Why do companies use market research?

I am currently working on a project for Vision Critical’s University, creating an introduction to market research, which should appear in a month or so. As part of that project, I’d like to share some of my thinking about why companies conduct market research, to see what my peers think, for better, worse, or different? The four main uses of market research, by commercial organisations, in descending order of importance (in terms of spend) are: Monitoring performance, for example ad tracking, brand awareness, viewing figures, usage, customer satisfaction, mystery and shopping. Finding things out, for example the size of a market, current usage patterns, and market opportunities. To test ideas and products, for example ad testing, pack testing, and pricing research. To help create new products, ideas, campaigns etc. Monitoring Monitoring studies tend to be ongoing (as opposed to ad hoc) and they tend to be quantitative. The 2012 ESOMAR Global Market Research report shows this is the largest category of research spend, accounting for between one-third and half of all research dollars (depending on which category you assign some of the items to). As well as large-scale quant trackers, other approaches include automated and online measurements, mystery shopping, community […]

Are Instagram and Facebook Crazy? They want to sell your photos!

The BBC is reporting that Instagram, recently bought by Facebook, is altering its privacy policy to allow third-parties, such as FaceBook and advertisers, to access its members’ information and to use their pictures without permission or recompense. Yes, it is being reported that Instagram is going to be selling your photos, without asking you, without paying you, and without an opt-out! Instagram/Facebook are not proposing to offer an opt-out of this commercialisation of people’s pictures. They have said, reportedly, that people who are not happy must leave instagram by January 16, 2013 – just under a month from now. CNET has a story titled ‘Instagram says it now has the right to sell your photos’ and Wired is offering advice on how to protect yourself with its article ‘How to Download Your Instagram Photos and Kill Your Account’. If the reports are accurate and if Facebook does not change its mind I would expect Instagram’s, already weak, user base to largely disappear and for Facebook to face a backlash from users and perhaps legislators. Facebook paid $1Billion for Instagram, it could soon be worth very, very much less than this. In a recent post on Vision Critical University I showed […]

Significant Digits – a key element of clearer numbers

I am in the process of writing an introductory statistics book for market researchers. This post and some of the following posts are taken from that book, in an attempt to field test the style, approach, and depth I am employing. All comments welcome. My recommendation is that most numbers in presentations and reports should be presented as 2 or 3 significant digits. I feel that the issue of significant digits is more important than the more frequently discussed issue of decimal places. In a number, the significant digits are those that carry the key details. If a bank robber steals $56 million, the 5 and the 6 are the significant digits – and the million gives the scale of the number. If we say that PI is 3.1416 then we are showing it to four decimal places and five significant digits. Table 1 shows the number of internet users in five key, original, members of the EU; showing the raw numbers and the same numbers using two significant digits. Column B shows the estimates in the format they were downloaded from the InternetWorldStats website. These raw numbers contain 7 or 8 digits, and commas are used to help make […]

Research Communities and Market Research Rules

One of the questions I get asked quite often is whether or not research communities, such as MROCs and Community Panels, are possible inside the rules of market research? The answer is caveated, it depends on which community and which country’s research rules. In the post below I will set out my layman’s (i.e. it could be wrong) view of where communities sit in terms of the rules. Why communities might NOT be market research? There are three main areas of concern: Many communities use client based incentives, e.g. shop vouchers, air miles, telephone minutes etc. This tends to be against societies’ guidelines as they (and some legislators) feel that this is either distorting the market or a form of sales promotion. Brands are keen to use these sorts of incentives because community members tend to prefer them and they increase the bonding of the community members and the community. If the community is intensive, for example a long term, qualitative/ideation community, the community members tend to become advocates for the brand. The view of societies’ tends to be that this is market distorting and can be seen as a form of marketing. Brands are keen on this element of […]

Social Media Research and the Trough of Disillusionment

At the Festival of NewMR, Wednesday 5th December, I will be presenting a summary of where social media research is at the moment and where it is going next. As part of that presentation I will be exploring why I think social media research is heading into what Gartner have termed the Trough of Disillusionment. This post explores what I mean by this prediction. The term social media research has two definitions, a broad one and a narrow one. The broad definition includes social media mining and listening, netnography, communities, smartphone ethnography, research into social media, and social media as a sample source. The narrow definition refers just to the seeking out and collection of large amounts of naturally occurring social media conversations and comments – this definition includes social media listening and mining. It is this narrow definition of social media research that I think is heading into the Trough of Disillusionment. It should be noted that the Gartner Hype Cycle is a loose description of a repeatedly seen phenomenon – it is not a law and it is certainly not a specific mathematical formula. But it can help understand what often happens to new technologies. Social media research’s […]