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Why Now Is Not a Good Time to Slash Your Market Research Budget - eMarketer

Why Now Is Not a Good Time to Slash Your Market Research Budget - eMarketer.

Why Now Is Not a Good Time to Slash Your Market Research Budget

MARCH 31, 2009

Geoff Ramsey CEO eMarketer

Let me try to make the case for why it’s in your best interests to preserve, or even increase, budgets for market research during these trying times.

First, what are marketers doing with their market research budgets in this inhospitable economic climate? It is not a pretty picture.

The latest surveys conducted among marketers point to a precipitous drop in spending for overall media and advertising budgets. As one example, a survey from the Association of National Advertisers (ANA) indicates that 77% of US advertisers are cutting their media spending this year. For many, those cuts will lead to a commensurate drop in market research funding, since the two items are usually found together under the same umbrella marketing budget.

“The reality today is that we are all driving in fog, and no one really knows if the fog will lift in one year, two years or more.”

—David Jones, global CEO, Euro RSCG, in Advertising Age, February 16, 2009

According to a global study conducted by AdMedia Partners, only 27% of marketers planned to increase their spending on market research this year, while an almost equal 23% said they were expecting a decrease.

With another 50% of respondents in the study planning to hold the line on spending, the net gain comes to a scant 4% of marketers.

Similarly, a Duke University Fuqua School of Business survey commissioned by the American Marketing Association (AMA) found that US marketers planned to increase their spending on “marketing research and intelligence” by only 1.8%.

That increase is actually an average among B2B and B2C marketers. While B2B marketers are expecting a modest 3.7% bump, their B2C counterparts are looking at a 2.9% cut in market research spending.

Even those specifically responsible for buying market research are looking at cuts during this troubled year.

In the “2009 Annual Survey of Market Research Professionals,” from MarketResearchCareers.com, buyers expected their research budgets to be cut by an average of 9.5%, reversing a 20-year trend of spending increases. They anticipated use of syndicated research to fall from 81% in 2008 to 75% in 2009.

So the results, in terms of budgets, are somewhat mixed. Some organizations are seeing this time as an opportunity to increase spending, while others are looking to cut.

Here are three reasons why you might want to put yourself in the “increase” (or at least “maintain”) market research camp:

1. With the economy clouding the future, why throw away your flashlight when it could shine on intriguing consumer insights, hot technology trends and market opportunities?

   The market is bleak out there, yet there are always opportunities lurking—if you have the tools to find them. Market research can often help you uncover little gems of insight that, when acted on, can connect you more closely with your customer or reveal new markets entirely.

   As cited in the March 23 issue of BusinessWeek, MasterCard learned from market research that certain consumer technology adoption trends were occurring in emerging countries, and these were creating new and exciting growth opportunities for the industry—and for MasterCard in particular.

   Other marketers, somewhat surprisingly, are choosing this year to aggressively boost their spending in social media marketing—because a wealth of research data from numerous sources is making a very compelling business argument for them to do so.

   Besides, when you have to watch every dollar you spend on marketing, don’t you want to be fully informed as to how best to spend that dollar?
   
   

2. Market research can help you preserve budgets, projects and even people.

   One of our clients in the pharmaceutical industry shared with me a fascinating story. When she and her team were threatened with nasty budget cuts that would decimate their spending on new media campaigns, as well as eliminate some of her core staff, she went straight to work. Using her subscription access to eMarketer, she was able to build a solid, data-supported case for upper management that ultimately convinced them to restore her budgets, including her staff.

   In tough times, you need all the data artillery you can get your hands on, whether you get it from us or from one of the many other solid, dependable research sources out there. Market research data and insights—when used properly—can grease the wheels of corporate acceptance for proposals, presentations, recommendations, new business pitches and even entire marketing budgets.
   
   

3. Prepare for better times ahead.

   You are not alone if your media and marketing budgets have been hacked into unrecognizable shapes. But why not use this temporary cutback as an opportunity to invest in the future? By immersing yourself and your team in market research data, focusing on up-and-coming trends and emerging consumer insights, you will be at the ready with “go-to-market” action plans when the budget ax is finally lifted.

   That time may be coming sooner than you expect.

Here at eMarketer, we practice what we preach. We are actively reading, absorbing and applying data insights from our market reports, articles, interviews and videos to constantly improve the content and service we provide for our clients.

“In these tough economic times, marketers need to wring every last dollar of efficiency and effectiveness out of their spending. That’s why market research is more important than ever.”

—Gian Fulgoni, Chairman, comScore

Alternative Newspapers & Their Sites Read By Surburbia

MediaPost

A new report issued by The Media Audit reveals that 43.8 million U.S. adults have read an alternative newspaper or visited an alternative newspaper's website in the past 30 days. The study, which compared past four issue readership among 117 papers across 88 U.S. Markets, reveals an average readership of 374,296 adults in 2007 compared to 362,938 in the previous year, a 3% increase. Further, the average number of unique monthly website visitors among the 117 papers is 113,469 adults in 2007 compared to 106,139 in 2006, a nearly 7% increase.

Bob Jordan, President of International Demographics, observes ".... one of the benefits for alternative newsweeklies is the opportunity to reach outside the city where papers are not as readily available... there are a lot of people who come into the city from the suburbs for entertainment and these alternative newspaper websites are positioned as one of the best choices for restaurant, live music, and concert recommendations."

Among the highest reaching alternative newsweekly in the country, Madison Wisconsin's Isthmus has moved to the top of the list, reaching 37.4% of all adults in Madison, compared to 34.6% a year earlier. 

