Industry Report 2024: Strengths and challenges – Making sense of a changing research sector

Due to continued economic uncertainty, research agencies and clients alike are still operating, to a certain extent, in a state of ‘business unusual’. However, new stakeholders, blended insight and the advent of generative artificial intelligence all represent a mix of challenge and opportunity for the sector, with collaboration and co-creation seen as key to future success. 

The last few years have shown that while times may be turbulent, there remains a strong demand for insight, as challenging markets require decisiveness from organisations.

What’s more, different people within organisations are seeking insight, creating more opportunities for research businesses, according to Tom Smith, chief executive at GWI. “The tougher macroeconomic conditions have undoubtedly had an impact; however, at the same time, we’re seeing more and more roles within businesses – not just expert researchers and analysts – requiring easy access to consumer insights,” he says. “In a tough market, brands don’t stop looking to understand their consumers. In fact, they need to understand their customers and changes to their behaviours and outlooks with even more depth. Of course, they want to do it in a more cost-effective and efficient way, but hitting the right note with consumers is never more important than when spending is being so heavily scrutinised.”

Smith adds: “I strongly believe that the winners will be those that invest in user centricity that allows consumer and market research to be a normal and valuable part of people’s workflows.”

A key driver of GWI’s growth has been that brands need “a global view of digital consumers at speed,” says Smith, including a demand for global data on a wide range of markets. GWI has continued to increase its footprint to include local markets that are not often well represented, with Croatia being one of the most recent additions.

Camille Nicita, global chief executive at Human8 (formerly InSites Consulting), hints at the shift towards a broadened insights scope, noting that the business is increasingly taking extra steps to understand the needs of other stakeholders. The stakeholders exist beyond insight teams within a client business – something she says “creates higher potential for insights to drive true momentum in the market”.

Those stakeholders vary depending on the business, but, says Nicita, often represent marketing, strategy, innovation and experience design. To address this, Human8 has employed people from outside of the insights industry – business and brand strategists, designers and human-centred innovation people.

While Nicita says Human8 has experienced an increased demand for insights and guidance to “navigate uncertainties and changes,” on the other hand, she says: “There’s also a share of clients facing significant budget constraints which we’ve, for instance, seen reflected in clients attempting to centralise insight services with one partner to negotiate more effectively on budget or even in-source some of the services that agencies provide. As a global business, we’re in a strong position to respond to market volatility with our portfolio.”

For Firefish, integrated work combining human insight, cultural strategy and data has been popular in the last year, according to Martyn Hill, business development director. The business has undertaken ‘masterclasses’ within its various internal units across qual, quant, analytics and cultural strategy, with the aim of understanding more about individual specialist teams, in order to tell better integrated stories from the data. Hill says: “We like to say that ‘data informs but stories inspire’, and that has been ever-more important in a world where more data than ever before is being produced.”

Firefish is also having regular conversations with clients to gauge how they are feeling – and, with AI making an impression – how they are coping in what Hill terms a “post-ChatGPT world”. He says: “It appears many are just trying to make sense of it all, alongside bigger changes in regulations from consumer duty in financial services, to a cookieless and privacy-concerned world for our tech clients. It seems like it has been a turbulent time for everyone, but I expect that to settle down a little in 2024.”

Walnut Unlimited managing director Jane Rudling also points to an increase in “blended methodologies”. This could include, for example, “combining behavioural science with qual and neuroscience to give a deeper understanding of the business problem and how to solve it”. Or having the data science team explain what is happening, and then the qual team explain why – “this works really well for our hybrid segmentations,” says Rudling.

Business conditions in the sector were “erratic” in 2023, with lots of ups and downs, says Rudling. An unpredictable wider business landscape presents both challenges and opportunities: “Our clients are navigating a difficult economic climate, supply chain issues, upheaval due to the continuing war in Ukraine and the recent turmoil in the Middle East. Our clients have decisions to make, and they need insight to help support those decisions,” says Rudling. “It can make it very hard to plan for the year ahead, but we can be sure that our clients will need insight to guide their decision-making. In an uncertain world, insight is more important than ever.”

At Strat7, growth has been significantly driven by international expansion, particularly in the US market. Across all regions, says chief executive Barrie Brien, the group’s agencies have made “concerted efforts” to get closer to their clients to help them adapt to ever-changing markets.

