• by Karlene Lukovitz , December 3, 2008

Market research will need to reinvent itself to combine two "seemingly diametrically opposed developments" in the years ahead, in the view of Adrian Chedore, global CEO of Top 10 market research company Synovate.

Researchers will simultaneously need to become increasingly sophisticated at analyzing very large databases and at delving deeply into the attitudes and motivators of small groups of opinion leaders, says Chedore, who spoke with Marketing Daily this week during a trip to the U.S.

The need for macro data analysis is growing as computer technology makes it ever more feasible to cost-effectively collect and store huge amounts of data in more accessible formats and modeling and analytics continue to advance, says Chedore, who is based in Hong Kong. He notes, for example, that Synovate's Australian division is now collecting one billion records per day.

The ability to mine mega-databases for meaningful insights and predict outcomes for marketing and product development is half of the challenge ahead for market researchers, Chedore says.

The other half is becoming adept at using social media, in particular, to engage in conversation with frequent products/services users to gain a "really in-depth" understanding of the attitudes driving specific markets.

"The key is marrying database analytics and a deep dive" into the targeted consumer, Chedore stresses. At present, most research--the typical representative online surveys of a specific consumer segment--"lies somewhere in the middle between these two," he says.

Market research's strength lies in its foundation in academic discipline and commitment to sound, reliable data, but the flip side of the coin is that the overall business is slow to change. "We're rigorous, but stodgy," Chedore sums up. "The industry hasn't yet really embraced the opportunities to leverage new technology to interact with respondents. We're online, yes--but we're using online mainly as a data collection methodology" rather than as a fundamental game-changer.

On the data side of the equation, Chedore believes that the researcher's role should lie as much in helping companies to harness their own internal data as in conducting research, although he adds that some in the business do not agree that such activities should fall within the domain of market research. Significant opportunities exist in "taking the available data sources within companies, making them compatible, and then interrogating them to answer questions," he says.

However, he also acknowledges that today's typical market research firm/client dynamics tend to stand in the way of such an expanded business relationship. "All market research service companies ask clients to treat them more like partners so that they can serve clients better, and I subscribe to that, as well," he says. "But I also view it as being supremely the fault of market researchers," rather than clients--that the level of confidence needed to have a closer, more inside business relationship has been lacking, he adds.

On a related front, Chedore would like to see more companies focus on greater coordination of projects to garner maximum intelligence from their investments, particularly in today's global business environment. "It's amazing how relatively few companies conduct international research on a comparable basis," he says.

With the exception of the largest consumer marketing companies, the tendency is to conduct discrete projects within specific countries or markets. These projects succeed in answering the question they were meant to answer, but are then most often "put up on a shelf" rather than being incorporated into "one big data library" that would enable the determination of which "learnings" can be effectively carried from one market to another, Chedore explains.

Alternately, the practice of trying to apply research findings from developed markets to emerging markets can be a "huge mistake," he says. "In addition to the fact that these audiences may be very different, it's critical to realize that all markets are changing much faster than they used to."

In other words, the issue is not that there's too little research, but that the research approach often lacks the consistency and compatibility that would allow companies to identify which patterns are the same and different across markets. While this would require "a certain level of centralization of buying or at least of coordinating" research, Chedore says he's not suggesting that companies need to always use the same research firm or attempt to make every research project international in scope. Rather, companies would benefit from establishing corporate-wide guidelines for research projects along the lines of: "When we have this kind of problem we need to research, this is how we approach it," he elaborates.

Turning to the business prospects for the market research business, Chedore says he's "relatively bullish." The business grew at about 2% during the last--albeit less severe--recession in 2001, and it tends to be less affected by economic trends than industries like advertising and media, he says.

"One reason that market research has a less volatile pattern is that some types of data are of a continuous nature," he adds. "It would be dangerous to just shut it off in order to reduce costs in a poor economy--companies would be steering their ships blind. Another reason is that research is needed during a recession to help companies make sure that they lose as few customers as possible. They know that it's much less expensive to retain customers than to have to get them back once things pick up again."

The industry's consolidation has continued this year with WPP's acquisition of TNS and Forrester's acquisition of JupiterResearch. Synovate itself was formed by Aegis Group plc combining a number of smaller companies, and Synovate has continued to acquire smaller firms, including Africa's Steadman Group and U.K. retail specialist PS&A during 2008.

But the business is "still highly fragmented," with the Top 10 accounting for about 60% of the market, and the leaders will resume rapid acquisition of medium-sized ($10 million to $100 million) firms once the economy picks up, Chedore predicts.