This October, ThinkNow sponsored IDEAS AMAI 2022, one of the largest conferences for the insights industry, particularly for LATAM market research. The Mexican Association of Market Intelligence and Opinion Agencies (AMAI) works to maintain data quality and transparency in market research in Mexico. The event marked AMAI's 30th anniversary, and the mood was festive.
The format of this year's event was different from previous years as it focused on small group sessions led by industry insiders who shared insights from their careers. The objective was not to sell or argue about the best research method but to listen to and learn from speakers and colleagues.
Here are a few takeaways from some of the sessions.
There was a sense of camaraderie and collaboration at AMAI 2022. Researchers gathered to share experiences and learn from some of the best in the field. Access to such diverse perspectives helps broaden our vision of the industry, the companies we represent, and the clients we serve.
If you’re old enough, when you think about commodities, you may think back to the 1983 film Trading Places in which Randolph Duke and his brother Mortimer tried to explain commodities to Billy Ray Valentine. Coffee, wheat, bacon, and frozen orange juice were cited as examples. Fast forward nearly 40 years and commodities are still all those things, but commoditizing products now goes beyond plants and animals. Commoditization can also occur in the digital economy, and we see that play out in the sample industry.
When products have been commoditized, buyers assume the quality of the products is just about equal, so they look to pay a lower price for that good or service. In the case of online sample, all sample providers supply survey respondents, so the choice of which vendor to go which typically comes down to price. But what is often not considered is the respondents’ shelf life and future value, or the source of these respondents.
Most commodities expire. Once opened, a bag of coffee beans may last you six months. Frozen orange juice has an indefinite shelf life, but once it’s thawed, it’s best consumed within two hours. Online sample is not much different. With sample, a person volunteers to respond to a question via an online survey. You may not know that panelists typically have a life span of one or two surveys, and then they are gone forever. Click To Tweet The average respondent only responds to a couple of surveys in their lifetime. Going back to our commodities example, the only way to get more orange juice is to plant more orange groves. Similarly, producing more panelists is the only way to get more responses. To produce more panelists, the online panel must have well-developed panel technology from the point of recruitment to delivery. However, online sample platforms are not SaaS software but more like digital farms. Let me explain.
Online sample is a form of ResTech, a marriage of research and technology. Panels cannot, however, become software as a service or SaaS because they require the digital farming of sample. To put it another way, quality sample must be cultivated. Click To Tweet You could certainly build a service that scrapes the internet for names and loads them up in a database for people with subscriptions to access. However, doing so almost always results in poor client results and violates consumer privacy. Clients pay a CPI (cost per impression) per completed survey. When data integrity is compromised, the response rate hovers near zero.
A survey programming platform, however, is an example of a SaaS technology because it licenses the software needed to build out the survey. Still, it does not provide or require a platform to cultivate or curate panelists.
When you consider panel recruitment, data quality, and data delivery, online sample might not be as commoditized as you think. Sample providers are not all created equal, and the one you choose could impact your survey response rate.
More than 10 years ago, the pioneers of online panels in Latin America began to break new ground in the region by offering online sample methodology. Slowly, market research companies began to see the advantages. Once they finally adopted the methodology, they faced a new challenge in convincing their clients that the result of online sample would be similar, if not better.
For years, the market research industry was devoted to face-to-face research methodologies like pen and paper surveys, which were very time-consuming, expensive, and dangerous in some Latin American countries where, to this day, recruiters are kidnapped or extorted by organized crime. To achieve better results more efficiently, mitigate the risk to recruiters, and be more competitive, research agencies sought ways to educate their clients on how online methodology works, which was already generating good results in the United States and Europe.
The industry took a giant leap forward during the pandemic. What online panel companies failed to achieve in a decade, confinement achieved in two years. Faced with the need to continue collecting data responsibly, research agencies and end-customers in Latin America began requesting online sampling services.
Researchers say that the adoption of the online methodology accelerated by at least four years. This evolution, in record time, ushered in new panels, diversified data collection methods, and consolidated large insights marketplace exchanges.
Now that stay-at-home orders have expired and people are starting to get back out, there has been some regression to traditional methodologies (face-to-face). While not surprising considering some of the challenges surrounding the online methodology like reaching participants with low socioeconomic levels, unconventional regions for the consumer industry, the need for very specific profiles, and data integrity, it's disheartening to see the industry take a step back.
Is the gap closed in Latin America? Perhaps it's too early to tell. We may see this expansion and contraction in the use of online sample for some time as agencies and end clients work through their process of adoption. It's unlikely that online sample will be phased out, but there may be a period of hybrid use of face-to-face intercepts and online panels to bridge the gap.