Brien adds: “Central to this has been bringing in additional capabilities from across the network to address clients’ specific business challenges. This has been a core strategy as we appreciate the strengths and depth of our relationships are key.”

Brien agrees 2023 has been challenging, with market research budgets tightening. But he adds: “Viewing insight as optional is imprudent. Rapid changes in consumer needs and behaviours, driven by factors like inflation, climate, and technology, demand proactive corporate leadership for sustained growth. Central to this is placing customers at the core of digital transformation, using data infrastructures to monitor and respond to evolving needs. And that requires investment in next-generation data collection and analytics.”

The client view

Speaking with client-side insights professionals gives an appreciation of the other side of the coin. So firstly, what has worked well for clients in the past year? Seema Hope, who joined The Economist as global head of consumer research at the start of 2023, says working closely with “an excellent data team” has worked well, for both teams: “Our research enriches the data, and the data enriches our research,” she says.

Another big focus, says Hope, has been integrating principles of user experience and market research across strategic projects, while establishing processes to ensure the team “feels confident in understanding how different methodologies can work together”.

In the face of continued uncertainty, for Mattel, 2023 led to a stronger focus on shoppers, says Michael Swaisland, head of insight and analytics EMEA. The business has placed a firmer emphasis on mindsets, drivers and behaviours, and “thinking about how to get messaging through in a very value-conscious environment,” he says.

What is the key challenge for client insight teams as we enter 2024? Nick North, director of audiences at the BBC, says: “In an increasingly complex and data-noisy world, we need to make sure the business is led by the most valuable insight ‘signals’. Rarely are decisions now founded on single data points. This means synthesising, integrating and making sense of multiple data sources to deliver insight. Turning that insight into action requires more effective communication, to cut through the noise. Where there’s both a challenge and an opportunity is how we make best use of new technologies, new capabilities afforded by GPTs, for example, to transform the insight generation and communication process.”

The ongoing cost-of-living crisis, and its impact on consumers, can’t be underestimated, says Claire Rainey, head of insight, Virgin Media O2. “It is a very tough trading climate for many industries, and this has led to changes in consumer habits and choices. The wealth gap in the UK society feels wider than ever, and as this grows and needs diversify, we need to meet consumers across a growing spectrum of requirements,” she says.

The question of impact continues to be a key challenge for insights teams, says Swaisland. “In any business, the challenge will always be, are we driving enough impact? Are we being provocative enough to shape the narrative? Are we helping teams to pivot in time? Are we calling out better ways to focus limited resources? Are we ensuring that actions are consumer and society centric, rather than internally focused and biased? We need to be continually breaking through at all levels within the organisation, with a strong point of view, and even stronger determination to be heard.”

One of the biggest challenges – and opportunities – across the board for clients and suppliers is, of course, artificial intelligence. Since the launch of OpenAI’s ChatGPT in November 2023, research businesses have been experimenting with how to apply generative AI to their work, and most of the contributors to this report mentioned it as a key challenge for the sector to navigate in the year ahead.

“A lot of conversation involves AI or an element of automation,” says Hope. “The challenge will come from really understanding the short and medium-term impact of AI, how to talk confidently about AI (now) and make time for the learning that will be required.”

Diana Mitkov, senior insight manager at De Beers, says: “In this space, it will be essential to understand how best to use the new tools and methods without over-relying on them, but also without missing out on positive developments. So, staying abreast of this fast-moving area will be a must.”

Many clients want their agencies to act as partners to the business to help them navigate these challenges. Mitkov says the most valuable qualities in an insights supplier are willingness and “capability to understand my business and to work alongside me as insight partners, rather than just data providers”. This requires a high level of involvement and curiosity about the client business and industry, she adds.

Rainey says she looks for insight suppliers who are “very clear, concise and responsive” and adds: “I appreciate suppliers who are willing to challenge and build on ideas throughout. The process should be joint and co-creative and not a passing of tasks from one party to another. It should feel like an extension of the team.”

The threat of reduced research budgets looms over clients in 2024, with many facing challenges over the value the insight will have – and what the return on investment will be. However, notes Rainey: “It is our job to be clearer than ever on this and demonstrate the returns our insights drive.”

This article was first published in the Research Live Industry Report 2024. You can download the report by signing in here.