The document discusses the changing landscape of the market research industry. It notes that new technologies have accelerated changes and blurred boundaries between traditional survey-based research and newer approaches using social media and online data. A client survey found that while market research agencies are meeting client needs now, pressures around cost, timelines and need for innovation could impact the industry's future shape and definition unless it adapts. The history of the Australian market research industry also shows it has evolved before through periods of technological change.
17. Counteracting emerging threats to the continued relevance of core products and servicesHowever, 7 years on, we have also seen some new issues and ‘cost’ has become a central concern with the intervening global economic crisis not yet forgotten. While Roth’s interviews with senior management revealed that ‘identifying new communications opportunities outside traditional channels’ and ‘understanding the.... brand disloyal youth segment’ were key issues in 2004, our respondents are now rating understanding and connecting with their customers as the number 1 business challenge today, and are actively looking to harness the relatively new phenomena of social media as a tool to help provide better value information or insights.<br />Thinking about the traditional role of the Market Research industry, it is perhaps comforting to see that businesses continue to rate the need for consumer understanding/customer insight so highly, given this underpins the ‘raison d’être’ of market and consumer research. And it does go some way to reassuring us that market research is still a relevant industry and has a current role to play – not only therefore in delivering consumer insight but in relation to helping businesses with innovation, competitive differentiation and margin erosion – all key challenges. <br />The fact that we are able to help clients meet their key challenges would likely have assured our future historically, but in 2011, Market Research is no longer the sole vehicle for delivering consumer understanding. With new competitors on the block, we believe that the industry cannot afford to be tackling this challenge for clients simply through our established research practices and methodologies. We need to be ready to adapt and embrace alternative approaches for gleaning consumer understanding and providing clients with commercially-relevant insights that help them innovate ‘better, faster and cheaper’.<br />Looking forward, there may also be opportunities for Market Research to work with clients to tackle the currently less important, but likely emerging challenges, such as leveraging existing information in better way or making sense of what consumers are saying in real-time. These are areas in which the Market Research industry ought to have a role to play, but perhaps is not currently responding to fast enough.<br />“... we need research that is as dynamic as our business, which is where the gap is at the moment. The traditional research has not moved to be as dynamic as the business”. FMCG IDI<br />5.3.3Which information providers are being used to help with important decision-making in innovation and marketing, and what factors are driving their selection?<br />The next section of our Quantitative survey looked to identify which information providers are being used most often to help businesses with these challenges, and why.<br />Overall, our research indicates that buyers are using various information providers and consulting agencies for different reasons, each appearing to have different strengths and weaknesses. <br />The apparently good news for the Market Research industry is that we are already not a single entity but a “broad church”, with small, medium and large-sized businesses offering different strengths and benefits and being valued for our different areas of expertise. <br />Comments from our qualitative interviews also go some way to confirming this:<br />“For the research industry, I think it does suit our needs, there are different agencies out there for different purposes” – FMCG IDI<br />Cost vs. Specialism<br />While we saw that costs and budgets are clearly top of mind for our audience, ‘cost-effectiveness’ in itself does not appear to be the key/strongest motivation for choosing one provider over another, although it ranks highly for Sales & Trend Specialists and New Media/Software companies equally.<br />There appears to be both good and bad news attached to this finding. The good news is that, while businesses are suffering cost-pressures, Market Research and other information providers are being used and are not being judged purely on cost –.<br />“We don’t go for the cheapest either, it’s the individuals...” – FMCG IDI<br />The bad news for traditional Market Research agencies is firstly that New Media companies and Sales/Trend Specialists are being selected for being ‘cost-effective/providing great value’ more so, creating a potential future threat.<br />The potential risks of the new data abundance is that data or information do become de-valued because the information is virtually free and widely available (such as we are now seeing happen with traditional newspapers and availability of online news content), which prompts research buyers to expect lower costs from research or information providers. <br />“On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other” <br />This phrase was first captured in 1984 and describes the tension that is still playing out in the digital age. Information that used to be expensive because it was hard to get is getting easier and easier to access. Two years later Stewart Brand also added these comments to the phrase:<br />“If you cling blindly to the expensive part of the paradox, you miss all the action going on in the free part”<br />This is central to what the Market Research industry needs to address now.