SampleCon 2022 was hosted at the elegant Langham Hotel in Pasadena, California. This year’s conference seemed like a return to normalcy. People from over 25 countries could attend without restrictions for the first time in two years. COVID was not mentioned, and everyone was in the mood to socialize and talk shop. As in previous years, a couple of recurring themes was the topic of many conversations and sessions, including data quality, the talent pipeline, and online sample consolidation. However, if SampleCon 2022 had to be summarized in one word, it would be acquisitions. But let’s start this conference re-cap with a familiar pain point – fraud.
Despite technological innovations to reduce fraud, data integrity remains a concern within the sample industry. This year has been the worst on record for data quality issues, or so it seems. A consensus emerged during the conference that the industry does not have the proper data collection metrics, which is true in some ways. It is also possible to argue that data quality issues result from a lack of uniform industry guidelines.
Online sample companies have their own fraud metrics that don’t always align with other providers. Fortunately, the industry is innovative, and companies like Research Defender license software solutions to mitigate the risk of fraud. However, if there aren’t centralized best practices on how to eliminate fraud from sample, the industry is still vulnerable to attacks, which can have an impact on providers, panelists, and ultimately clients.
As with many industries, the Great Resignation still impacts the online sample industry. The pool of qualified candidates is shrinking, and companies are competing for the same candidates. During the conference, many conversations were held around the water cooler and most agree that resolving the talent shortage long-term will require an intentional effort to get more college students interested in data science. But that doesn’t solve the immediate need, which is a good segue to another force moving on the online sample industry – consolidation.
Acquisitions have accelerated in recent years. Larger market research firms are acquiring smaller ones, resulting in layoffs in some instances. Sample companies needing talent may be able to offer job opportunities to these job seekers, and since they have insights experience, there’s a shorter learning curve.
The market research industry has recently experienced a lot of flux. Kantar acquired Qmee and Schlesinger, who acquired 20|20 Research in 2020, and most recently, Addison Research, announced another acquisition during the conference. Dynata acquired Branded Research, and the list goes on and on. The consolidation of these market research firms also impacts online panel companies. Will Dynata remove Branded Research from the Lucid (acquired by Cint) exchange? That remains to be seen, and is a question many will ask of similar scenarios. Online panels require a massive investment in technology and implementation. A panel can dry out if not maintained, so the infrastructure must be there.
Nonetheless, there is plenty of opportunity for new online sample providers because they can establish community databases, a skill that large companies are not as well-versed in. So it will be interesting to see how everything plays out. Stay tuned!
Over the past two years, the growth of online sample has been extraordinary, almost too good to be true. Cint purchased Lucid for 1.1 billion dollars. Prodage acquired Pollfish for an undisclosed amount, rumored at $70 to $85 million. There is a lot of money flowing into the industry right now, but the challenge is determining whether or not the growth is artificial, spurred by the COVID-19 pandemic. After all, consumers stayed home for two years, turning to the Internet for everything from food and clothing to streaming media services. As a result, e-commerce experienced record highs, spiking 48%, and streaming viewership surged.
“Lockdown stocks” like Facebook (Meta), Amazon, and Peloton enjoyed record-breaking stock prices, and cryptocurrencies rose in popularity.
But the world is re-opening, and fears about the pandemic are waning. People are yearning for in-person experiences, so they’re getting out – back to work, school, gyms, concerts, and restaurants. Beloved pandemic pastimes like Peloton, who is coping with slowing demand for its indoor stationary bikes, are just trying to survive.
Similarly, requests for online sample spiked during the height of the pandemic. When the pandemic canceled in-person focus groups, the online sample industry benefited from the shift to virtual environments. Consumers had more time to join online panels and take surveys at home. As in-person research activities resume, will we see a slowdown in online requests for sample or in survey participation?
Lucid successfully launched the first programmatic exchange sample platform in the market, which spurred competition as new entrants rushed to copy the model. The biggest companies created their own exchange platform or are leasing the exchange software to create their own exchange platform. This process has become known as ResTech (Research Technology). But post-pandemic normalization of the industry could jeopardize the future of these innovations. Not many companies are focused on maintaining actual panels, which are the bread and butter of online sample. The cost of panels has increased, especially those with a multicultural focus. Hispanics panels are very costly and don’t fit the exchange model at the average CPI rate.
So, it’s possible that the online sample industry is rethinking its dependence on panels, that they are leaning into exchange platforms and survey programming instead. However, panels need people to generate responses and aggregate data. This year, 2022, as we start to emerge from the pandemic, will be very telling. We'll see if panels are still relevant or if exchange platforms will be the main means of sample collection.
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