Market research, industry re-inventing itself

Do you know who ordered the first commercial computer in the 50s that was used for civilian, non-governmental purposes? Nielsen. Who coined the ubiquitous business term ‘market share’ in the 30s? The same guy, Nielsen. Nielsen, the leader in the business of market research, was at the forefront of the informational revolution in the 30s and 50s. However, the exciting innovation-driven beginnings do not reflect the current state of the industry.

Case in point – Van Westendrop’s sensitivity meter was introduced in 1976, over 40 years ago, and with occasional brush-up, it is still widely used today as if nothing has changed.

Likewise, Rensis Likert invented the Likert scale, the most consistently employed research tool with minor fluctuations in the debate surrounding its misuse. The only issue is, Likert passed away in 1981 – before the author of this text and majority of my colleagues were even born.

This scale presented a true breakthrough when it was introduced in the 1930s. So what is the future of an industry that uses tools from almost a century ago?

Understanding innovation

As Noah Brier, co-founder of Percolate noted, the word innovation itself has come to represent so much nowadays that it almost lost its potency and meaning.

To understand it as a phenomenon and grasp its manifestations in our industry, ironically, we need to look back at the past. Usually, when trying to pin down the nature of innovation, most assume a linear progression – one small idea on top of another one. The reality, however, takes a different form.

‘Innovation is taking two things that already exist and putting them together in a new way.’ – Tom Freston

Using historical data on technological advances, economic structure, salaries, and political unrest, theorists Freeman and Louçã postulated the so-called “Kondratiev waves” to describe clear patterns linking innovation to the performance of the economy. The breakthroughs we distinguish as innovative are a consequence of accumulative knowledge and evolution, rather than revolution. Take for instance technological waves of innovation; at each stage, one technology is pivotal and defines the global economy. We see the trends growing and then steadily declining.

Right now, we are entering the sixth wave of technological innovation and the shift can be observed through eminent changes in the market research too. We increasingly move away from the survey, to automation, providing behavioral insights and big data interpretation. Consequently, old conglomerates such as Nielsen and Ipsos already face up to 5% drop in sales in comparison to the same semester last year, while Gfk, the 4^th biggest market research company was bought off by KKR effectively no longer in the market research business. Simply put, their conventional research and business strategy are no longer adding up.

The new high

While the state of the conventional market research is on a decline, new opportunities are emerging. The most notable factor is big data, which begins to dictate how we understand user and consumer behavior by the minute but also shapes clients’ demands. Further, Satya Nadella, the CEO of Microsoft, predicted that the true commodity of tomorrow would be – human attention.

Trends such as big data will be here to describe and provide numbers. However, turning data into insights means going a step back to uncover the reasons behind (consumer) behavior in a predictive manner. While the conventional methods and suppliers face a downfall, EyeSee chooses the right tools and innovation effectively doubling both in team size and revenue for the past 2 years. The path to growth for both us and our clients is clear – behavioral research based on subconscious insights.