<br />One way to counteract this might be to shift the focus from data/information to commercially relevant insight, or even foresight and strategising, as have been suggested by industry observers and bloggers such as Lenny Murphy.<br />Table SEQ Figure ARABIC 3: Main reasons choose to work with one information provider over another (base n=184)<br />Figure 2: Main reasons choose to work with one information provider over another<br />Market Research vs. Other Information Providers/Consulting offers<br />Part of our aim in this research was to understand how the core Market Research industry shapes up against other information providers/consulting agencies. Where are we performing well and what might the threats or opportunities be for us? Several industry commentators and clients have stated Market Research needs to be more like Consultants, but what does this mean?<br />Looking at each of the provider types (Table 3 and Figure 2), we can see that while Management Consultants offer a number of strengths, they appear to be primarily chosen over other information providers/consulting agencies based on their ‘business acumen’, their knowledge and ability to understand the broader commercial objectives, and ability to challenge buyers/clients’ thinking. <br />Advertising agencies, on the other hand, are less likely to be used for their commercial know-how, and more for their specialism, ability to provide tailored solutions and their objectivity.<br />Sales & Trend Specialists are valued for providing objective, cost-effective information and insights (interpretation, understanding – not just data) as well as benefitting from being specialists in their area, but are not seen as being strongly proactive, challenging buyers’ thinking or helping to provide clear prioritisation of buyers’ business issues.<br />New Media agencies, such as online community panel providers, are seen to be providing great value for money as well as being technology/approach specialists, but are less likely to be used in the capacity of management consultants providing commercial expertise/business acumen.<br />We included three types of ‘traditional’ Market Research agencies in our survey, with the expectation that responses would differ for each – and that Market Research is not a single entity. While these three types may not truly represent the differentiation in the market, we felt it was more important to understand how Market Research businesses compare with other similar information providers/consultancies, not just amongst our most immediate competitors. We also had to be mindful of the number of agency types we could cover in the survey.<br />As we suspected, the “traditional” Market Research industry is multi-dimensional, likely driven by its need to adapt historically, in step with technological and market changes and this appears to be to our advantage now. We can see from our research that Market Research agencies are being used for a variety of reasons, and appear to have a number of strengths, depending on their size and nature. The larger, full-service Market Research agencies offering benefits stemming from their size, breadth and global presence, such as their ability to leverage learnings or provide consistency across markets, and also in terms of their ability to specialise in multiple areas (both across categories/industry sectors and techniques/approaches) and invest in and make effective use of cutting-edge technologies/sophisticated tools.<br />Buyers are less likely to use smaller, more senior-led Market Research agencies if they want consistency with what they’ve done before and “traditional” and “proven” techniques, they are more likely to use them for their specialist knowledge and ability to tailor solutions.<br />In-between these, the medium-sized, local Market Research agency appears to be able to provide both tailored solutions, interpretation/insights, in-depth customer understanding (not just data) and specialist knowledge, as well as speed/efficiency and cost-effectiveness (over other information providers).<br />So, can we grin like Cheshire cats, give ourselves a big pat on the back and carry-on as we are? Or would this just be Market Research in Wonderland?<br />While our findings show that Market Research has a number of strengths, history, method and great diversity, there are nonetheless gaps meaning possible threats, or opportunities, depending on how you want to see them. We believe therefore that the industry will need to continue to adapt to external and internal challenges, and believe that the need for transformation may never have been greater than now. <br />Value Perceptions<br />As noted earlier, New Media companies are being used to provide great value/cost-effective solutions and more so than traditional Market Research companies. This could represent a threat, given the current climate and aforementioned financial business pressures, as well as a potential shift in clients’ mindset with less focus on quality and perception of value from research, as noted in the GRIT report.<br />Perhaps the most disconcerting is the erosion in self-perceived respect for research...with a 20 ppt jump in the percent who feel that research is less valued than 5 years ago.