An Integrated Understanding of the “Infoverse”
6. Truly Understanding the Role of Emotion in Human Behavior
7. Insights Management
8. Value

And speed is #4 on my list.

Given the compressed decision making cycle in corporations, there is certainly a need for faster data collection, analysis and reporting of insights. Of course, “fast” and “deep thinking” are difficult to combine. And, there are limitations on how quickly good research can be conducted. But, there is strong client demand for speedier delivery of research based insights and firms that can work quickly, using a 24 hour “global clock”, will be at a significant long term advantage.

As I noted in my white paper, this threatens the large traditional suppliers who do not appear to be built for speed. For them it will be imperative to argue for a deliberative process that tests assumptions as well as hypothesis. But, when it comes to speed, these large suppliers will be at a disadvantage relative to smaller, nimbler firms.

Of course, Toplansky takes his speed argument further and merges it with the emergence of what some have called social media “listening posts.” Here he rightly argues that mass analysis of unstructured, “unsolicited and unexpurgated” comments across social media platforms can provide organizations with a new kind of real-time tracking system – a trends and insights stream.

I generally agree with Toplansky’s argument. We have certainly seen a rapid development of social media research tools, and in time these will become incredibly powerful. To my thinking there are two key hinge points in the development of social media listening. The first is improvements in the analysis of unstructured text. The progress being made here is impressive, but the human element is still needed. The second is the representativeness of social media engagement. We assume that social media usage will continue to explode and eventually become ubiquitous across generational, gender and SES lines. This seems to be a solid assumption, but we’re not there yet and participation frequency rates can differ dramatically. I freely admit that projectability in the survey sense may not be a valid critique in this instance. My second concern about participation rates is the privacy issue. In my scenario building for the futures of market research, at least one scenario has privacy concerns reversing some of these basic assumptions and challenging the development of “listening posts” altogether. In fact, Jeffrey Henning is giving a speech on this very issue today at the CASRO Technology Conference. The title of this speech is “Um, We Didn’t Know You Were Listening.” As Henning puts it in his synopsis, “Unlike the traditional ethnography, consumers have not given researchers explicit permission to study them online. What do individuals think about this?” Good question.

Toplansky outlines the three “seminal” methodologies that he sees driving a “new era” of market research. I’m glad he uses this “era” terminology.

In my thinking on the futures (thanks to Peter Bishop at the University of Houston) of market research I have segmented market research into historical and evolving eras and epochs. The “Data Collection Epoch” which we are now exiting, began with face-to-face interviewing, advanced to telephone and then advanced again to online. I have also named this epoch the “Asking Epoch” because it was defined by the utilization of the structured survey instrument. But, there are now two epochs on the market research horizon. The first is what I call the “Listening Epoch” and the next I have termed the “Simulation Epoch.” The “Listening Epoch” is defined by observational analytics, a movement away from the survey instrument as the primary research vehicle and a significant shift to social media analytics and other observational technologies (such as fMRI, eye tracking ,etc.). The “Simulation Epoch” is defined by anticipatory research. It is this market research epoch that I am most excited about. I see the “Simulation Epoch” as one defined by mass simulation gaming, predictions markets like those designed by Inkling, MROC Delphi panels and strategic foresight. In fact, when market research enters this era, I believe that the survey instrument will be replaced by the online game and that market research game designers will replace today’s survey writers. This may sound a bit strange, but consider that this would mesh with the gaming behaviors of younger people today and would be more observational and less intrusive. One company that may epitomize this new Simulation Epoch is Simulex.

In essence, the “Asking Epoch” was about the survey instrument. The “Listening Epoch” is about real-time observation, and the “Simulation Epoch” is about modeling future behavior. One could argue that this progression takes us from a focus on the past (reported behavior in surveys) to the present (observed behavior and social media sentiment in real-time) and on to the future (gaming, prediction markets and scenario building).

Finally, Toplanksy discusses marketing eras. His thinking very much tracks with that of noted futurist Jim Dator and author Virginia Postrel. I think his taxonomy (industrial to information to relationship) is excellent, although I would not name the current marketing era the “relationship era.” Instead, I would christen it the “design”, “dream” or “experience” era. Market research, neuromarketing, fMRI and behavioral economics are significantly chipping away at the notion of the “rational man” and instead revealing the power of the creative and emotional elements of the human psyche. Toplansky gets at this in his piece in a shorthand way.

