The Insight Economy Special Report 2017

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RACONTEUR.NET 03 THE INSIGHT ECONOMY 24 / 05 / 2017 /insight-economy-2017 RACONTEUR DAVID BENADY Specialist writer on marketing, advertising and media, he contributes to national newspapers and business publications. MARK CHOUEKE Former Marketing Week editor and Sunday Telegraph business correspondent, he is now a freelance writer on marketing, technology, innovation, big data and consumer trends. NICK EASEN Award-winning freelance journalist and broadcaster, he produces for BBC World News and writes on business, economics, science, technology and travel. LUCY FISHER Specialist writer on media, marketing and technology, she contributes to The Guardian, Newsweek, International Business Times and Marketing Week. CHARLES ORTON-JONES Award-winning journalist, he was editor-at-large of LondonlovesBusiness.com and editor of EuroBusiness. TIM PHILLIPS Writer and economist specialising in innovation, he has worked for The Wall Street Journal and The Guardian among others, and is an associate at Enlightenment Economics. CONTRIBUTORS PUBLISHING MANAGER Lucy O'Boyle DIGITAL CONTENT MANAGER Jessica McGreal DESIGN Samuele Motta Grant Chapman Kellie Jerrard PRODUCTION EDITOR Benjamin Chiou MANAGING EDITOR Peter Archer DISTRIBUTED IN PUBLISHED IN ASSOCIATION WITH @raconteur /raconteur.net @raconteur_london T he UK is the most re- searched nation on Earth. Some £61 per head is spent each year on surveys, polls, panels and questionnaires, more per capita than any other country, according to the Market Research Society (MRS). No wonder many Brits are suffering from survey fatigue and refuse to take part in questionnaires. This reluctance to participate is believed to have con - tributed to incorrect polling predic- tions in several elections. The UK's top 100 market research agencies made annual revenues of almost £3 billion in 2015, says MRS. But growth is becoming hard to find in the industry as big businesses cut their budgets. Meanwhile, a range of startup research agencies and new players offering digital methods are looking for a piece of the action. Martin Hanscombe, a director at Kantar Worldpanel UK, says big data can offer businesses strong insights into the behaviour of consumers, but is not a direct replacement for established research methods. Kan - tar runs a panel of 30,000 UK shop- pers, who record the shopping trips they make and the brands they buy. This data is collated to tell brands and retailers about the performance of their products. The advantage of such panels is they offer a regular and consistent analysis of behav - iour, which can be compared over months and years. But Mr Hanscombe believes dig- ital research, such as online ques- tionnaires and analysis of consum- ers' online behaviour, is becoming more attractive to clients. "Among clients, there is an appetite for nim- bleness and direct dialogue with consumers. Digital offers a direct connection, but what are sacrificed are the solidity, rigour and foun - dation of reliable behavioural evi- dence and solid comparisons versus the past," he says. A significant trend among brands over the past decade, says Mr Hanscombe, has been a shift away from prioritising market share – the amount spent on their prod - uct compared with competitors – as a measure of success. Instead, brands are putting increased fo- cus on market penetration – the percentage of the population that buys their products. This comes af ter academic ana l - ysis of shoppers' panels showed traditiona l assumptions about sa les grow th were wrong. It had long been assumed that once con - sumers star ted buying a product they would become loya l, lifetime consumers. "It doesn't work like that," says Mr Hanscombe. "Even the strongest brands experience churn in people coming in and out of the brand. People shop around, so the cha llenge for brand own - ers is bringing in more people." Brand penetration has become the key measure of success, rather than the share of market revenue, he says. Even so, market share still main- tains a grip on the expectations of many companies. The notion of market share was invented in the 1930s by AC Nielsen, the first com - pany to offer market research and now one of the largest market re- search businesses in the world. Shoppers' panels run by compa- nies such as Kantar and Nielsen are holding up strongly against compe- tition from digital entrants and big data analytics. "There's quite a lot of habit in market research about what techniques are used," says Simon Hay, former chief executive of dun - nhumby, the data company which runs Tesco Clubcard. This, he believes, acts as a break on the adoption of new forms of research. "Once you become the lingua franca of the industry, that gives you some degree of protec - tion from the forces and winds of change big data is throwing at the market," says Mr Hay. While the "longitudinal" nature of panel data gives it comparability and stability, he believes the sheer volumes of data and huge sample sizes offered by big data give powerful insights into shoppers' behaviour. An area of market research where there has been significant dis - ruption is in the measurement of media audiences. This was once involved monitoring TV, radio and print audiences on behalf of advertisers. But with the grow th in digital and mobile consump - tion, and an explosion of devices for consuming content, this has become far more complex. Google and Facebook account for a huge share of time spent on media, so their analysis is vital. However, there has been con - troversy over their measurement methods, with critics accusing them of "marking their own home- work " by creating their own meas- urements. But this is now changing and there are moves to introduce independent third-party verifica- tion of the internet giants. Even so, says Hannu Verkasalo, founder of Verto Analytics: "As long as Goog- le and Facebook are dominating, it is very difficult for other meas- urement companies to challenge those tools. As long as they keep this for free, it is really destroying many businesses." For James Oates, marketing effec - tiveness director at Nielsen UK and Ireland, market research is facing an ever-expanding set of challeng- es as consumer behaviour changes. "There's an evolving profile of what is going on around the consumer that makes the industry challenging and interesting," he says. Market research has faced some reputational challenges over the past 20 years, mainly because of its uses in politics. Richard Hun - tington, chairman and chief strat- egy officer at Saatchi & Saatchi London, says qualitative research, such as face-to-face discussions, has been damaged by the Amer - ican approach of focus groups. "Qualitative research becomes bound up in the mire of spin; it is devalued and debased and seen as a means of making things blander, but working out how to manipulate people," he says. Meanwhile, quantitative research, based on surveys and polls, has suffered from making wrong fore - casts in the 2015 general election. "We are seeing a return to old-fash- ioned qualitative research, with open-ended discussion of topics to yield better insight rather than the focus-group tradition of push - ing a particular point of view," says Mr Huntington. And what of the future? A great hope is machine-learning technol- ogy, which will analyse billions of pieces of data to make accurate pre- dictions about expected behaviour. So perhaps market research hasn't reached its peak quite yet. Shoppers' panels face off with digital £61 DAVID BENADY £39 Market Research Society £24 From loyalty card data to online buying behaviour, Google searches to website clicks, the digital explosion is offering up vast amounts of information about consumers and voters OVERVIEW Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3877 3800 or e-mail info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media GIDEON SPANIER Head of media at Campaign magazine, he writes columns for the London Evening Standard and is on the executive committee of the Broadcasting Press Guild. SPENDING ON MARKET RESEARCH PER CAPITA UK UNITED STATES GERMANY ESB Professional/Shutterstock THE INSIGHT ECONOMY

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