<br />Market Research may need to work harder to increase value perceptions in future (e.g. through dealing in knowledge and insights not data) or find alternative, more cost-effective solutions or approaches; the risk of not doing so could mean more companies using other, newer types of information providers or more DIY research, already common in some businesses:<br />“We do very little ad hoc Quant. Maybe because it’s more expensive and we rarely need it” – FMCG IDI<br />Commercial Focus<br />A further gap, and a potential opportunity to tap into, relates to commercial focus. Our clients are choosing to work with Management Consultants when they need business acumen (as well as specialist knowledge of their category/business) —along with “providing clarity and prioritisation of business issues” and being “proactive in offering advice/suggestions on business”. <br />This finding supports an industry need to include the broader business objectives in our work, have a commercial perspective and not just a project or process perspective, and we need to be more proactive in suggesting ‘solutions’ and ways to help them move their businesses forward, rather than sitting back waiting for clients to come to us with brief. <br />“I believe the market research industry needs to evolve from providing methodologies to providing holistic answers to business questions, how to get there, is of course the specialist area of agencies, but they also need to improve on business understanding” FMCG IDI<br />To quote from Diane Shelton, General Manager of Customer Knowledge and Insight at Coles, in response to a question in Research News February 2010 – If you could change one thing about the research industry, what would it be?<br /> “The overall lack of understanding of business and commercial realities”<br />Techniques, Techniques, Techniques<br />‘Use of traditional or proven techniques’ and ‘use of novel/innovative approaches that help provide competitive edge’ – both factors reference techniques or approaches, although may be perceived as opposites in terms of currency.<br />Interestingly, none of the three Market Research agency types represented here appear to be valued for either of these factors particularly highly. Media agencies were more likely to be chosen for innovative approaches, but using traditional techniques did not appear to be highly valued or a reason for choosing any agency type. This intuitively feels true – and we tend to believe that clients prefer new techniques and innovation to traditional ones, particularly given the current rapidly changing consumer and technological landscapes. <br />However, from our Qualitative research, we know that novel/innovative approaches or new techniques are only relevant if a) they help clients do things better, faster or cheaper, and thus help them achieve a competitive edge, for example, or b) meet the research or business objectives. At other times, it may be the traditional or proven technique that better meets the objectives or is more fit for purpose:<br />“In regards to new methodologies, I sometimes think that agencies propose new methodologies because they are new and not because they are actually right for the objective” – FMCG IDI<br />5.3.4How are these information providers performing on these factors (and overall)?<br />A word of caution. Our survey was structured to only include perceptions of agency performance amongst the more regular users of these agency/provider types (to help ensure results were relevant and representative of users, but also to reduce survey length). <br />The overall picture is generally very positive, but this may in part be due to the fact that buyers are simply working with suppliers that they are happy with (and not the ones they are less happy with) rather than representing a sweeping endorsement for each of these businesses from our audience. <br />The other possible conclusion is that there may be many times when agencies do not perform well, or there is a diversity of performance within each agency type. Certainly, when we look at the Overall Performance (this was measured amongst the total audience, with about ¼ saying ‘don’t know’ for each agency type,) we see a big difference in perceived performance (see Figure 5). <br />Overall ‘typical’ performance for each of these agency types appears spread and somewhat average on the whole, rather than ‘exceptional’. There is no one agency type that stands out as being exceptional or scoring significantly higher than all others in terms of being able to ‘help clients make successful commercial decisions in innovation and marketing’. On the other hand, we might also conclude that Market Research businesses are performing just as well, if not marginally better than other types of information providers/consultancies.<br />With this caveat in mind, we have looked at the overall performance of each agency type and performance against specific attributes, and have conducted Factor and Regression analyses to help determine which factors are driving industry perceptions of these agencies. (Note – analysis conducted excluding small research businesses). <br />Table 4: Overall Performance (amongst total sample): How do these agencies perform overall in helping you make successful commercial decisions in innovation and marketing?<br />Table 5: Perceived Performance across factors (amongst regular users of each agency type)<br />Overall, Market Research businesses are currently performing relatively well against other consulting agency/information providers, and across most of the areas measured, looking at small, medium and larger, global offerings, which provides further evidence that the industry is still relevant and in a good position to thrive to tell another tale or two.<br />However, looking at the performance of other businesses on specific factors, and taking into consideration the overall performance scores, there is also no room for complacency; a number of threats and opportunities are apparent.<br />Management Consultants provide business focused insight and value<br />While the overall top 2 box performance of Management Consultants is slightly lower than that of small and medium-sized Market Research businesses, contradicting to some degree our expectations, there are a number of areas in which they clearly perform very strongly, including ‘not being afraid to challenge you’ and ‘having knowledge of/being specialists in your category/business’, these are areas in which Market Research agencies are not performing as strongly.