Data Analytics: Has the Golden Child of Research become the Golden Parent?

This is an English translation of a report by Finn Raben, Founder, Amplifi Consulting and Simon Chadwick, Founder Cambiar Consulting published by the Netherlands' Data & Insights Network, MOA.

Data Analytics is most often summarised as the discovery, interpretation and communication of meaningful patterns in data, where “meaningful” implies non-spurious correlations (eg the incidence of divorce correlating with margarine consumption in the state of Idaho). This summary definition could just as easily be applied to the profession of market research, but the distinction between the two disciplines is based on the fact that market research is also involved with the collection of primary data, whereas analytics tends to be based on pre-existing data. 

(NB This distinction or separation also raises some interesting questions around whose responsibility it is to safeguard the ethical use of data, but that is a separate discussion). 

The table below summarises the evolution and categorisation of Analytics, over the past 60+ years…. (with thanks to Nitin Aggarwal and Mohamed Sami for their contributions to this overview).

The ESOMAR GMR report published last year, reported that the global turnover of the Analytics sector (USD$44Bn) was almost equal to that of Market Research (USD$46Bn), and the report also projected that by end 2022, Analytics turnover would surpass Market Research by over USD$3Bn: 

While the final figures for 2022 have not yet been published by ESOMAR, another measure of the popularity and likely size of any new discipline, is the amount of inward investment into the sector. 

Cambiar Consulting has been tracking the levels of inward investment to the Research and Analytics for more than 10 years, and the sector remains a popular target. Cambiar’s latest estimates show that nearly $8.9 Bn was invested in our industry in 2022 – only $220 million short of the record total achieved the year before: 

It is also important to note that while inward investment was previously dominated by the USA, the level of investment in Europe is now increasing significantly: 

Of greatest interest however, is now the split between “Research” and “Analytics”. This trend became apparent in (eg) the Indian Research market some 5-10 years ago, and the current global trend demonstrates that investors consider the power of data science and the potential for combining and synthesising different data sources (in order to maximise a company’s potential to gain an advantage in the market), to be a very compelling and attractive investment opportunity: 

However, European investment does differ slightly from the global trend; EU investors place a greater emphasis on UX and CX platforms,meaning that over 50% of investment in the global research (as opposed to analytics) segment is now being sourced out of Europe. Indeed inward investment in this segment is at present higher in Europe than that for analytics – and may reflect a greater emphasis on customer centricity? 

This means that the US is dominating investment into Analytics, and the focus appears to be firmly on the management of Big Data and the need to build Predictive models. With companies owning ever bigger data sets the increasing sophistication of systems available to analyze and decode those data has made predictive analytics a must-have capability, which will only increase with the accelerating development of A.I.. 

While it is clear that Analytics is proving more attractive to investors at this time, it is worth bearing in mind that most analytic service offerings fall under the guidance and control of I.T. or technology experts, whose experience in curating and honoring respondent privacy and ethical guidelines, is very limited. Research practitioners are much more aware of this but have less exposure to the power of synthesising data….. 

Clearly, there is a huge benefit to both parties to collaborate more extensively with each other! 

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