RIP: MARKET RESEARCH

Do you know anyone who still uses the newspaper to find a job?

I highly doubt it. Just as online job seeking (think Seek and LinkedIn) killed off traditional newspaper job ads, market research could suffer the same fate to Big Data.

So what is Big Data?

The Association for Data-driven Marketing and Advertising (ADMA, 2013) provide a marketing definition – “the collection, analysis and generation of insights from a wide variety of data sources in order to be able to improve business performance.”

Why the Big Hype?

In the past marketers lacked data to make marketing decisions so market research was required to fill the knowledge gap. Today we have an abundance of data from a range of sources to provide information on just about everything (and probably more). Consider this:

– Every 60 seconds –

98,000+ tweets

695,000 status updates

11 million instant messages

698,445 Google searches

168 million+ emails sent

1,820TB of data created

217 new mobile web users

Source: ADMA, 2013

How could a market research survey ever provide as many marketing insights as the amount of intelligence available in these Big Data sources?

Marketing decisions, like most business decisions, should be based on facts. I question if traditional market research techniques can reliably obtain these facts when you compare to the potential of Big Data which can offer marketers a complete view of the customer.

 

 

 

big data

Source: Salkowitz, 2014

Does Big Data analysis provide better marketing intelligence than traditional market research techniques?

Let’s take a look at a few.

1. Cluster analysis for segmentation – Big Data provides a greater quantity of data to identify segments for targeting than traditional market research surveys. The other advantage of Big Data over traditional market research techniques is the number of sources of data that can be integrated in order to identify clusters.

2. Focus groups for concept testing – Big Data can draw on a range of data sources to predict customer preferences for new products removing the need for numerous time consuming focus groups. Take Netflix as an example. Within 10 years Netflix went from a video rental company providing a mail-order DVD service to an original programming service providing on demand movies and TV shows to over 44 million paying customers. How did they do this? Netflix used their viewer records, ratings and comments to create an algorithm to predict what their customers would want to view next (Entrepreneurial Insights, 2014).

 How many focus groups would have been needed to obtain the same level of customer insights?

3. Surveys for assessing customer satisfaction –what good are these after the fact survey results if customers have already taken to social media to complain about a product or service? Big data allows for real-time tracking of customer feedback enabling the company to respond when it matters most to protect their brand and reputation. Consider this case study. Banco Bilbao Vizcaya Argentaria (BBVA), a global group that offers individuals and corporate customers a range of financial and non-financial products and services, was interested in knowing what existing customer think about it through social media. The bank implemented an automated solution to monitor and measure the impact of brand perception online.

“What is great about this solution is that it helps us to focus our actions on the most important topics of online discussions and immediately plan the correct and most suitable response.”  – Online Communication Department, BBVA (IBM, 2014)

♦ Would a traditional customer satisfaction survey be as effective in understanding customer views as real-time feedback obtained through Big Data?

 

But is Big Data too hard?

Detractors will suggest big data is complex and too time consuming given the substantial volume of data that needs to be sifted through. Of course it’s not easy – if it was everyone would be doing it. But the data is not going anywhere. Companies who invest their time, energy and money into Big Data will certainly have a competitive advantage into the future.

In a July 2013 report, McKinsey Global Institute estimated that the application of Big Data practices could generate upward of $30 billion in additional revenue in the retail sector alone through productivity gains, improved transparency, and more sophisticated targeting of marketing, ads, and offers (McKinsey Global Institute, 2013).

♦ What company can afford to ignore this potential?

What do you think?

⇒Is Big Data a game changer for market research?

⇒Is traditional market research is dead?

 

References

Association for Data-driven Marketing and Advertising, 2013, Best Practice Guideline: Big Data, Sydney, Australia.

Entrepreneurial Insights, 2014, Big Data, Marketing, Best Uses of Big Data in Marketing, retrieved from http://www.entrepreneurial-insights.com/best-uses-big-data-marketing/

IBM, 2014, BBVA seamlessly monitors and improves its online reputation, Madrid, Spain.

McKinsey Global Institute, 2013, Game changers: Five opportunities for US growth and renewal, retrieved from http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights/Growth/US%20game%20 changers/MGI_Game_changers_US_growth_and_renewal_Full _report.ashx

Salkowitz, R, 2014, From Big Data to Smart Data: Using data to drive personalized brand experiences.