<br />Our (multivariate) analysis suggests that the value of using Management Consultants is driven primarily by their ability to create strong business relationships that allow them to be proactive in offering advice, challenging clients and offering tailored solutions, their objectivity and ability to focus on the business issues, as well as being able to leverage resources or learning from other markets and offer innovation/novel approaches. Their business acumen underpins all factors.<br />Secondly, they are specialists who deliver insight and understanding, and this is backed up with effective use of sophisticated techniques and efficient turn-around times.<br />Performance perceptions tend not to be driven by cost for management consultants, nor use of traditional techniques and consistency with what done in the past.<br />Figure 3: Performance Perception Drivers – Management Consultants<br />It is worth noting that the R2 is not very high, indicating, we believe, that there are likely many other factors that drive perceptions of Management Consultants (that were not included in our survey). However, it is clear based on the attributes and factors included that drivers are related to the core reasons why clients use this type of agency and are prepared to potentially pay more for their time – for their specialist expertise and business acumen. Their positioning allows them to create value for clients.<br />Keeping in mind the financial challenges and current climate, as well as perceptions of commoditisation and decreasing value from research, the industry may well find it needing to re-build value perceptions... and might take learnings from other consulting businesses such as Management Consultancies.<br />It is interesting to note that a similar conclusion or similar recommendations were made by senior managers interviewed in Roth’s 2004 paper on how to ensure research companies remain useful and relevant to business. It appears that these words of advice are still relevant today:<br />“Think business first, research second” <br />“Identify business opportunities yourself” <br />“Understand the clients’ business and build business partnerships”<br />“Clients like to be challenged – don’t take briefs on face value”<br />Noteworthy also, Roth also talked about reviewing cost structures in the industry given that “data collection is the most difficult feature to differentiate companies on because it is seen to be a ‘commodity”. While we agree with this in our research, data collection is not necessarily any longer the “item that costs clients the most”, and moving to a different costing structure may no longer be sufficient to increase value perceptions. Returning to the traditional news/press analogy, we believe people will be prepared to pay for commercially relevant knowledge and insights where they would not be prepared to pay for information without analysis and consideration.<br />The value of innovation<br />Roth’s respondents also talked about the need to “keep innovating”. Across the eight agency types we measured, it was the New Media companies that stood out as being perceived as performing most strongly on ‘effective use of cutting edge technologies/more sophisticated tools’ (although larger, global Market Research companies were not far behind), as well as for being ‘specialists in a specific technique or approach’ – these were their core strengths, based on the attributes that we included in our survey.<br />Of note here, when we look at performance perceptions in Australia compared to UK/US for New Media companies, we see a tendency for UK/US respondents to give higher ratings in most areas with the exception of New Media Companies. Perceptions are aligned when rating New Media Companies in Aust, UK and US. These agencies are rated as being specialists in a specific technique, having ability to leverage resources/earnings from other markets, ability to turn things around quickly, being cost effective/providing great value and their ability to create successful partnerships.<br />Where performance appears to be lower, it is the Australian respondents who have rated the New Media companies down, for example on: business acumen, ability to provide clarity and prioritisation of business issues and providing consistency, and there is also an apparently large discrepancy in perceptions of their ability to challenge you, provide in-depth consumer understanding and offering tailored solutions.<br />We could reach a number of conclusions here; one that New Media businesses locally are not performing as strongly on these aspects (commercial focus, insight, tailored solutions) compared to possibly more established overseas businesses, or that Australian businesses have higher expectations or that they are simply more critical of performance compared to our UK/US counterparts.<br />Nevertheless, the New Media companies are performing more strongly on the ‘effective use of cutting-edge technologies’ than any other agency type and are clearly specialists in their area, which is being valued by research buyers.