8 June 2017 might well go down in history for two reasons.
The first one seems to be obvious if you believe the current polls – the day the UK gave Theresa May a clear mandate to proceed while expressing no confidence in Jeremy Corbyn and Labour as a party of government in its current state.
If not, then the second one will surely be the fact it signalled the death knell of the market research industry in its present form.
Market research, as we know it, was conceived in the 1920s in the US, during the so called "Golden Age of Radio", when radio advertisers began to realise that different people listen to different programmes. They quickly understood that this presented opportunities for companies to sponsor programmes that gave them best access to the sorts of people who might buy their products – hey presto – demographic segmentation was born in a flash.
As the industry developed it became more and more sophisticated with famous luminaries such as George Horace Gallup developing his various sampling and statistical analysis techniques, and Peter Drucker declaring market research to be the quintessence of marketing.
Most estimates put the size of the global market research in excess of $45bn (£35bn).
At its most basic level market research is based on two very simple ideas:
- Intention – asking people what they are going to do (or think or believe as a cypher to this). This even spills over into looking at non-verbal and autonomic signals like body language and brain activity;
- Observation – long used by academic anthropologists – basically studying behaviour over time and using that information to model the future.
But what happens if you suddenly live in a world where:
- People do not tell you, or actively hide, their intention because they are too scared or too embarrassed to do so, lest they get blasted on social media for doing so?
- People start to behave in totally ‘abnormal’ ways – ways which are disruptive and which we have not seen before – so the modelling algorithms cannot make sense of them?
Answer: a really big problem for a multi-billion dollar industry – one which everyone who works in an industry connected with marketing in some way should take note of.
Your trusted marketing tool instantly suffers a cardiac arrest and misses the mark as seen with the 2015 UK general election, Brexit and the 2016 US Election.
What does the market research industry needs to take note of if it is to win back credibility and be resuscitated?
First it needs to accept that there are very variable levels of understanding of probability and statistics among the wider public and how you explain something can be interpreted very differently depending on the audience’s understanding.
Donald Trump’s son said of his father, "While he may be the billionaire from New York, he’s much more of a blue collar guy
A good case in point was the US presidential election where Hillary Clinton was given a 66% chance of being elected versus 33% for Donald Trump in the final odds produced by Nate Silver, the American statistician.
This was reported as a failure and when you look at it in terms of absolute numbers, the difference between 66% and 33% seems pretty broad and you can see how people saw this as a failure. In reality it was 2:1 and when you express it like that the perception of the magnitude of error shrinks significantly.
Second, it needs to put common sense into data, algorithms and statistics.
Trump’s son, Donald Trump Jr, : "While he may be the billionaire from New York, he’s much more of a blue collar guy. He’s a blue collar guy with a big balance sheet". In other words, Trump homed in with laser-like precision on the hopes, fears and beliefs of that mid-western audience, understood how it was for them and cleverly played it back.
He was "human first" in a digital world.
I hope the market research Industry takes note of both of these so we are not writing its obituary on 9 June.
Putting my money where my mouth is, I have deactivated my Facebook account until after 8 June – to get out of my echo chamber bubble so I can hear all sides of the debate, not the sound of my own preconceptions and preferences being played back to me.
Jamie Peate is head of retail planning at McCann Manchester