Magazine article Marketing

Market Research: Market Research Leagues

Magazine article Marketing

Market Research: Market Research Leagues

Article excerpt

With the industry undergoing major upheavals, now is the time for brands and agencies alike to reassess their strategies, writes Mike Fletcher.

Over the past two years, there has been unprecedented change in the market research industry. In 2008, revenues in the UK climbed by 6.2% year on year to an estimated pounds 2.1bn, according to the Market Research Society, and international research grew by 12.5% over the same period.

However, as the laws of gravity dictate, what goes up must come down, and during the 12 months to December 2009, total revenues declined by 4.7%, stabilising at just over pounds 2bn, while international research plummeted by 8.3%. Domestic research declined by 3%, following growth of 3.8% in 2008, and the slide is not over.

The sector faces yet another stomach-churning drop; agency RSM's 'State of the Market Research Industry' report, published in July last year, warns that the total revenue decline by the end of 2010 may be as much as 7% year on year.

Half of the 345 research professionals surveyed for the report believed that the impact would continue to be felt over the next two to three years. So, how are brands dealing with these changes and what is the impact on their relationships with their agencies?

'Since the general election, governmental research has all but completely dried up, while, for anyone with the COI, automotive or a large number of public-sector clients, this is undoubtedly a difficult time,' says TNS managing director Paul Edwards. 'Most other sectors are showing signs of recovery, however. Finance is certainly stronger, but from a lower cost base, consumer research is better this year and technology is a definite growth area.'

Mark Speed, managing director at IFF Research agrees. 'Our public sector work was booming toward the end of 2009 but has now gone quiet while everyone awaits the outcome of the government's spending review Financial services and FMCG, however, are really starting to pick up.'

What has become clear is that, despite the influences of performance across different sectors, the fall-out from a turbulent 2009 means that the research agency model as a whole has now had to change.

With reduced marketing spend and greater involvement from procurement departments, brands have had to alter their approach to market research.

Financial-services group Aviva is a case in point. It has been consolidating its unofficial roster of global research agencies during the past year. However, head of marketing and communications strategy, Christy Stewart-Smith insists the brand will continue to work with an external agency to carry out research, which is considered vital to devising its marketing and business strategy. 'We require regular information on consumer attitudes and trends, but we now commission more on a global basis rather than at multiple local levels,' he says. 'It's a more joined-up company approach which enables us to track KPIs across worldwide markets.'

Stewart-Smith suggests that market research has had an easier time than other sectors, such as advertising, because of its ability to demonstrate value for money and return on investment. However, he insists that innovation is the key to these agencies remaining an important plank of companies' marketing strategies.

'New techniques for achieving quantitive data and online methodologies have made the discipline much more cost-effective and, with the growth of social media tracking requirements, brands are having to evaluate new objectives and ask themselves what insights these new channels can provide,' he adds.

As brands are revising their approaches, marketing agencies, too, need to ensure their attitude is fresh and techniques are up to date, according to Stewart-Smith, even if they have been holding down a place on a company roster for years.

'The relationship between agency and brand is now more important than ever,' says ICM Group chairman Justin Sampson. …

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