<br />We believe there is evidence that we need to invest in and drive new techniques or technologies to help, for example, to cope with and harness the surge in available data and to remain competitive against the non-traditional Market Research companies that are springing up to deal with new data sources. We believe that the Market Research industry needs to remain flexible and adaptable, with the end game being use of new technologies to help achieve positive client outcomes (e.g. faster, better, cheaper) – not the tool as an end in itself. <br />“We need to craft methodologies that add direct bottom line impact by engaging consumers in an ongoing relationship with brands”<br />The risk of not doing so is to lose not only relevance and freshness, but to lose out to DIY research or other competition:<br />“We are also trialling new things ourselves in that area of research. Research companies are not up to date with those 2 challenges. I think FMCG companies are more up to date than research agencies” – FMCG IDI<br />What can Market Research learn from Media and Advertising Agencies? <br />Advertising agencies stand out for their use of traditional or proven techniques, but are not seen as cost-effective/providing great value (on par with Media agencies and global Market Research businesses). Overall performance is ‘average’ for Advertising agencies and lowest (top 2 box %) for Media agencies amongst the agency types we surveyed.<br />However, Media agencies perform very strongly (highest) on being ‘specialists in a specific technique or approach’ and also for ‘offering innovative approaches that help provide competitive edge’, but also ‘provide consistency’ with what was done before. Across the eight agency types measured, Media agencies scored lowest performance on ‘having knowledge of/being specialists in your category/business’ though.<br />Overall, perceptions of Media agency performance were similar across markets (and industry types), but there was a tendency for UK/US respondents to rate them higher across the board (all attributes), and this is also true for Advertising agencies (although overall opinion was also slightly higher in UK/US).<br />In our further analysis, we were not able to reliably identify performance drivers based on the attributes captured (R2 0.236 for Advertising, R2 0.169 for Media and not significant) suggesting that there are other reasons which come into play in determining why companies work with Media and Advertising agencies that were again not included in our survey (which was focused on Market Research industry performance). One such reason, as we came to understand in our Qualitative discussions with clients, was that Advertising agencies, for example, are often paid on a retainer basis rather than on an ad hoc basis, and therefore performance may not be measured on a project-by-project basis.<br />While one client did not think that research agencies would be able to work off this model, they did believe that this was something the industry could learn from in terms of the partnership created:<br />“I don’t think the model that we have with our ad agencies and media agencies is going to happen with research agencies... With the retainer there are no confidentiality issues that are something I think the research industry can learn from, because we don’t keep anything from them (the retained advertising agency). They are a true partner in the business, and while I don’t think we can ever get to that level, I think we can learn from it” – FMCG IDI<br />In conclusion, like the Management Consultants and with the added benefit of being experts in their area, Media and Advertising agencies may be building stronger relationships with clients as ‘true business partners’, which is, we believe, the direction the Market Research industry will need to take in order to make possible commercially relevant foresight and strategies, as reiterated in one of our In-depth Qualitative interviews:<br /> “We work with agencies where we have a conversation and we can collaborate together” ... “We work together to make sure we have the most actionable findings for our business ... our agencies need to understand our business” – FMCG IDI<br />“There are very few (Market Research agencies) who can act as consulting supplier. This is more people dependent than agency related, although it is fair to say that some agencies try.” FMCG IDI<br />“20 years ago traditional research was to provide tables without summary, today what does traditional mean? ....it is more important than ever to connect the dots, because there are even more dots with new technologies” FMCG IDI<br />Specialist techniques are desired but it’s what you do with them that matters<br />Sales & Trend specialists, including the likes of Nielsen, Mintel etc., also stood out for being ‘specialists in a specific technique or approach’ (like Media agencies), and were also rated strongly on their ‘ability to leverage overseas resources/learning’ and ‘use of traditional/proven techniques’ and hence rated lower on innovative or cutting edge approaches.<br />We found agreement between Australian and UK/US companies on these core performance areas, but marked differences on most other attributes, with Australian respondents rating Sales & Trend companies down, particularly in their ‘ability to provide clarity and prioritisation of business issues’, as well as on ‘challenging you’.<br />Overall performance was on par with most other agency types (in the middle) and key drivers grouped into three dimensions, all similarly weighted as show in Figure 8. <br />Figure 4: Performance Perception Drivers – Sales & Trend Specialists<br />While performance across all respondents was rated strongest on being specialists in a certain technique, use of proven techniques and ability to leverage resources from other markets, it appears that these are not main driving factors; rather it is their business acumen, pro-activity and ability to provide insight, tailored solutions and be cost-effective that drive opinion of performance in helping businesses make successful commercial decisions (and these were also the areas in which there were discrepancies between Australia and overseas respondents, i.e. driving the overall difference in performance perceptions).