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.

Is the term advantageous for the industry?

I have written about this before as what I describe as the “linguistic” challenge to the industry.

This is why it was so good to read Andrew Jeavons’ piece in the February edition of Research World (page 11). Jeavons is NOT arguing that the market research industry is dead or dying, but he is arguing that the term feels a bit like antiquated terms such as “VHS”, “fountain pen”, etc. He argues that we think more about owning the term “customer” (the people we generally study) and focus less on the “market” or the process by which we gather the date. I think he is completely right.

Many in the industry have already shifted toward the term “insight”, “insights” or “customer insights”. As I’ve written previously, I’m not sure that’s the best language. I think we can do better, but I think the associations need to take a leadership role in rebranding “market research”, and I think a name change is in order. As a researcher working in Washington, we test new language constantly, and more often than not counsel significant changes in our clients’ lexicon. I’m certainly not alone in doing this. It’s time we take our own advice.

As I have noted before, I believe that the term “market research” has been incredibly detrimental to the industry, because it focuses on the data collection process and NOT the value of data-driven strategy. This is a significant error. The term “market research” has minimized the industry’s influence within the corporate decision making structure by reinforcing the idea that the industry is all about the process and data dumps and not about the strategy that flows from the data. In my view it has put the industry into a cul-de-sac. Moreover, focusing on the physical act of the “research”, but not the value that is delivered, puts the industry into a commoditized data collection box. When the industry’s core strength is data collection in a world where data has become plentiful, then we have positioned ourselves poorly.

This gets at a much wider point. When I started in “market research” and polling, data was scarce, difficult to obtain, and difficult to analyze in anything remotely approaching a fast manner. This is manifestly NOT the case today. In the past, when data was scarce, mastering the process of data collection and being the expert in data collection methods was a wonderful niche. But, data is now abundant. It is so abundant that most of our clients feel that they are awash in it. The Economist ran as its cover story recently the title “The data deluge.”

But, what should we call ourselves?

This is a difficult question.

The “market research” industry is at a significant crossroads. There are so many new entrants (listening experts, management consultants, etc.) that I’m not sure many of the new players would consider themselves to be involved in “market research.” This is a telling sign. If the future of the industry isn’t likely to think of itself as part of the industry, then we’re seeing a quantum shift. This is why I think we’re likely to see a larger number of people analyzing customer centric data in order to build strategies that advantage their firms or clients, but these people may not think of themselves as “market researchers.”

So, again, what do we call ourselves?

“Insight” or “insights” is workable, but omits what will be done with this insight, is silent on strategic implications and does not place the focus on the future. Perhaps we should modify “insight” by adding “strategic”.

“Fact-Based Consulting/Strategy” is better, but feels a bit cheeky, since it implies strongly that everyone else is just going on gut (which they are). Still, I view this as a strong option and it is the positioning GfK is going for.

“Data-Driven Strategy” is one of my favorites, and feels stronger and more active than “fact based consulting.”

Another option is “Strategic Foresight”. Of course, this technically means something historically different from market research. But, if I’m correct, what we call “market research” today will over time merge with what we think of today as “strategic foresight.”

Of course, any real rebranding effort would utilize research among our buyers in the c-suite.

But, I’m interested in your thoughts.

What should we call ourselves?

Ideally, it should be read in tandem with his January Quirk’s piece titled “Ten keys to increasing the impact of research” and with his comments on this website.

Although I highly recommend that you read (and re-read) Ian’s piece in Research World and draw your own conclusions, there are several things that I think are worth amplifying.

1. His concept of a “management contract” for MR is new to me and seems challenging, but novel.
2. Ian’s emphasis on “future-focused knowledge” that is “above the brand” makes two points simultaneously. First, that MR needs to inhabit a more strategic space with fewer “validation” surveys and second, that MR will naturally over time begin to blend with strategic foresight.
3. His thinking around future leadership in MR is dead on. Until recently mastery of MR meant mastery of a process that yielded reltaively scarce data. Data is now abundant. The process is being automated and simplified. Creativity is the scarce item, not data.
4. His listing of mindsets and skills is useful for anyone in MR tasked with hiring and managing. It’s an excellent shortlist.

