In 2018, the market research and insights industry will end as we know it! Well, that’s what some people are saying. Adoption of emerging technologies like automation and artificial intelligence has fed the water cooler rumors of the industry’s demise. But, I’m happy to report that market research is alive and well. In fact, the latest IBISWorld report on the market research industry predicts:
“Over the five years to 2022, revenue for the Market Research industry will continue to grow as businesses increase marketing budgets amid strengthening economic conditions. The rebounding labor market will lead to a rise in consumer spending, in turn expanding corporate profit. With recovery underway, revenue is forecast to increase at an annualized rate of 1.0% to total $21.1 billion over the five years to 2022, as businesses continue spending more on advertising and research and development.”
So why the gloomy outlook on the future of market research? I believe it is partly due to how we define innovation in our industry. This realization occurred to me as I recently looked at The GRIT report, our industry’s standard for identifying the most innovative companies in market research. I found of particular interest the top 10 most innovative suppliers list. For this list, both suppliers and clients can vote for the “most innovative” suppliers each year.
The 2016 GRIT report gives some interesting insights into how we define “innovative” for suppliers. It states:
“In terms of why these companies are innovative (beyond the use of words like ‘new’ and ‘innovative’) the two key drivers were ‘Methodologies/Techniques’ and ‘Technology/Tools’”
For more insight into how innovation is defined:
“This finding flies in the face of the people who say real innovation is about people, storytelling, and co-creation. In order to score well on Innovation, having good, new and innovative tech is a key part of the picture. Terms like ‘people’, ‘data collection’, ‘leadership’, ‘virtual’ and ‘quality’ were only used occasionally – with the two key phrases occurring more than ten times as often.”
Therein lies the issue. As an industry, we have succumbed to qualifying shiny new technology and trendy methodologies as the epitome of innovation. The result? More than half of the innovative suppliers list has appeared in the top ten in a different order for three years in a row.
While we have been focusing on innovating on technology and methodology as an industry, external industries such as the big five consulting firms and advertising agencies have been innovating from a business structure, consolidating their offerings and giving their clients a one-stop shop that has been slowly taking away dollars from traditional market research agencies. Furthermore, innovation on terms that we deem less innovative in the GRIT report such as “data collection” and “quality” have been a focus of innovation for strategic planning firms, further taking away dollars from the traditional market research industry.
While technology and methodology innovation are essential for the market research industry, we must also acknowledge that it is not the only innovation to consider. More importantly, it is not the most critical aspect of innovation. We must look beyond the allure of technology and innovate business practices and growth strategies, too. Disruption will be key to remaining competitive because we’re no longer playing on our home court.
So, how does your market research firm define innovation?