<br />These findings reflect those from the GRIT report which concluded that:<br />In an age of high tech solutions, the “high touch” factors...remain as important today as they have ever been. Listening well and having a good relationship with the client – along with familiarity with the client’s needs, rapid response, meeting deadlines, and having a knowledgeable staff – are key discriminators.<br />While new technologies, techniques and innovative approaches are desired and clearly have a role to play, the lesson here is again clear – it is not the tools that help clients make successful commercial decisions, but the knowledge or commercially relevant insight which comes from harnessing such tools, which is the role that the Market Research and other consulting agencies play.<br />Market Research Agencies – what we do well and what we could do better<br />If we include small, senior-led, medium and larger, global Market Research agencies as one business, our research indicates that the industry has tremendous breadth and also variety. While small, senior-led agencies are performing strongly on business acumen, partnering factors, ability to deliver commercial insight and consumer understanding, as well as offering novel approaches or specialist techniques (strengths most similar to the Management Consultancies), the larger, global Market Research businesses are more able to leverage resources/learnings from overseas partners, effectively use cutting-edge tools, or work with proven techniques and provide consistency. Larger Market Research companies also score slightly higher on creating successful partnerships. <br />Figure 5: Performance Drivers – Small senior-led Market Research<br />For smaller, more senior-led research agencies, it is exactly these strengths, their commercial, customised focus, their expertise and ability to partner with clients and be innovative, that drives perceptions of their performance in helping businesses make successful commercial decisions. But for larger, global Market Research agencies, their ability to provide consistency with what was done before and leverage learnings from other markets where they operate that are their key performance drivers. <br />The medium-sized, local Market Research companies stand out for being able to turn things around quickly and efficiently, offering tailored solutions and for providing in-depth understanding and insight; they also scored highest on being cost-effective and providing great value. In comparison to the small and larger Market Research agency types, the analysis indicates that the 4 dimensions driving performance perceptions are almost equally balanced, but their ability to be cost-effective/provide value is a key driver on its own.<br />Figure 6 SEQ Figure ARABIC : Performance Drivers – Medium, local Market Research<br />Figure 7: Performance Drivers – Larger, global full service Market Research<br />Summary<br />In summary, research agencies are clearly performing well across a wide variety of factors, each with their own particular style and angle (although all performing well on being a source of independent objectivity – which is possibly being taken for granted and not really discriminating between the agency types discussed, either Market Research or otherwise) – but no one agency is everything to every man.<br />Having looked at clients’ business challenges and changing needs, we believe there are a number of performance gaps and therefore learnings that can be taken from this research, which impinge upon how research or information providers do business. Clearly, there are ever-increasing time and budget pressures; budgets are stretched and more needs to be done with less, and in less time than before; decisions need to made and actions taken without delay. Agencies need to be able to react to this environment and be faster, flexible and more efficient than ever before:<br />“We’re looking for newer, quicker ways of working ... but gone are the days when you’re given 2 weeks to write a proposal... it’s more likely that if we give you a brief we need to proposal the next day.... so we need research that is as dynamic as our business, which is where there is a gap at the moment” – FMCG IDI<br />At the same time, agencies need to be more cost-effective or be perceived as giving greater value (at the same price), but not at the expense of quality. One or two agencies types appear to be doing reasonably well on cost-effectiveness in comparison to others, but there is a sense that, at least for some clients, it’s not necessarily about lower cost, but more about finding alternative ways of doing things that are just as good, if not better, but which are also more cost-effective, faster and add value:<br />“Agencies need to think like us, smarter, efficient, and more for less – it’s about value” – FMCG IDI<br />“The key things I look for in an agency are expertise, senior contact person who manages my project from beginning to end and competitively priced” – FMCG IDI<br />Further, we have seen that the world is changing – fast. Data is not only becoming more available more easily and more cheaply, there is a plethora of data from a growing number of new sources, thanks to the internet and social media. However, clients recognise that the data has little intrinsic value in itself, but it’s what you do with the information that counts. Our research and analyses also showed that it is the interpretation of data, the delivering of insights and understanding from the information and the thinking that drive perceptions of strong performance:<br />“For research agencies going forward, they should act more like consultants. By that I mean put more thinking into the reports, not just report slides and slides of data” – FMCG IDI<br />“Anyone can do research, it’s not the depth of data that is going to win anyone starts, it’s what you do with it. ...Agencies need to think more about their depth of understanding not breadth... they don’t want to weaken their expertise in something” – FMCG IDI<br />“It’s not the traditional research that we would have done, but it’s about interpreting the facts. We’ve always had the info but it’s what you do with that that’s important” – FMCG IDI<br />Again, some agencies are already delivering on this, clients feel, so it’s not necessarily perceived to be a performance gap. Rather, the need to deliver insight and understanding is, on the one hand, related to the areas on which there is room for further development (i.e. commercial expertise and relationships), and on the other hand, may become a different type of challenge as data sources and volume explode. Do research agencies have the right skills and technologies for dealing with this commoditisation of data?