The Great Reclassification

Key Takeaways [PERSPECTIVE]

The 2026 GRIT Insights Practice Report data describes an insights and analytics market in the middle of a structural reclassification, and the investment story is more nuanced than the familiar shorthand of "tech-led winners versus service-led survivors." 

Tech-led supplier revenue has cooled even as technology spending stays high, suggesting deliberate retrenchment toward defensible infrastructure rather than category dominance. The 101–500 FTE service-led segment has emerged as the clearest growth profile in the supplier landscape, simultaneously expanding revenue, capability, governance, and technology investment. The 500+ FTE segment is in a visible managed transition. The smallest service-led firms carry principal-level expertise but face the sharpest infrastructure constraints. Brand-side analytics budgets are at all-time highs while supplier revenue softens broadly, pointing toward concentration, mix shift, and a redistribution of value capture rather than uniform demand contraction.

Over the next 12–18 months, we expect this reclassification to accelerate through M&A, capability acquisitions, and selective platform builds organized around control points rather than category labels. 

This new decision intelligence infrastructure stack can be visualized as both a workflow and taxonomy: 

The most defensible assets own data substrate, workflow embedding, governance and trust infrastructure, sample integrity, and last-mile decision activation. The least defensible are undifferentiated execution, generic AI claims without proof, and mid-market firms that are neither operationally lean nor strategically scaled. For supplier leadership, the imperative is to clarify the firm's control point and resource it; for investors, to evaluate companies by what they actually do and by what cannot be replicated around them, rather than by the label they wear in the market.

The Great Capital Recalibration of the Insights & Analytics Industry [PERSPECTIVE]

GRIT is built primarily to track the dynamics of the function, methods, and segments that make up the insights and analytics industry, deliberately holding macroeconomic and capital-market factors at arm's length. Complementing GRIT, Gen2 Advisors and Oaklins DeSilva+Phillips have developed this Investor Spotlight to extend the strategic and capital-markets implications of the 2026 data for C-suite leaders and investors making real allocation decisions in the next four to six quarters. The perspective is shaped by ongoing work "in the trenches" on transactions, valuations, capability assessments, and strategic engagements across insights, analytics, marketing technology, and adjacent information businesses.

Where the 2025 Investor Spotlight emphasized a brutal bifurcation between technology winners and service-led survivors, the 2026 data invites a more careful read. The bifurcation has not gone away, but the lines have been redrawn, control points have shifted, and the premium now attaches less to category and more to what a firm structurally controls inside the new value chain. 

As with last year, this is a perspective section rather than data reporting; it is open to debate, it is not investment advice, and we are not investment professionals in the regulated sense. We do believe our combined experience and reading of this year's data warrant serious consideration from anyone deploying capital, evaluating an exit, or designing a strategic plan in this market.

The Capital Environment: From Deployment Pressure to Selectivity [PERSPECTIVE]

Private capital available to deploy into insights, analytics, and adjacent information services remains substantial, and the 2026 environment continues to favor strategic and platform-oriented buyers over financial sponsors looking for clean roll-ups. Accumulated dry powder and elevated holding periods sustain a baseline of activity even when valuations and strategic clarity diverge. 

Capital has also become noticeably more selective. The era in which any "AI-powered" descriptor justified an outsized multiple has ended; buyers are doing harder diligence on revenue durability, gross margin, AI integration depth, governance posture, data ownership, and the realism of stated synergies. Deals are still getting done, but the diligence cycle is longer, gating questions are sharper, and AI claims are treated as hypotheses to be tested rather than facts to be priced in.

The implication for supplier leadership is that the next four to six quarters will see meaningful M&A, but activity will concentrate around assets that can be reclassified into higher-value categories. Strategic acquirers will keep pursuing capability and infrastructure plays where the target supplies a control point: proprietary data, workflow embedding, governance trust, sample provenance, vertical depth, etc… rather than incremental scale. Mid-market service-led firms will face accelerated pressure to declare a platform path or seek a partner who can complete that path on their behalf. Continuation vehicles, minority recapitalizations, and structured equity will play a larger role as sponsors and management teams navigate value gaps traditional exits cannot bridge cleanly.

The Reclassification: Supplier Segments in the 2026 Data [DATA+] 

The most important update from the 2026 data is that the supplier landscape no longer sorts cleanly into "tech-led winners" and "service-led survivors." GRIT's refined segmentation separating tech-led from service-led suppliers and breaking service-led firms into ≤20, 21–100, 101–500, and 500+ FTE bands produces a more textured map. We read the segments this way:

Tech-led suppliers: from category dominance to defensible infrastructure

Tech-led revenue increases sit at a long-term low of 58 percent, but technology spending has been strong for two consecutive years and the offerings mix has shifted away from analytics services toward infrastructure mass-market generative AI cannot easily replicate such as fraud detection, CAPI platforms, online survey infrastructure, and similar substrate. Optimism remains the highest in the industry, with an 81-point company-level optimism-to-pessimism gap. The pattern reads as deliberate retrenchment, not retreat: narrowing offerings to where defensibility is highest and competing pressure from off-the-shelf AI is lowest. The practical investor filter is whether a tech-led target has actually picked a non-commoditizable layer to own, or is recycling generic generative-AI features and hoping the legacy multiple holds.

