At the ESOMAR Asia Pacific conference in Macao this week, Ray Poynter shared ten conclusions from two ESOMAR reports, Global Market Research 2018 and Global Prices Study 2018. Both reports are free to ESOMAR members. He also debunked four common myths. The facts:
- The research industry is growing and changing. Traditional qual and quant work is barely keeping pace with inflation, growing from $38 billion in 2013 to $42 billion in 2017 (U.S. dollars, nominal; i.e., not adjusted for inflation). However, newer research methods – social media, web analytics, software, other – has grown from $24 billion in 2013 (39% of the total) to $35 billion in 2017 (46% of the total). “Financial data is always one year out of date,” Ray reminded the audience, “and maybe this year 50% of the industry is new research.” Yet the idea that “analytics is the only way forward” is a myth, with the role of qual and quant persisting.
- MR remains highly centralized, with 81% of the global spend in North America (44%) and Europe (37%), ahead of Asia Pacific (13%), Latin America (4%), Africa (1%), and the Middle East (1%). “So many successful MR startups happen in the US, because it is a bigger, simpler market: one language in one country.” In contrast, an APAC study might span 7 countries and 12 languages. To the audience’s surprise (based on a show of hands), APAC has declined as a share of the global marketing, dropping from 16% in 2013, “mostly because of not moving fast enough with the new technologies.”
- Ten companies at the heart of MR account for 50% of total MR revenue: Nielsen, IQVIA, Kantar, Gartner, Ipsos, GfK, IRI, Westat, Dunnhumby, and INTAGE. But the landscape – “long relatively static in terms of structure” – is changing, with Nielsen and Kantar up for sale and GfK having sold parts of its business.
- The three key verticals are CPG/FMCG (19%), media and entertainment (16%), and pharmaceutical (16%). The types of projects globally are comprised of 20% market measurement, 12% U&A (Usage & Attitude) studies, 11% media audience, 8% CRM/CSAT (Customer Relationship Management / Customer Satisfaction), 7% UX (User Experience), 7% NPD (New Product Development), 6% polling, 6% omnibus, 6% ad tracking, 3% market modeling, 2% mystery shopping, and 2% ESAT (Employee Satisfaction).
- F2F surveys still dominate many markets, even though data collection for such studies has moved to interviewer-wielded tablets and smartphones: 92% of surveys in Pakistan are face-to-face, 86% in Kenya, 79% in Sri Lanka, and 78% in Indonesia and Vietnam. On the other end of the spectrum, 87% of surveys in Australia are online, 77% in Bulgaria, 73% in the UK, 72% in New Zealand, and 71% in the Netherlands. “You can get away with an online study in India, for example, if the study is of BMWs or iPhones – but not if it is of shampoo.” The idea that F2F is dead is a myth: “it is necessary in many parts of the world, and ethnography and F2F qualitative research are growing.”
- Focus group, F2F, and CATI prices are stabilizing. The Global Prices Study collected 636 responses from 116 countries, representing one third of the MR industry by value. Participants provided bids for 7 projects in 3 modes (quant, qual, and new techniques). Focus groups have averaged between $10,000 and $12,000 over the past 5 years globally. In the key markets of the USA, UK, Germany, France, and Japan, focus-group prices have averaged $22,000 to $27,000.
- Prices for online research are falling. The global median for a 15 minute online survey of 500 respondents is $8,000 (simple U&A, no analysis, no presentation); in key markets, it is $9,000. In key markets, this has dropped from $27,000 in 2013. “A single global market for commoditized online quant research has emerged, at prices that exclude human value-added.”
- Despite an emerging global market for online research, countries differ dramatically for other types of research. The most expensive country, Switzerland, is six times as expensive as the least expensive country, Egypt. (But in 2016, the ratio was 10:1 from most to least expensive.)
- The rising demand for data/marketing scientists has led to high billable rates. Rates for data scientists often are more than that of a research agency’s CEO, and competition is intense, as data scientists often switch industries. Global median daily charge rates vary by title: $400, junior analyst, $800 in KM (key markets); $500, mid-level, $1,000 in KM; $900, senior staff, $1,500 in KM; $1,100, marketing scientist; $1,600 in KM.
- Free social-media data does not always equal inexpensive research. The idea that “All research can now be done on social media without a cent being spent on sampling/representation” is another myth these studies debunk. The global average for a project providing social media data to specific parameters is in fact $10,000; $15,000 with a presentation; and $21,000 (and a two-month cycle) with a marketing scientist. Contrast that with a simple U&A: $8,000 globally, $9,000 in key markets. “It turns out that a survey is faster and cheaper than social-media research. We have a commoditized survey research industry but not a commoditized social-media research industry.”
The final myth that Ray debunked is that “robots and automation can do everything”: they should do everything they can (and clearly are in the commoditized world of survey data without human analysis), but in a world of data abundance, the need remains for researchers to make sense of it all.