 

 

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25 thoughts on “RIP: MARKET RESEARCH

  1. Really interesting article, well done.

    I suppose if companies knew how to access, analyse and use big data – then it is highly likely that these traditional forms of market research will become obsolete. However,like the article in this week’s reading suggests, not many companies are truly at this level yet.

    Do you think this big data would help a company breakdown and understand sales trends? If a product suddenly stopped doing well, would big data help or would they still need to undertake traditional market research to understand these issues?

    I think it’s likely that eventually big data will the key – but i don’t think we are quite there yet

    Liked by 1 person

    • Thanks for your response. You raise a great example of where data may not have the insights should a product suddenly stop doing well. I wonder if you looked at other trends across different data sets the reason may become clear. For example, the sales of new Western Star trucks drop in September. Would a market research survey of customers help understand this? Or would you look at data such as:
      – The Australian dollar changes: the trucks are imported and a change in the dollar impacts on the price for Australian consumers. Maybe a significant dip in the dollar has scared away customers.
      – Political environment: perhaps there is an election coming up and historically a change in government leads to regulatory changes in the industry.
      – End of financial year purchases: potentially consumers made their large purchases at the end of the last financial year for taxation purposes so historically this is a quiet time of year.
      – Interest rates: perhaps interest rates are particularly high leading to decreased sales.
      – Diesel prices: diesel may be expensive and this correlates with purchasing decisions.
      – Number of product faults: maybe there has been a significant number of product faults over the past few months, leading to reputational damage and less sales.
      – Number of customer complaints: there have been a large number of customer complaints over the past 12 months which impacts purchase decision making.

      As shown in the rebuttal blog by Dan Clair, correlations can be found between irrelevant factors when the data sources are large enough. Therefore market researchers may still be needed to interpret the data from a human perspective but their job descriptions may look a little different (ie. less surveys and focus groups) in the future when we are more advanced in the use of big data.

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  2. You do have a point when it comes to Big data, but the question arises, can every company afford that. As you said, if things were as simple as just said, every company in this world would have made profits and gains with all the data available. Does it sound idealistic?Yes, it does. Market Research have always been helping many industries to flourish and upward its revenue with mere analysis and understanding the needs of a customer, if that has worked in the so called archaic age, why would it stop in the future. Larger Organizations may have resorted to Big data, but if you ask about the extinction of Traditional techniques of market research, i would prefer to say no. It still reigns in several aspects and always will, until and unless Big Data is simplified so enough to barge in.

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    • Thanks for your sharing your thoughts. I agree the potential for every organisation to use big data does seem like a long shot at this point in time. You have mentioned the costs of doing so. In addition there is the capability to interpret and use the data.

      It seems there is still some way to go before big data is more user friendly and cost effective for all organisations to access and put into practice.

      But do you think organisations should start making a move in this direction if they want to capitalise on the potential of big data? Even if market research lives another day, it will need to integrate the findings with data analysis suggesting the data cannot be ignored forever.

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      • Thanks for agreeing to my point. I might want to say that people driving in those directions of Big Data do have the advantage of having a large set of information with them understanding various customer needs,but the question arises at the same point whether such small companies do need them. Can they completely rely on big data information set decisions. When talking about any part of marketing, we have to compare both the ends, for big companies as well as small. A future is what Big Data can have, and i see a bright future, only if the budding analysts have that expertise. Right now, the comparitives used and initiation done to capitalising or making profits is far more amateur with big data. Traditional market research can very well reach the consumer in every aspect and can support every decision with an explanation.

        Liked by 1 person

  3. Great post- well done.

    There is no doubt in my mind that big data is a game changer. When thinking about the data gained vs expense and effort costs for different research methods it is no contest. You raise the point about it being too hard to analyze the data, I would suggest that even for primitive systems the effort is lower than analyzing traditional research which takes many man hours.

    In regards to your second question about the death of traditional market research, my view is that it is truly only a matter of time. The digital age is in full swing now and we only have a few short decades until the oldest generations die out and all people alive have been exposed to digital media (and have used it) from a young age. I really believe that one day we will wake up and find that traditional market research is completely ineffective.

    With this in mind I would say that for companies that haven’t yet, the investment must start now! All efforts should be focused on gathering and using Big Data for market research or else be left unable to effectively compete with the data being gathered.