Service-led 101–500 FTE: the standout segment

This segment is the clearest growth and quality profile in the data. Revenue growth leads service-led peers; technology spending is at a new high with zero decreases; staffing increases have held in the 40-percent range for a third consecutive year. It also leads the industry on governance — the highest rate of formal AI rules at 83 percent and the highest confidence in AI risk minimization at 77 percent — and on method-portfolio expansion. Optimism is among the highest in the data. In plain terms, the segment is simultaneously expanding capability, formalizing governance, investing in technology, and growing revenue. We treat it as the most credible "investment-grade" service-led profile in the report, and mid-market firms that fit this template represent the cleanest platform candidates and acquisition targets in the market.

Service-led 500+ FTE: managed transition, not melt-down

The 500+ FTE service-led segment shows revenue trends essentially flat for three years, stagnant staffing, and a notable mood reset, with company optimism at its lowest point after the sharpest single-year decline outside the pandemic. At the same time, technology spending has reached its highest point since 22A, and the offerings narrative is moving toward consulting, analytics, technology, and synthetic data. We read this as a managed transition: large players actively restructuring fixed cost while attempting to reclassify their revenue mix toward higher-value services. The 22A pattern of a technology surge preceding hiring expansion makes the next 12–18 months a meaningful signal about whether this transition is gaining traction. For investors, the relevant questions are whether the capability evolution is real, whether legacy contracts and labor model still obscure strategic direction, and whether the cap table can absorb the time required to convert investment into revenue. There are real assets inside these organizations; where a discount exists, it often reflects time and execution risk rather than terminal value.

Smaller service-led suppliers (≤20 and 21–100 FTE): expertise meets uneven cash conversion

The 21–100 FTE segment is in clear transition risk: only 54 percent reported revenue increases, down roughly 20 points from the 23A peak, while technology spending has climbed and method portfolios continue to expand. Investment is being made; conversion to revenue has not yet caught up. For sponsors, this is where structured capital (minority equity, growth debt, partnership structures) can be more constructive than control transactions, and where consolidation logic compounds when complementary capability sets are joined under a single operating spine. The ≤20 FTE band is over-represented by owners and principals with deep, often elite expertise; only 37 percent reported revenue increases, only 24 percent have formal AI rules, and optimism is the lowest of any segment. The strategic profile splits between an elite minority defending a true boutique premium through partner ecosystems for infrastructure and AI tooling, and a larger group at risk of becoming subscale specialists without the technology backbone to remain credible. For investors, this is a tuck-in segment for buyers building specialized verticals or geographic depth around an existing platform.

Brand side as a market signal

The brand-side picture is the clearest demand-side signal in the 2026 data. Analytics professionals are expanding research-project budgets to their strongest level in tracked history, with 53 percent reporting increases against 10 percent decreases, and budget composition has shifted upmarket: the share with budgets above $15MM grew from 27 to 40 percent while the share below $1MM fell from 34 to 15 percent since 23A. Staffing, outsourcing, and technology spending are all at new highs. Brand-side researchers, by contrast, show project spending close to stagnant, the first negative reading on staffing, outsourcing in contraction, and a method portfolio consolidating around controllable approaches. Against broadly soft supplier revenue, the most plausible read is that buyer-side analytics spend is concentrating among a smaller set of partners while traditional research spend is held flat, redistributed, or quietly absorbed into analytics, data, and technology budgets.

The AI and Trust Paradox: Investment Theme, Diligence Trap [PERSPECTIVE]

AI remains the dominant lens through which deals are framed, but the 2026 data reveals a paradox that should reshape diligence. Adoption is real and converging: every segment has settled on the same top three agentic-AI use cases of analyzing or modeling data, generating reports and dashboards, and preparing or integrating data even as depth of use diverges sharply by segment. At the same time, AI policy governance is the only one of seven formal decision roles that fails to crack the top three in any segment. The people closest to the workflow AI is absorbing are also people often unlikely to have a say in formally governing AI itself.