<br />Clients are facing ongoing, tough challenges with competition intensifying, and with various technological, economic and social changes impacting customer behaviour and needs. Clients are looking for new ways to tackle these challenges and are looking to research and other business partners to help them. To do this well, and in order to help ‘provide clarity and prioritisation of business issues’, agencies need to be able to act more as consultants, to develop stronger, ongoing partnerships, challenge thinking in the business, be proactive and have deep knowledge of the client’s business/category (as well as turning data into insight, foresight or strategy), as highlighted by the following comments:<br />“Agencies just need to work at blurring the line of the researcher and the agency – being seen as a consultant...“– FMCG IDI<br />“We now use agencies that either come to us with thought leadership on some of these areas and we trial them, or we use agencies that we have a good relationship with and are willing to work with us and where we think the thought leadership is. They are flexible and wanting to work with us, and are hungry to try new things for new solutions” – FMCG IDI<br />“The days of factory research agencies are going” – FMCG IDI<br /> “I think research agencies are on the right path. They just need to have a presence in the business, a history with us and be close to the team” – FMCG IDI<br />All in all, these last quotes sum up our thoughts. Research agencies are not doing badly, but, as with much market research, we are looking back in time. Looking forward, we know that our clients’ landscape is changing rapidly, and predict that if we want to continue to be successful, we will need to change too and potentially quite radically if we want to really help our clients tackle the big challenges ahead. <br />6.Conclusions – where to from here?<br />There is a sense that we are on the verge of a significant shift in the Market Research paradigm; given the explosion of new technologies, emergence of new competitors including DIY research, and the move from a long period of (data) scarcity to one of infinite abundance, and commoditisation.<br />We have seen (from our reading) that the world is changing – both in terms of the market conditions (economic, political and social), and in terms of the technologies now available to and assisting in the research business. <br />Looking back at the history of the Market Research industry in Australia, we have evidenced the evolution of the Market Research business model; the Market Research industry has had to change and adapt with the external conditions and challenges, as well as exploit new technologies as they emerge and become viable and accessible for Market Research purposes to meet new needs and remain competitive. 80 years of innovation and growth surely proves that the industry has the ability to adapt and survive.<br />The shift from data scarcity to abundance which, coupled with the new technologies available that continue to expand exponentially, will inevitably change the Market Research business model again, shifting the competitive framework and client expectation.<br />We believe we will need to move our focus from being data and insight providers, bound by our rules and methodological rigor, and project by project based; to being creators of foresight and strategies, being ‘methodologically agnostic’ and working hand in hand with clients, not as suppliers but as an extension to their business. This requires moving from an ad hoc project by project orientation, to a continual process of insight utilising multiple data streams that are invisible for consumers.<br /> In this emerging approach, we will need to be extremely clear about what business/client questions we are looking to find the answers to in the vast ocean of information, and we will need to develop (or borrow and adapt) new tools and techniques to harness this abundance of data (e.g.; data mining, analytics and integration) to ensure what has been our speciality does not become a simple commodity.<br />Our research has revealed that clients are facing challenges which reflect the current market trends and social changes, so client understanding and innovation remain vital, however commercial reality drives tighter budgets and faster insights. Some clients are resolving the pressures by looking to new approaches, including considering how to make the most of social media, ideally at potentially lower cost than ‘traditional’ Market Research approaches. <br />The research buyers that we surveyed; both in Australia and overseas were still relatively supportive of the Market Research industry as a whole versus other consulting options. There were no standout shortfalls in Market Research support versus consultants and other information providers. However, we anticipate that we are unlikely to continue to enjoy such a measure of satisfaction unless we continue to evolve with the changes around us. This research does find evidence of differing consultancies having varied strengths versus Mar