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    • Thanks Dan. Great point – either method requires interpretation which takes time and resources. Whilst organisations sit around making excuses on why not to introduce big data, their competitors are out their uncovering new information to inform their decision making. Time will only tell if these decisions are better informed than those made with traditional market research insights. Have you come across any good examples of positive results from big data analysis and subsequent marketing decisions?

      It will be interesting to see the generational switch in years to come. The game of marketing is changing with the digital age. I wonder how long it is before market research techniques evolve in line with this new era.

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  4. Thanks for the blog and well done. The potential of real time data versus focus groups and other traditional market research techniques seems quite compelling. It would be interesting if there was any data or research undertake to compare real time feedback for responses that are not ‘in the moment’. I can see the ‘gut’ or instinctual feedback that can be collected through big data techniques as being useful but would this apply to all consumer behavior or all stages of the purchase process? I don’t have an answer but it would be interesting. Psychology and neuroscience tell us that these two types of responses come from different parts of the brain I wonder this means for the analysis of or conclusions drawn from Big Data Analysis.

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    • Thanks for sharing your thoughts. You make a great point about the differences of real time feedback from the big data as opposed to people providing feedback after the fact. I am not convinced the feedback after the purchase would completely represent actual behaviour/decisions.
      For example, I have recently started using online grocery shopping. I find the quality of fruit and vegetables relatively poor. On each survey they send me after the delivery I comment on the poor quality. However I continue to buy fruit and vegetables using this method even though I am gambling with the quality. It all comes down to convenience and time constraints. Therefore my qualitative feedback does not correlate with my actual purchasing behaviour. I would suggest my purchasing behaviour would be more useful to the marketers than my survey feedback.

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  5. sorry about the earlier post. by mistake i pressed enter and now i cant delete it.
    anyway,
    I think you have picked a nice topic for the discussion.
    I think big data is very important and will be getting more important for the large organisations in future. And this will be game changer. now a days if someone has a good online presence, you can get a lot of information about that person, their likings, disliking, habits, places the have been to, things they do and much more. and large organizations can use this information for market their products, introduce new products according to new trends by analysing new information about people/customers coming everyday.
    But traditional methods of market research is as much important. e.g multiple choice type research. In such type of researches, users might give private information willingly(if research needed) without disclosing their identity (i.e. not giving out their names, address, phone number etc.) which they do not or cannot put out on internet.

    so what i think is even though big data is getting lot important, traditional methods have their advantages as well and they definitely will stick around.

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    • Thanks for your response. There is so much to be learnt from big data given the switch to online activities. The larger organisations have more money and capability to explore the possibilities of big data – but where will this leave the smaller organisations in the future if they are unable to make the most of this new information?
      I also think the traditional methods will have some place in the future but it is how they integrate with the new possibilities of big data that will ensure they stay relevant.

      Like

      • i like the point you made in at the end of the comment about how the companies will integrate traditional methods with new methods. This will make a lot of difference and it would be interesting to see how they actually do it.

        Liked by 1 person

  6. The write up about market research is a perfect explanation and good effort.

    Yes big data will be a game changer and also can be threat for small businesses who are trying to use these data to reach more people by using this data to form strategies as data are easily manipulated here ..

    And traditional research will change and it may incorporate Big date with it..Everything depends on for what research must be Carried out ..

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    • Thanks for your reply to my blog. You make an excellent point – it all depends on the what as to which method will be most useful. Its about using the right tool for the job. From what I have read on the topic I am not sure the market research community has worked out which methodologies are best depending on what you want to understand.

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  7. Very interesting post.

    Yes big data is a game changer for market research as the more data you have the better you know and understand your customers.

    Do I think traditional market research is dead – no I don’t. I believe traditional market research methods will still have a role to play as big data gives you the how/what whereas traditional market research gives you the why.

    Check out this interesting TED talk on big data and its potential. The talk goes well beyond big data and marketing but well worth a watch if you have 15mins to spare –

    Like

    • Thanks for sharing your thoughts and the great video (I thought apple pie was everyone’s favourite pie hands down!).

      I agree with your point that big data gives you the how/what and traditional market research gives you the why. But I wonder if this will remain in the future? As we gather data on data on data – will we know the why from past market research results? Or will we be able to create algorithms so sophisticated that we can make 100% accurate predictions that we do not need to know the why?

