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How market research will ride the AI wave

21 March, 2024 | 
Pureprofile 

Originally published: Mumbrella, 21 March 2024

With a bolder, brighter economy and rapid technological advancement, Martin Filz – CEO, Pureprofile anticipates three market research progressions we might see this year.

While Australia narrowly maneuvered away from a recession in 2023, economic indicators have begun to take a positive turn.

Consumer confidence just hit a 20-month high thanks to cooling inflation and incoming tax cuts, and high levels of construction activity with a strong job market have helped South Australia’s economy come out on top. Consumers seem to be cautiously optimistic with spending patterns starting to catch up; RMIT University estimated that Swifties pumped over $558 million into the economy during the Australian leg of the Eras tour.

AI is increasingly being incorporated into business processes, opening up new and exciting possibilities. GenAI continues to make headlines, most recently with high-quality video generation. The Federal Government also announced a new Artificial Intelligence Expert Group to help guide the future of safe and responsible AI in Australia.

As with many industries, AI and machine learning are playing a pivotal role in market research, refining data analytics and decision-making processes while enhancing privacy and sample quality. Additionally, the integration of emerging technologies, such as edge computing, promises to boost real-time data processing capabilities. The Productivity Commission believes that AI can significantly improve the productivity of the services sector after “adjustment and experimentation”.

With a bolder, brighter economy and rapid technological advancement, we anticipate three market research progressions we might see this year.

A potential for increased M&A activity

As more market research companies look to gain an advantage in the technology race, we may see feverish M&A activity within the sector. Late last year, Gartner forecast that a focus on AI would lead to a wave of deal activity in 2024. The retail sector certainly saw plenty of deals in 2023, with overseas acquisitions of leading Australian brands including Zimmermann, Bondi Sands, Aesop, David Jones and Akubra. These acquisitions underscore an appetite for strategic expansion and market consolidation, setting the stage for a similar trend in other sectors.

The ANZ market research sector has already started seeing the buds of this trend. Last July France-headquartered Ipsos bought the insights business of Big Village Australia (formerly Engine). New Zealand-based brand tracking platform Tracksuit also saw keen VC interest in its technology.

Possible new entrants to the research industry

The focus on new AI and GenAI tools is fuelling innovation and bringing on a wave of new martech entrants. 2023 saw martech startups such as Mutinex and MagicBrief raising tens of millions in capital. The merging of quantitative and qualitative systems will result in new solutions, with technology companies offering to deliver faster, more automated and insightful tools. Consulting and professional service companies will also be using technology to deliver insights.

While automated insights may hit a spike, there will also be an increasing need for people with a creative mindset, something AI isn’t (yet) capable of. This means upskilling researchers will become a priority; ensuring that they are familiar with new technologies and harnessing their capabilities with out-of-the-box thinking for new use applications.

Customers emerging as winners

With automated insights breeding more market research options, companies – and retailers specifically – will benefit from deeper insights.  Brands and marketers will have a much wider choice of insights providers and platforms, and faster, powerful delivery. Market research will continue to see democratisation through DIY platforms making them more accessible to smaller businesses. 

Previous research conducted with the IAB has shown us that consumers are very receptive to increased personalisation and customisation in marketing. Personalisation, added value and relevance are increasingly the expectation, not just the nice-to-have. With greater access to richer research, businesses will be able to customise their marketing and targeting more seamlessly, benefiting end customers who presently, are on the constant lookout for cost-saving measures. 

This is a pivotal time for the market research industry as innovation and shifting consumer behaviours put us in uncharted, exciting territory. However, some caution should remain. The greater use of data also increases the potential for data privacy breaches, so security must be top of the agenda when dealing with sensitive information. This is not an insurmountable issue, and the industry needs to be proactive about shaping a landscape where innovation and responsibility go hand in hand. 

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