Buyer-side confidence is the limiting factor. Only 42 percent of brand-side analytics professionals and 44 percent of brand-side researchers are confident their organizations minimize unacceptable AI misuse risks, the lowest of any segment. Yet that confidence carries real performance signal: among brand-side researchers, 57 percent of the most confident exceeded goals versus 34 percent of the less confident; among analytics professionals, the least confident fall short at three times the rate of the most confident. Formal guidelines and clear expectations roughly double confidence, and both appear necessary. The 101–500 FTE service-led segment leads on both, which is not a coincidence given its stronger performance profile.

For investors, the implication is direct. AI capability is becoming table stakes; trust infrastructure is becoming the premium category. Companies that demonstrate disciplined governance, validated synthetic-data practice, defensible sample provenance, transparent fraud and quality controls, and human checkpoints in the right places are building durable moats. Companies whose AI thesis is a marketing layer over commoditized models are exposed. Two assets making the same AI claim may have meaningfully different terminal values once governance and data substrate are diligenced properly.

Investment Themes from the 2026 Data [PERSPECTIVE]

Several themes emerge from the data that we expect to organize capital deployment in the coming year. They are not mutually exclusive, and the strongest assets typically express more than one.

1. Trust and quality infrastructure as a premium category. Sample integrity, fraud detection, respondent authentication, data provenance, synthetic-data validation, and AI audit trails are moving from operational support into strategic infrastructure. With buyer confidence in AI risk minimization persistently below 50 percent and "data quality, service quality, pricing" the inviolable supplier-selection trinity, this is an underwriteable thesis rather than a slogan. Specialist providers that productize these capabilities in a verifiable form should command premium valuations regardless of legacy category.

2. Decision-orchestration platforms over point tools. The displacement of speed of results by ease of interpreting and communicating results signals a buyer market that values orchestration of evidence into decisions over raw output. The rise of insights operations as the connective tissue of brand-side teams reinforces this. Platforms that integrate research, analytics, supplier management, governance, and activation AND meet workflows where they live should outperform standalone point tools.

3. Verified human data and proprietary substrate. As synthetic and AI-generated content commoditize, verified human-origin data becomes more valuable, not less. Owned panels, proprietary communities, behavioral and passive signals, and validated first-party data are the substrate on which trustworthy synthetic methods rest. Assets with defensible, properly governed access to high-quality human-origin data, especially when paired with workflow technology that exposes that substrate inside customer decisions, are positioned to be reclassified upward.

4. Mid-market consolidation organized around control points. The mid-market service-led segment will continue to face pressure to choose: declare a platform path, declare a specialty path, or accept a partner. The most successful consolidations will be organized around control points like data, workflow, governance, vertical depth, and sample integrity rather than scale or geography alone. Roll-ups that aggregate revenue without resolving the operating-model question are likely to underperform.

5. Vertical and decision-domain specialization. Brand-side analytics leads in pricing, CX, UX, advanced analytics, business intelligence, and partner/channel decisions; brand-side research continues to lead in consumer market insights and brand and advertising work. Suppliers and platforms that align depth to specific high-value decision domains, rather than competing on horizontal breadth, increasingly win renewals and reach premium economics.

6. Marketplaces and activation services. Sample, software, tool, and talent marketplaces are now embedded access infrastructure, and with 66 percent of brand-side analytics professionals expecting automated or agentic systems to mediate most insights purchases, the relevant question is whether a marketplace asset is structurally positioned to be the system agents call, or merely a directory waiting to be replaced by one. In parallel, the durable margin in production-automated workflows migrates to the last mile of synthesis, advisory, scenario design, decision translation, and outcome accountability; assets that productize activation should outperform those competing only on faster delivery.

Outlook: The Next 12–18 Months [PERSPECTIVE]

Reading the 2026 data alongside our ongoing transaction and advisory experience, we expect the following directional patterns over the next four to six quarters.

• M&A activity stays meaningful but increasingly selective. Strategic and PE-backed acquirers continue to pursue capability and infrastructure rather than pure scale, with AI integration depth, governance posture, and data ownership as gating diligence questions. Continuation vehicles, minority recapitalizations, and structured equity play a more visible role as sponsors bridge valuation gaps. AI-washed targets face longer timelines and more frequent re-trades or terminations.

• Capital concentrates around defensible control points. Trust and quality infrastructure (fraud detection, sample provenance, governance tooling, validation frameworks) attracts a disproportionate share of attention and premium multiples. Workflow-embedded platforms with proprietary data substrate outperform horizontal AI platforms competing on generic capabilities, and vertical or decision-domain specialization outperforms generalist positioning.

• Buyer behavior continues to redistribute spend. Analytics-side budgets keep expanding while research-side budgets stay constrained, with corresponding implications for which suppliers grow, which contract, and which are quietly de-listed. Insights operations becomes a more formal buyer-side function, and suppliers that integrate cleanly with it gain a structural advantage. Even early-form agentic procurement raises the stakes on machine-readable reputation, content, and capability descriptions.

