meaning: The Macer View/4

	The Macer View
	Comment and analysis from Tim Macer Number 4, July 2003

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The Macer View

Less than one percent: MR's investment in its technology

Less than one per cent. Five laden words in market research. As an absolute value, it is brings to mind the odd few, the atypical. Technology, we occasionally hear the captains of market research tell us, is vital to the industry: it definitely is not unimportant or atypical.

How shocking, then, to discover this tiny amount is what research companies spend on specialist research software. The figure comes from a study my firm carried out in May. To be precise, 0.89% is the average spend on software as a proportion of revenues from quantitative research, from a sample of 36 companies of all sizes in five different countries.

Though our sample was relatively small, the numbers do seem to stand up against other evidence gleaned over the years. As a proportion of each company’s overall turnover the mean average is a mere 0.6%, and the medians, which may give a fairer picture, are half a percent or less.

By any measure, it is small change. Technology’s potential to save time and cost is still barely realised across the research industry and is it any surprise? Look inside many MR firms and you will find a consistent picture that, in order to get the numbers out, a small army of engineers gets mobilised.

Our study also counted this army, from IT to DP specialists, system developers to database administrators. Using some fairly conservative estimates of salary and overhead costs, the spend on technical headcount is eighteen times greater, at 11.2%.

Technology suppliers are struggling, and report that agencies are just not buying any more. In agencies, potential customers complain that “there is nothing really new out there”. In some ways, it is true. Developers have had to invest in re-engineering products to work on databases, in Java, across the Internet and more, yet the improvements in fundamental capabilities are modest.

The big technical problems that agencies and research buyers face still seem intractable, like moving to smart reporting systems that really provide a viable alternative to piles of cross-tabs, or how to engineer out design and set-up errors from research surveys, or how to get more use out of vast reserves of inaccessible back-data.

But it won’t happen if research providers pay such small amounts in licence fees, and even then grumble about how much they are paying. I can hear the gentle whoosh of software developers falling out of their chairs as they hear me make a case for upping their fees, but something has to change. Chronic under funding of the technical infrastructure killed off many of our industries in the 1970s and 1980s. There is a real danger that market research could become a casualty of its own technological parsimony.