• Spokane Washington's Inlander ranks second in the study, reaching 36.1% of the market
• San Diego Reader (35.6% reach)
• Tucson Weekly (33.2% reach)
• New Haven, Connecticut's New Haven Advocate (32.4% reach)
• Columbia, South Carolina's Free Times (30.6% reach)
• Eugene Weekly (29.7% reach)
• Reno News and Review (29.2% reach)
• Madison, Wisconsin's The Onion (28.7% reach)
• The Austin Chronicle (28.6% reach)

Total reach is based on past four issue readership of the newspaper combined with past 30 day website visitors.

Alternative newspaper websites with the highest market penetration include: Madison Wisconsin's Isthmus (13.5% of the market), then:

• The Austin Chronicle (11.4%)
• Charleston, Carolina's Charleston City Paper (10.3%)
• The New Haven Advocate (10%)
• The Memphis Flyer (9.5%)
• Minneapolis City Pages (9.2%)
• Madison, Wisconsin's The Onion (8.9%)
• New Orleans' Gambit Newsweekly (8.8%)
• Syracuse New Times (8.3%)
• Washington D.C.'s The Onion (8.2%)

Among the top 10 highest reaching alternatives based on persons 18+ is New York's Village Voice with over 2.4 million readers across the New York City metro area who read the paper or visited their web site, followed by:

• Time Out New York (1.8 million readers)
• L.A. Weekly (1.7 million readers)
• The Onion in New York City (1.3 million readers)
• Orange County Weekly (1.1 million readers)

More information from this report is available from The Media Audit here.

Quantcast: The Next Generation Of Media Research

Posted April 29th, 2008 by David L. Smith,

While not a brand-new offering, Quantcast represents the next generation of media research and is worth checking out. I have written about Quantcast in passing over the last year or two (full disclosure, I did some early consulting for them and have a small number of stock options), and I find that many agency-side and publisher-side folks that I talk to are unfamiliar with their services. Quantcast merits attention and today, I’ll tell you why.

They call themselves “The World’s Only Open Internet Ratings Service.” The big departure from history for Quantcast is that they are a “census-based” service rather than sample-based. What does this mean? It means that they are able to go much deeper in number of sites rated than the commercial services such as comScore and NetRatings. In fact, they “see” over 20 million sites as compared to the low 10s of thousands for other services. In the digital world where audiences may be small and we still want to slice and dice them for targeting, census-based sources may be the only way to go.

In a Google-like move, Quantcast at this point is a free service to all, both for publishers and for agency planners and buyers. More about that below.

Quantcast starts with a methodology similar to other rating services in the fielding of a panel with several million self selected respondents. They then use statistical techniques to project to the total U.S. That’s when it gets interesting...

Read more:  Quantcast: The Next Generation Of Media Research

Net Viewers Watching--But Not TV

Net Viewers Watching--But Not TV
Media Daily News

by Wayne Friedman, Thursday, Dec 6, 2007 8:45 AM ET

ALMOST TWO-THIRDS OF INTERNET USERS watch at least some video online each week--but that probably isn't a TV episode.   

News and user-generated content are the most popular categories, followed by movie trailers and music videos. TV shows come in at fifth place...

Read more: Net Viewers Watching--But Not TV

Advertising on internet soars as world follows British lead

From The Times

April 3, 2007

Advertising on internet soars as world follows British lead

Rebecca O’Connor

The internet will overtake radio by next year and become the world’s fourth-largest advertising medium, a year earlier than forecast.

Global spending on internet advertising increased from $18.7 billion in 2005 to $24.9 billion (£12.6 billion) last year, according to ZenithOptimedia, the media-buying agency.

The Middle East and Asia are driving a boom in global advertising spending. Zenith predicted a spike of 7.7 per cent in spending in Asia in the run-up to the 2008 Olympic Games in Beijing.

In the Middle East and Eastern Europe, advertising spending is growing faster than in North America and Western Europe, which are “maturing rapidly” as advertising markets, Zenith said.

Advertising spending in the Middle East increased by 22.4 per cent between 2005 and 2006, compared with growth of 5.2 per cent in America and 4 per cent in Western Europe. Zenith attributed the huge percentage share in the Middle East to the growth in local economies and high oil prices.

In addition to the Olympics, the US presidential election and the European football championship in Austria and Switzerland next year will be the biggest contributors to overall growth during the next two years. However, Zenith noted, the market should brace itself for a fall in revenues after those big events end.

The global momentum towards online advertising reflects trends in the British market, which has received a boost from the uptake of high-speed internet access.

Although spending on traditional media, such as magazines and radio, has been falling in the UK, more than £2 billion was spent on internet advertising in 2006. Online advertising accounts for 11.4 per cent of total advertising revenue in Britain, almost double the global average of 5.8 per cent and above the 7.8 per cent share of advertising expenditure in the US.

Guy Phillipson, the chief executive of the Internet Advertising Bureau, a British trade body, said: “The UK is blazing a trail for the rest of the world. We have been enjoying stellar growth mainly because broadband connections are getting faster and cheaper.”

Mr Phillipson added that the shift towards online advertising was likely to grow as companies come to regard it as less risky and more transparent. Most companies pay on a “per click” basis for search-based advertising, which means that they pay only for the leads generated by the advertisement.

Search engines are the fastest-growing form of online advertising and companies bid to be associated with keywords that are used in searches. The use of annoying pop-ups is declining, but new forms of online advertising, such as video streaming and expanding banners, are becoming more widely used. Behavioural targeting, in which advertisers follow consumers’ internet use, is another growth area.

Despite fears that television advertising was heading for a fall at the end of 2006, Zenith said it had recovered and should be only 0.2 percentage points lower in 2009 than in 2005.

Cinema advertising, especially in the US, is also forecast to grow slightly. Zenith expects no further growth from US newspaper advertising this year and has revised its forecast for magazine growth downwards, describing print performance in America as “disappointing”.

Zenith said the entire UK advertising market was recovering from last year’s stagnation.