Web 2.0

New Fellow Liane Ringham says the economy is transforming. She points out that some are predicting that the changes will be so dramatic it will be like a second industrial revolution with the new knowledge, collaborative or ?wiki' economy.

?It will be a wild and fast ride for our economy almost certainly with many winners and inevitably some potential losers. If anyone is in doubt about the potential for impact of new technologies on our industry - take a look at Facebook where survey questions can be bought for as little as $26. There is likely to be a radical reduction in the purchase price of raw survey information that traditional market researchers used to sell for many thousands of dollars. No matter what we think of the quality of this new information - these impacts will undoubtedly change value perceptions.'

Australian Market and Social Research Society (AMSRS) president Peter Harris agrees that the rise of so-called Web 2.0 and online social networking will have a big impact on market research. He's recently returned from a conference in New Zealand and was particularly impressed by Duncan Stuart's paper on this topic.

?It's a big shift. The internet is no longer just a tool for research, it's a place to get opinions from those you trust and not just companies with vested interests,' he says.

Mark Sundquist, joint CEO of The Leading Edge, also agrees and believes there are opportunities to use this technology in product development and brand strategies. He points to Glaxo Smith Kline, which recently released a new product developed entirely by online communities.

Association of Market and Social Research Organisations (AMSRO) president Louise McCann, who is also Research International chairman and director of offer across the Asia Pacific, says the trade body is inviting a Web 2.0 expert to address the next Leaders' Forum, which will be held in Daylesford on 13 and 14 March.

?We need to understand the implications of Web 2.0 when it comes to understanding consumer behaviour. We need to look at what influence virtual social networks will have on consumers and citizens.'

(AMSRS Summer School 2008 will feature a workshop by Ray Poynter about market research in the Web 2.0 world.)

Skills shortage

McCann says the number one challenge facing the industry in 2008 will be a continuing skills shortage. This will be exacerbated by the rapid technological changes affecting the way we do business, communicate with each other and enjoy entertainment today. Sundquist agrees that a greater diversity of skills is required. He also believes the industry needs to get better at skills development - in particular, to embrace the rise of e-learning and move away from fixed class style development by using e-tutorials and online learning communities.

GMI's Benny Huang says the big guys, in particular, will continue to struggle to attract and retain talent.

?Small agencies also are outperforming large ones on both ability to attract senior consultative talents, and offering competitive price, compare with "huge financial and managerial infrastructure costs" the giants are facing.'

As the use of the market and social research continues to grow in the Asia Pacific region, particularly in China, there are no reassuring signs yet that the brain drain from Australia will abate. Harris acknowledges the need to get Australian expertise into our neighbouring markets but says that some Asian buying teams are not yet prepared to pay the same rates for services that this expertise can attract in the Australian Market.

Market structure

Sundquist predicts there will continue to be market consolidation at top end and fragmentation at the lower end in the domestic market and social research industry.

Unfortunately many believe the tendency to treat data as a commodity will continue. ?There will be ever declining margins at the lower end - exacerbated by good, fast, cost effective online offers,' says Sundquist. ?However, there will be an increase in online research, not just as alternative to telephone but actually research that is online enabled.'

Huang agrees. ?More and more market research projects have been fulfilled through the internet community. It's a golden age for online market research. As a result, clients will use small agencies for work they would in the past only have dreamt of giving to global players.'

Huang points to a new breed of small agencies run by very smart, experienced consultants, who have global resources to support their market research needs.

?These boutique companies can purchase resources through virtual networks and internet panel providers. They can outsource to much lower cost countries (like India), and hence obtain competitive advantage to compete with existing big market research agencies.'

Harris says he expects more consolidation in the panel market. ?Those who can demonstrate quality will succeed - it's not about the size of the panel.'

Tools and methods

Sundquist says there are already signs that there will be a ?product flood' of proprietary tools in 2008, as multinational companies continue to build their networks and seek to differentiate themselves.
But these new products are unlikely to use neuroscience. In fact, he boldly predicts the death of neuroscience. ?It tells you what is happening, not why. It hasn't gained any traction, due mainly to its lack of commercialisation.'

