BtoB: What will be the big trend in market research in 2005?
Cook: The continuing growth of online market research, which is expected to cross the $1 billion mark for the first time ever. Online market research spending is projected to grow by 16% in 2005 to nearly $1.125 billion. In 2000, online market research spending was a mere $256 million. More large tracking and ad hoc surveys will move to the Web. Concept and product testing will continue to see the largest use of online market research, followed by sales tracking.
BtoB: What's the trend in spending on market research?
Cook: Global market research spending in 2003 was estimated at $19 billion by ESOMAR, representing an increase of 5.1% over the previous year. In the same time period, U.S. market research spending rose by 5.6% to $6.66 billion. The global market research spending in 2004 was $20 billion, an increase of 5% over 2003. Global market research spending is expected to grow 5% to 6% annually during 2005-07.
The Inside Research Roundtable of large U.S. market research buyers surveyed last October reported that 43% will spend more for market research in 2005 than in 2004, somewhat higher than 36% a year ago. However, 20% will spend less, over twice as high as a year ago. The remaining 34% report no change, down from 55% a year ago.
BtoB: How are marketers proving ROI on market research?
Cook: Establishing the ROI on market research has proven even more elusive than the ROI on advertising, in part for the same reason: Many large-scale research projects have a multiyear, even multibusiness, payout.
Unfortunately, not all research recommendations are acted upon, and researchers resist being judged on those cases. One might argue, however, that unless the client and the researcher have an agreement upfront about how the research findings should be acted upon, the research money could probably be spent better elsewhere.
BtoB: Where do marketers still make mistakes when it comes to research?
Cook: A recent survey of senior marketers by the Association for National Advertisers found that many senior managers were frustrated that high-ticket segmentation studies failed to be actionable. The key to actionable research typically lies in properly defining the research objectives prior to launching the project. If the business plans and the research plans are not aligned, the ability to act on that research is reduced.
When research managers put on their business hat, they will see that it is more critical to take the time to clarify the problem and time and budget parameters than it is to jump quickly through the wrong burning hoop.
BtoB: What research practices are companies using in-house?
Cook: Increasingly, in-house researchers are being asked to have a deeper understanding of the business and finance issues that relate to marketing activities. In the ARF's benchmarking work on marketing ROI, we've found that strong, business-savvy researchers are readily appreciated by the marketing finance people in their company. This is especially true when the researchers have taken the time to relate their research metrics to the finance measures managers are using to align decisions across the organization.