• Supplier strategies trifurcate. Scaled platforms with integrated capabilities, defensible data substrate, and demonstrated AI integration extend their lead. Mid-market firms that resolve the operating-model question converge toward the 101–500 FTE "investment-grade" profile visible in the 2026 data. Elite boutiques double down on principal-led expertise, partnered infrastructure, and client intimacy. The undifferentiated middle faces margin pressure, consolidation, or wind-down.

Strategic Imperatives for Supplier Leadership and Investors [PERSPECTIVE]

For supplier leadership

• Pick a control point and resource it. Trust infrastructure, decision orchestration, verified data, vertical depth, and activation are where durable margin lives; pursuing all in parallel under-funds each.

• Make AI claims defensible. Pair every capability statement with measurable governance, validation, and outcome evidence, and move AI policy from informal practice to documented policy with clear ownership.

• Treat governance as a commercial asset. The 2026 data suggests buyers will reward credible governance with trust and budget, and penalize its absence. Lead with it in pursuits, collateral, and onboarding.

• Clarify the operating-model story externally. Large suppliers in particular need a clear, frequently repeated narrative about what labor-intensive execution is being retired and what is replacing it.

• Decide your structural endpoint within roughly 12 months. Mid-market firms should arrive at a deliberate answer to scale, specialize, or partner, and execute against it.

For investors and acquirers

• Underwrite control points, not categories. Evaluate targets by what they structurally control like data substrate, workflow embedding, governance, vertical depth, and activation not by whether they call themselves "tech-led" or "full-service."

• Diligence AI claims as hypotheses. Test for integration depth, governance maturity, data ownership, and incremental margin contribution; discount targets where AI is a marketing layer rather than an operating layer.

• Re-base scoring frameworks. Efficiency, gross profit per employee, AI integration depth, governance posture, retention, and outcome orientation are stronger signals of durable quality than headcount, scale, or category labels.

• Consider non-control structures in the 21–100 FTE capability-building segment, where structured equity and partnership arrangements may outperform control transactions on a risk-adjusted basis.

• Watch the 101–500 FTE service-led segment closely. It is the cleanest pool of platform-grade and platform-plus-capability targets in the market today and will not stay underpriced indefinitely.

• Stress-test buyer-side concentration risk. Expanding analytics budgets alongside softening supplier revenue point to rising concentration; boards should understand whether they are inadvertently reducing strategic optionality.

Conclusion [PERSPECTIVE]

The 2026 GRIT IP Report data describes an industry that has stopped debating whether it is being transformed and started revealing how. Tech-led suppliers are retrenching toward defensible infrastructure. The 101–500 FTE service-led segment has built the most coherent operating profile in the supplier landscape. The largest service-led suppliers are working through a managed transition that will define their next five years. Smaller specialists carry real expertise but face infrastructure constraints. Brand-side analytics is expanding into a more commercially proximate, technology-rich, governance-aware function, while brand-side research is being asked to redefine its leadership claim around judgment, governance, synthesis, and activation rather than execution.

Capital will follow this reclassification. The premium will continue to attach to companies that own a clear control point:  trust infrastructure, verified data, workflow embedding, governance, decision activation, vertical depth and that can demonstrate the operating model behind their AI claims. The discount will apply to undifferentiated execution, generic AI positioning, and firms that have not yet resolved the operating-model question. 

The next 12–18 months will reveal which firms become the next platforms, which become acquisition targets, and which are quietly routed out of the value chain. For supplier C-suites, the decisions made on technology investment, governance posture, M&A positioning, and operating-model clarity over the next two to four quarters will shape the trajectory through 2027–2028. The question is no longer whether to transform; it is whether you lead your transformation or have it led for you.

Data Sources and Caveat

• GRIT 2026 Insights Practice Report (Greenbook), including the Managing Insights, Investing in Insights, Governance & Risks, Mood & Confidence, Selection Criteria, Business Outlook, Evolving Supplier Landscape, and Methods sections.

• Senior Insights Leader synthesis and section analyses developed alongside the 2026 GRIT release.

• Cross-source synthesis of related 2026 industry reporting where directionally consistent with the GRIT data.

• Direct experience of Gen2 Advisors and Oaklins DeSilva+Phillips teams across transactions, capability assessments, valuation work, and strategic engagements in insights, analytics, marketing technology, and adjacent information services.

This commentary represents a synthesis of the 2026 GRIT data and the perspective of experienced advisors. It is not investment advice, and we are not investment professionals in the regulated sense. Individual company circumstances will vary materially. Projections and directional language are estimates based on current conditions and are subject to change with macroeconomic, regulatory, technological, and competitive developments. Readers should treat the views expressed here as a starting point for diligence and strategic dialogue, not as a substitute for them.