With access to new data sources — social analytics and other web data, as well as better access to sales and other customer data — and to huge amounts of inexpensive computing power, lots of people are calling for Big Data to replace traditional market research. We believe that would be a mistake. Big Data analytics should be used in addition – not instead of – traditional market research.
Big Data can be extremely useful for a variety of purposes. It can be useful for operations management, inventory management, and what you’re most interested in, marketing. In fact, Forbes recently reported that Target used their data on shopping patterns to figure out a teen was pregnant before her father knew (oops!). There’s no question that there is tremendous opportunity to build valuable models that drive business performance taking advantage of the wide range of extensive data sources available today. Our industry-leading Marketing Science group is working on developing a variety of approaches to this. We already use a variety of data sources in our Agent-Based Modeling approach to forecast potential scenarios in our Brand Tracking work.
However, there are at least two key areas in which Big Data, by itself, falls short. There are times when one wants to really get a “lay of the land,” which requires representative samples that cannot be provided in an analysis of social network data. A vast amount of social data – possibly from millions of people – does not mean that the general market for a product or service is accurately represented. Additionally, some business problems are best answered with an experiment, another way that survey research can answer some questions better than through an analysis of Big Data.
Don’t get us wrong, Big Data analysis and modeling can be very valuable and we encourage the development of these skills. Big Data can be a valuable tool in a researcher’s toolbox to help answer the question that we at LRW ask ourselves everyday when faced with complex business issues, so what?®. However, it is not the “be all, end all.” It will not – nor should it – replace survey research. It is critical that great so what?® thinkers use survey data, social analytic data, and available spending and behavioral data to figure out what actions companies should take to solve complex marketing and business problems. We shouldn’t allow this “shiny new object” to replace something good. Rather, this shiny new object should be added into the mix of how we attack business problems.
Do you see Big Data differently? What do you think of the opportunities and pitfalls that come with Big Data in solving business issues? Do you think that Big Data means the death of market research?
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Obsolete? No. Less relevant? Yes.
Hello Jason,
Thank you for your comments. We would love to hear your thoughts on why you think market research will become less relevant with the rise of Big Data.
Agree with this article. Big Data is but one of many tools to drive business decison-making. And, it should be part of the toolkit. But, it’s not a silver bullet; custom market research provides the precision and specificity that decision-making typically requires.
Agree as well, but would love to add several points:
1. Big Data is essentially a rear view mirror, in and of itself very useful, but ill suited to answering the kinds of forward focused questions at which primary market research excels.
2. The other issue is that you have little to no context or information about your user. For example, with regard to web scraping tools that aggregate conversation across the open web, there is no real way of knowing what precipitated the remarks or the conversation.
Big Data is clearly helping companies make better decisions and anything that increases the role of consumer feedback in business decisions is a step in the right direction. As with any new business tool, though, it has strengths and weaknesses. By using both primary research and Big Data, companies will make better decisions. For example…
• Primary research lets companies explore alternative realities. When companies need to test situations that have not occurred in the marketplace—like introducing a new product or pricing an existing product higher than the marketplace has seen before—it can rely on survey data for guidance.
• Primary research lets you understand the why behind the what. Simply knowing that sales are declining does not allow you to create a strategy to revive them—just look at Circuit City. Rather, you need to know why sales are declining to address the problem.
I wanted to add another perspective to this dialogue – Columbia’s business school just published a study on “Marketing ROI in the Era of Big Data”. Their conclusion was that while companies are adopting new digital tools and support the use of new data, there is still a great need for a more sophisticated understanding of how to analyze this data and assess marketing ROI. Worth the read!
Links to the original study are below:
http://www4.gsb.columbia.edu/globalbrands/research/brite-nyama-study
http://www.prnewswire.com/news-releases/study-finds-marketers-struggle-with-the-big-data-and-digital-tools-of-today-142312475.html
Market research is a key factor to get advantage over competitors. Market research provides important information to identify and analyze the market need, market size and competition. Market research, which includes social and opinion research, is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making.”-“^
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