Tough times ahead for market research aggregators

Even though some users may have been surprised by the £502m paid by Informa for analyst and forecaster Datamonitor , business experts generally think the book and journals publisher has got itself a bargain. But will the acquisition reduce supplier competition and user choice in market research?

“Informa has rightly and successfully adopted a laissez-faire approach to all its acquisitions to date, allowing them to continue to run as separate entities in their respective niche markets,” says one information professional at a global financial services company. “The acquisition adds flavour to its soup and, more valuably, a huge client database.”

“As one company is bought by another, so another will appear,” says Ronnie McBryde, head of research at market research publisher Mintel . “When the Henley Centre stopped producing reports, the Future Foundation filled that gap. Xtreme bought Digireels, and Kynelle appeared.”

McBryde believes there is room for all players. As former group information director at advertising agency Bartle Bogle Hegarty , he regularly subscribed to more than 40 research companies. “Ensuring the company was aware of what else was out on the market meant that I didn’t turn down many cold-call sellers.”

Quantity immaterial

However many or few players there are, quality will remain unaffected, maintains David Gudgin of market researcher Euromonitor . “Our clients demand the highest quality data. It’s not down to competition in the space; it’s down to necessity. Multibillion-dollar decisions are being made on the basis of our data all the time.”

But it may not all be plain sailing for the sector. Customers are becoming more discerning, frequently opting for specialist niche services – like IGD , for example, a food and grocery analyst that is a registered charity, and not a commercial concern at all.

“My view is that the demand for reports produced by generic research houses is in decline,” says the head of information at one financial services company. “Quality and data validity are always in doubt. Our user base is increasingly sophisticated and has heightened expectations of the information we supply.”

A colleague at another major financial services firm agrees. “For market research where the aggregators don’t cover a sufficiently wide variety of data or have it quickly enough to meet clients’ needs, info pros have to go hunting and establish new routes to the good stuff. The middleman is getting squeezed out because the web can do that role more cheaply.”

Independent information professionals are taking the same route. “I would go to a specialist market research provider or industry expert if I was looking for recent thinking and real insight into an industry or topic,” says business information specialist Jill Fenton, of Fenton Research . “More generic sources provide good overview content but are often limited on the real insightful stuff, probably because the specialists provide it directly.”

But how easily findable are the specialists? “One of the things I am increasingly aware of is the huge range of specialist market research players who may never appear on the aggregators, and also the huge range of data that is available from brand monitors such as Taylor Nelson Sofres and Nielsen ,” says one information services procurement specialist at a global investment bank. “It can be quite difficult to understand what is actually available from these companies, who tend to be used to talking to fellow industry specialists and not generalists such as info pros or bankers.”

Easy to find

Euromonitor ’s Gudgin acknowledges the problem. “There is no point in creating research data if no one can find it,” he says. Enter therefore a newer generation of open-format web-based market research information services.

Set up in 2001, MarketResearch.com offers more than 110,000 reports from 550 market research publishers. Last April it acquired its older rival, Thomson Business Intelligence Market Research, better known as Profound. With its closed-platform premium market research procurement service, advanced search capabilities and comprehensive taxonomy, TBI Market Research appears to complement MarketResearch.com’s existing offerings well.

But, if some users are to be believed, the acquisition may have come in the nick of time for TBI. “I can see the aggregator [using Profound as the example] dying out, as content on Profound is either old, not relevant or the original source provides access to sections sooner than the data appears on Profound,” says one.

Meanwhile the jury is still out on Informa’s latest acquisition. “We will obviously have to wait and see what the new owners have planned,” says Gudgin. “It’s good to see the value of market research being recognised.”

And a parting shot from one global investment bank user: “I hope Informa does its due diligence and is sure of what it is buying.”

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