[GRIT COMMENTARY] The Changing Advertising Landscape: Where Big Data Is Stepping Up and Marketing Research Is Falling Short
2016 Q1-Q2 GRIT Report commentary by Matt Warta, CEO and Co-Founder of GutCheck, sharing his thoughts on the current state of the market research industry.
Big data has been embraced by the advertising industry over the last several years. With the ability to target consumers with media in more specific ways, the necessity and efficacy of big-data driven advertising has led to billions of spend in this area. So if big data has become bigger, better, and more efficient, why hasn’t the marketing research industry—big data’s other half—followed? The answer may lie in how the media industry has evolved while marketing research methodologies have not.
Prior to the Internet, the media world was dominated by the big three networks—ABC, CBS, and NBC—together representing over 60% of TV viewing. The other dominant advertising formats were newspaper and radio. Back then, media buying was simple; targeting was done at a high level, given media were not specific. A broad consumer audience would be exposed to the media, and according to John Wannamaker, a proponent of advertising and pioneer in marketing, 50% of the advertising at this time worked, but no one knew which 50%.
Today, the big three’s share has fallen to roughly 20% of TV viewing; digital and mobile have gained over $130B in advertising spend—at the expense of newspaper and radio. Why? The ROI is more demonstrable and the new digital formats enable specific consumer targeting through demographics and behavioral data that live in the adtech ecosystem. Further, digital inventory against specific audiences can be bought in real time through programmatic platforms.
This shift and impact can be seen on both the client and supplier side:
- P&G moved 35% of their ad spend into digital channels and saw three to five times the effectiveness compared to traditional media.
- TubeMogul, a leading programmatic ad platform that didn’t exist 10 years ago, will deliver almost $600mm in media spend this year and is growing at a rate not seen at scale in marketing research.
So, why is this important to marketing research? I believe the marketers who are investing their $600B in an increasingly targeted way will force the marketing research industry to leverage methodologies and sampling techniques—consistent with the marketer’s modern approaches.
The challenge for marketing research is that many methodologies leveraged in primary marketing research were developed in an age when network TV dominated and mass markets ruled; these methodologies and their resulting data sets were built for general population audiences. This begs the question: Do these methods need to be modernized for a more targeted world?
There is data in the GRIT report in line with this thesis:
- Big data—the heart of adtech—is top of mind. It’s listed as one of the top five techniques, with 81% of clients/buyers either using it or considering using it.
- Respondents saw the analysis of behavioral data—rather than survey data—as being the most significant disruptor of how they engage with consumers.
It’s hard to imagine a future of marketing research that’s not in line with the increasingly big-data driven advertising industry. It’s time for new research methodologies that can meet the demands and sophistication of the advertising industry in order to leverage big data and create a truly holistic view of the consumer.