From its inception in political and social science polling in the early 20th century, the market research industry has grown.
- Market research has grown from its beginnings in political polling and opinion research into a massive global business that influences the marketing decisions of most major corporations.
- Market research analysts rely on statistics and mathematical models to predict the behavior of consumers in response to possible marketing and advertising strategies.
- Market research is provided by a variety of organizations and used by for-profit corporations as well as nonprofits, government organizations, consultants and others.
From its inception in political and social science polling in the early 20th century, the market research industry has grown to over $80 billion worldwide, currently experiencing an average 5% annual growth rate. Nearly three-quarters of 1 million marketing jobs in the U.S. alone revolve around the acquisition and use of market research data. Privacy issues such as "do not call" lists and the spread of cell phone usage and the internet has led to the ascendancy of online data collection. Furthermore, the industry has not been immune to merger and acquisition activity affecting other service sectors.
What is marketing research?
According to Investopedia, "Market research is the process of determining the viability of a new service or product through research conducted directly with potential customers. Market research allows a company to discover the target market and get opinions and other feedback from consumers about their interest in the product or service."
But companies do research not just about new products, but also about how to better position and market their existing products as well, and how to expand into new areas. Market research provides data and validation for advertising strategies as well as social media campaigns and other approaches to the market as a whole.
What do market researchers do?
The most common job in marketing research is research analyst. According to the U.S. Bureau of Labor Statistics, there were nearly 700,000 market research analysts in the U.S. in 2018 (the most current information available), with 20% growth anticipated over the next 10 years. These analysts require at least a bachelor's degree, with strong math and analytical skills, and earn in the range of $65,000 annually. But becoming a marketing manager or advertising manager – either of which can be a logical growth opportunity for these analysts – has a broader opportunity for career advancement and earning potential.
In addition to marketing research organizations, analysts trained in market research can find good positions in corporations seeking internal research expertise, as well as nonprofit organizations, trade associations, consulting firms, and various levels of government.
You can dissect market research analysis in myriad ways, such as research categories that include customer satisfaction, advertising effectiveness, product development, price elasticity, or developing a market forecast; by population, with consumer research versus business to business market research; or by industry. However you slice the industry, you can break marketing and research companies into three categories:
- Market research associations that promote the industry
- Market research suppliers of syndicated or secondary research
- Market research firms providing custom or primary research
Cover the ground rules with market research associations
While no government policy regulates the market research industry directly, legislation such as "do not call" lists and the exemption of cell phone numbers from phone directories do impact its execution, specifically, how effectively a market research company can collect data. Market research associations keep its constituents and the public informed about trends generated by and affecting the industry, and serve as liaison between the public policymakers and private enterprise.
Who are the market research giants?
Nielsen, best known for its television research, is by far the largest market research company in the U.S., more than twice as big as its nearest competitor, Gartner. IQVIA, Kantar and Information Resources Inc. round out the top five, with a sharp dropoff after that. While making the top five in U.S. revenue, both IQVIA and Kantar produce most of their revenues outside the U.S. Rankings and revenues in this volatile industry change rapidly, as companies change places and merge.
According to IBISWorld, the U.S. marketing research spend is estimated at over $22 billion this year, though with anemic growth expected (pre-pandemic information). All categories of business are hungry for information that can increase their success and sales. While industry growth has been slow, overall expenditures in research and development are expected to grow in 2020, offering opportunities for enterprising research organizations to offer products that meet the demand for intelligence.
Access market information quickly and economically with syndicated reports
Secondary research makes up roughly one-third of the multibillion-dollar pie. A market research analyst compiles data and writes a report for general publication. Use these reports to ease your progress over a learning curve about industry trends and issues, market demographics or basic competitive intelligence.
Dive deep with primary market research surveys
While secondary research gives you quick access to inexpensive intelligence, you typically won't get in-depth information or specific answers. Primary research enables you to discover specific information tailored to your organization's needs. Plus, by definition, it's your own information undisclosed to anyone else, to help uncover and exploit hidden opportunities in the market or weak spots in your competition.
- If you're new to market research, look up the associations' websites first to get a helpful impression of the industry's scope and capabilities before moving ahead with a market research plan.
- Consider using a specialty firm instead of one of the majors, to better target the specific research your organization needs.
- Build on the results by directing future efforts based on past results.