      The video was thought provoking. It highlighted how far we have come with data over time and one can only imagine where we will be in 10, 20, 100 years time.

      There are some good watch outs in the video. I particularly liked the point that we need to become the master of big data and not a servant.

      Like

  8. I enjoyed this post and I think you are quite correct. There is certainly a dividing factor here in terms of traditional research processes and relying on information via big data but also the catch 20 is having the means and capability to harness the nuggets. I think this is also where analytics falls into place. There is already many new industries and jobs being advertised for specific skills around this. (Analytics Analyst Jobs). Refer to this role advertised by Virgin Money for example.
    https://www.linkedin.com/jobs2/view/44933935?trk=jserp_job_details_text

    In terms of smaller businesses, I think they too can jump in on the momentum of big data but may need to outsource this activity to another organisation, who have this capability. It may actually be a better outcome anyway, given that much is riding on a quick turn to market and decision to be made.

    Liked by 1 person

    • Thanks Raymond for sharing your thoughts. It is really interesting to see new roles emerging for this field. I wonder how long before there is a degree specific to this field? An opportunity perhaps for universities?

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  9. Thanks for a thought provoking article. I do tend to agree with the majority of comments that big data is likely to be a game changer – I think more so for those larger companies and perhaps the more global companies. I was wondering on the way through reading your article and following comments whether big data would be the right source of information if you were pitching your product at more of a niche market – would the big data be sensitive enough to position the product well enough so that the product launch would result in desired sales? Even so – the big data would at least provide some insights into likely market trends which I expect would help reduce the risk of introducing new products.

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    • Thanks Lynette. You raise an interesting point about niche markets and how well big data would provide insights. It is something we will explore in our reflective essay. Have you thought of any specific examples of a niche market where big data may not prove useful?

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  10. An extremely thought provoking blog. In my opinion, although big data has it’s definite perks and advantages over traditional methods, your closing statement of the integration and use of both for market research is probably an accurate estimation of how traditional market research methods will transgress. To write it off this early in the piece is a little premature considering that big data may hold sample spaces to big for more niche markets and other issues. Another point to consider is that data mining has been around for eons with the likes of SAP, Oracle, IBM etc… and we’re still yet to see the demise of traditional data research pathways. Great article!

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    • Thanks for your reply. You raise a great point – data mining has been around a long time and it has not led to the extinction of traditional methods. So the assumption that more data will kill off these traditional data sources does sound unlikely. As others have pointed out, the right data source is best determined by what questions you are trying to answer.

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  11. Nice post.Thank you for sharing.

    I do not think the traditional market research will be dead in the future.

    I do agree that due to the development of innovation and speed of the technology big data creates useful information from massive collection which is very essential for company business analysis.The big data can integrate non-structured data collections from multiple sources, to combine analytics in new and innovative ways.Moreover,Big data concentrates on squeezing valid insight from massive collections.

    Traditional market research, in contrast, focuses more on data collection. Before data was so abundant, market researchers had to concentrate on data collection, or they might not have enough information to lead to valuable insights.

    Big data can do a lot, but it can’t solve fundamental business problems, and it doesn’t do away with legacy systems altogether, because these systems often inform researchers on the best ways to dig into big data. Big data also won’t fit in with some of the ROI metrics like speed of transactions.

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  12. I like the way Big Data is explained on this blog. Nevertheless, it seems like, from the writers point of view BD is taking over Marketing Research and I don´t agree with that. Marketing Research has been used for many years as a good way to predict consumer´s first reaction and possible behaviour about a particular product before it is been launched to the market. It is no complete accurate, but it works. Today in a digital field with all the information been captured about customers, organisations can use tools as Big Data, (well described on this blog) to understand and predict consumers behaviour. Also to refine market research first findings. Therefore, from my perspective Big Data and market research are no mutual exclusive. Instead of this, they are complementary tools that can move enterprises closer to a stage of better prediction on how consumers behave. This mix, supported by historical data and real people interaction is a powerful tool to lower risk in a new product introduction. Big Data is not the enemy of Market Research, or the other way. Contrary to this, they are complementary. Surveys are no 100% reliable and so it is Big Data, but mixed can be a powerful set to predict products performance.

    I recommend this short video about it.

    [embed]https://www.youtube.com/watch?v=H-FsyW3l9Kg[/embed]

    Regards,

    Like

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