There will be increasing pressure on the research industry to provide more effective ways of measuring advertising engagement and of delivering a ?single source' measure of different media platforms. Belinda Rowe, head of buying agency Zenith Optimedia, told delegates at an advertising industry conference in December that ?a lot of the industry research has become quite marginalised, so we're only using it essentially for trading'. Nine Network sales director Peter Wiltshire defended the OzTAM rating system at the same conference.

Online advertising will continue to grow at exponential rates, according to Patty Keegan, general manager of the Internet Advertising Bureau. Keegan doesn't expect the online advertising industry to experience any significant slowdown over the next three to five years. The research industry will need to continue to sharpen its approach to measuring audience engagement online and ?total minutes' looks set to replace unique visitors.

On the retail front, Harris believes consumers are becoming increasingly difficult to segment and don't easily fit into a cross-tab.

?People don't fit into segments as they have in the past. We need to adapt our methodologies accordingly.'

He also points to the increasing popularity of shopper research and believes that this trend will continue.

?It will become increasingly important to conduct research with people in more natural environments and closer to the time when they're making decisions. Central location focus groups will become even less common.'

Sundquist agrees that there will be increasing emphasis on ?winning the war in store' - and demand for research that helps manufacturers develop their channel strategies.

Clients' needs

Conversations with clients are increasingly focused on return on investment (ROI) says Harris.

Sundquist says there will be a continued shift in market research spend. Spending on the fast moving consumer goods (FMCG) sector will decline (or at least remain static) while the services sector will continue to invest more in research. Louise McCann partially agrees, although she prefers to say that FMCG will become ?more focused'.

Sundquist also predicts that budgets will shift towards channel and retail strategy, which will result in an increase in shopper work.

Sundquist says that centralised procurement departments will continue to spread from government departments into private enterprise - and that it requires a certain set of skills to manage procurement.
He believes many client organisations recognise that they need to invest more in the development of staff with market and social research expertise and that we'll see more in-house teams evolving from a project focus to a more holistic implementation focus.

While we've known about the dangers of information overload for many years, many clients are signalling even louder than before that they're fed up with reams of data. This could result in less demand for syndicated research and tracking data that has a specific focus and more demand for more general consumer-centric qualitative research, where the consumer - and not the research - sets the agenda.

Harris says, ?Clients want to know what they should do, why they should do it - and they want you to tell them in less than one hour. As a profession, we need more emphasis placed on storytelling skills and clear communication.'

(AMSRS Summer School 2008 will feature a workshop by Belinda Huckle about communicating more effectively with clients.)

Respondent co-operation and sampling

In the coming year, it will be increasingly important - and increasingly difficult - to get a good, representative sample.

?Delivering quality samples is our biggest challenge,' agrees McCann, but she believes it is one the research industry is well positioned to deliver.

Harris agrees, saying online will continue to grow if the industry can get the ?quality issues agreed and locked down'.

Much attention has been directed to the need for quality standards for online panels, which continues to be of critical importance. But with CATI response rates hovering around 10 per cent, some believe telephone methods belong in the conversation as well.

?Trade associations are trying to fix it, but no one can guarantee the result,' says Huang. ?The only ones who can make this happen are the end users, they are the only ones who have the clout to force vendors into a level playing field.'

There are some noises in the US that a Do Not Track register will be launched for internet users who do not want their online activities tracked, stored and used by advertisers and marketers. Given that Australian legislators followed the lead of the US in setting up a Do Not Call register, there is a possibility that the Australian government will follow suit again.

?There's no doubt we're heading into an era where more than ever we need to get permission from people,' says Harris. ?People don't like to be interrupted and we cannot randomly intrude.'

Web 2.0 may also impact on where researchers can find people to participate in research - recruiters will increasingly have to look for people in places they haven't looked before, like social networking sites (MySpace, FaceBook, Bebo) and in virtual words such as the super-hyped SecondLife.

Kerry Sunderland, managing editor, Research News

Click here for highlights of 2007 compiled by Research News  

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