“High Impact Research” is an exellent piece, and I highly recommend it.

I’m inclined to believe that major innovation will not come from the large players and will come mostly from outside what we think of today as “the market research industry.”

As Jack Honomichl noted in his 2008 report on the industry:

“Of special note regarding list turnover is the growth of startups, many in recent years rooted in online data collection. They demonstrate how the US research industry revitalizes itself via innovation…Then when a newer firm grows to an appetizing size, it usually goes public or is acquired by a larger, well-established research conglomerate. So the industry evolves, picks up energy and adapts to technological changes.”

This suggests to me that the larger players will struggle to innovate, holding on to their size through their control of large, institutional tracking programs and strategic purchases. In his 2009 report, Honomichl referred to this as “their long-time strategy of buying revenue growth, even in a slumping market.”

But why is this the case?

Perhaps the best answer I have found is in Richard Watson’s intriguing book, “Future Files.” In this book Watson states that:

“According to McKinsey only 0.5% of all companies perform well over several decades, so there is every reason to believe that the majority of companies around today won’t exist in the future. The primary reason seems to be the need for them to perform two seemingly contradictory tasks to survive. First, they must execute flawlessly in the present. This requires strict control and tight hierarchies that reward individuals with extensive skills and experience. However, this experience and expertise can create barriers that prevent an organization from adapting to changed circumstances in the future. Organizations are disabled by their own experience and success. In addition, senior executives develop mental models about what is and what works based on historical experience. Moreover, successful organizations tend to evolve into large networks that become gridlocked; innovation and change are resisted because they inevitably have a negative effect on someone, somewhere. This in-built corporate immune system partly explains why most radical innovations don’t come from industry incumbents…”

This seems to describe the industry fairly well.

But where is all this innovation going to come from?

The ready answer seems to be that much of it will come from outside the traditional industry leaders. For a more granular look, see my interview with Simon Chadwick.

There was such a great response to his question (Are the kids alright?) that he revised and extended his remarks.

It is worth reading the comments.

I maintain that there is plenty of young talent in the industry, but that these talented folks in their 20s are in fields that are not (and may never be) associated with “market research”, even though these fields may ultimately replace what we call “market research” today. The next generation of market research may never think of themselves as “market researchers.”

This leads me to a much wider point.

If the industry were my client, I would advocate that they rename and rebrand. For a LOT more detail on this, see pages 7 and 8 of my white paper on the future of market research.

For those interested in prediction markets I strongly recommend David Rothschild’s article in this month’s Public Opinion Quarterly (AAPOR’s publication).

Although Rothschild’s article focuses on “comparing prediction markets, polls and their biases”, the implications of his article stretch well beyond the political world. In fact, from one vantage point, elections are just a useful space to study these markets since they happen at frequent and predictable intervals. But any future event with these similar parameters would do.

One critique of market research is that it is a snapshot of the present and is rooted in present attitudes and behaviors.

This is why I believe strategic foresight and market research will merge (or at least cross-pollinate) in the near future.

Prediction markets are just one example of an area in which this cross-pollination will occur.

BrainJuicer already appears to be experimenting with prediction markets.

That wouldn’t be my first word choice, but to get a sense of what leaders in the industry are thinking, you can check out their one word descriptors here.

You can also read Jeffrey Henning’s take at vovici here.

A quick summary:

transformational, rewind, qualitative, probability, listening, fulcrum, ethnographical, essential, consolidation

It is worth a read.

Macfarlane (Gfk), Poynter (Future Place) and Schillewaert (Insites Consulting) make the most interesting points in my opinion.

My word would be “REDEFINED”. The industry is not going through a gradual evolutionary shift, but something more akin to punctuated equilibrium. The tools, players, and industry definitions are all likely to change so much in the next five years that much of the industry will go by different names and be unrecognizable.

Upon further reflection, I might use the word “SCHUMPETER”, after the “Austrian School” economist that popularized the term “creative destruction” (to describe capitalism’s dynamism).