Why Your Market Research Budgets Should Increase, Not Decrease

posted by Laurenc on May 4th, 2009

Campaign Strategies: Why Your Market Research Budgets Should Increase, Not Decrease

In a recent article from eMarketer, the Association of National Advertisers reported a drop in spending for overall media and advertising budgets. The ANA survey 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. Here are some highlights from the article.

“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.

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:

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?
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.
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