Market Analysis – 80141517 – Custom market research

Market Analysis Brief: Custom Market Research (UNSPSC 80141517)

Executive Summary

The global custom market research market is valued at est. $83.5B in 2024 and is projected to grow at a 4.9% CAGR over the next three years, driven by the corporate need for granular consumer insights in a competitive landscape. While demand remains robust, the primary opportunity lies in leveraging AI-powered analytics from emerging suppliers to generate deeper insights faster than traditional methods allow. The most significant threat is technology obsolescence, as suppliers failing to integrate AI and agile methodologies will quickly lose relevance and value.

Market Size & Growth

The Total Addressable Market (TAM) for market research services is substantial and demonstrates steady growth. The increasing availability of big data and the corporate mandate for data-driven decision-making are primary growth catalysts. North America remains the largest market due to the high concentration of multinational corporations and a mature digital advertising ecosystem, followed by Europe and a rapidly expanding Asia-Pacific region.

[Source - ESOMAR Global Market Research Report, Sep 2023]

The three largest geographic markets are: 1. North America (est. 45% share) 2. Europe (est. 28% share) 3. Asia-Pacific (est. 18% share)

Key Drivers & Constraints

1. Demand Driver: Intensifying product/service competition across all industries necessitates deep, customized consumer understanding to inform strategy, product development, and marketing execution.
2. Technology Driver: The proliferation of AI and machine learning enables faster synthesis of unstructured data (e.g., focus group transcripts, social media comments) and predictive modeling, increasing the value of research outputs.
3. Cost Driver: A highly competitive talent market for data scientists, ethnographers, and senior research strategists is driving up labor costs, a primary component of project pricing.
4. Regulatory Constraint: Expanding data privacy legislation (e.g., GDPR, CCPA) increases compliance costs and complexity, particularly for research involving Personally Identifiable Information (PII).
5. Market Constraint: The rise of powerful DIY research platforms (e.g., Qualtrics, SurveyMonkey) is commoditizing basic survey work, pressuring traditional suppliers to focus on high-value, complex analysis.

Competitive Landscape

Barriers to entry are Medium-to-High, predicated on brand reputation, access to proprietary data/panels, significant capital investment in technology platforms, and the ability to attract and retain specialized analytical talent.

⮕ Tier 1 Leaders * NielsenIQ (NIQ): Global leader in consumer behavior measurement, particularly strong in CPG/retail with extensive point-of-sale data panels. * Kantar: Deep expertise in brand equity, advertising effectiveness, and consumer journey mapping, offering strong qualitative and quantitative integration. * Ipsos: A global leader in survey-based research, with vast polling capabilities and specialized divisions for public affairs, marketing, and customer loyalty. * Gartner: Dominant in B2B and technology markets, providing syndicated research, custom analysis, and executive advisory services.

⮕ Emerging/Niche Players * Zappi: An agile insights platform automating concept testing and creative testing, enabling rapid, iterative research sprints. * Suzy: Provides a real-time consumer panel ("always-on" research) for quick-turn surveys and qualitative interviews. * UserTesting: A technology platform focused on capturing customer experience (CX) and user experience (UX) feedback through video-based human insight. * Morning Consult: Leverages high-frequency data collection and advanced analytics to provide insights on brand, economic, and geopolitical trends.

Pricing Mechanics

Pricing is almost exclusively project-based, quoted as a fixed fee derived from a detailed scope of work (SOW). The price build-up is primarily driven by the cost of specialized labor. A typical project cost structure includes: (1) Labor & Expertise (60-70%), covering project management, research design, moderation, analysis, and reporting; (2) Fieldwork & Data Collection (15-25%), including participant incentives, panel access fees, and software licensing; and (3) Overhead & Margin (10-15%).

For complex global studies, pricing shifts to a "cost-plus" model to account for variable in-country fieldwork costs and exchange rate fluctuations. The most volatile cost elements are: 1. Specialized Labor: Wages for data scientists and senior analysts have seen est. +6-8% YoY increases. 2. Participant Incentives: General inflation has pushed the cost of recruiting qualified B2B or niche B2C participants up by est. +10% over the last 18 months. 3. Advanced Analytics Software: Licensing for AI-powered text analytics and predictive modeling platforms has increased by est. +12-15% annually.

Recent Trends & Innovation

• Generative AI Integration (Q1 2023 - Present): Suppliers are rapidly adopting GenAI to automate survey question generation, summarize qualitative transcripts, and create initial drafts of reports, promising to reduce analyst time on low-value tasks.
• Merger & Acquisition Activity (Q3 2023): The merger of NielsenIQ and GfK was completed in July 2023, creating a global giant with complementary strengths in consumer-packaged-goods and durable goods intelligence, signaling ongoing market consolidation.
• Agile Research Adoption (2022 - Present): A definitive shift from long-term, monolithic studies toward shorter, iterative research sprints is underway. This aligns research timelines with agile product development cycles, delivering insights in days or weeks, not months.
• Rise of "Implicit" Measurement (2022 - 2024): Growing investment in non-conscious measurement techniques like eye-tracking, facial coding, and implicit association tests to uncover consumer drivers that are not articulated in traditional surveys or focus groups.

Supplier Landscape

Regional Focus: North Carolina (USA)

Demand for custom market research in North Carolina is robust and projected to outpace the national average, driven by three core sectors: (1) Financial Services in Charlotte (Bank of America, Truist), requiring CX and digital product research; (2) Life Sciences in the Research Triangle Park (RTP), needing clinical trial patient research and physician journey mapping; and (3) a strong base of CPG and retail headquarters. Local capacity is strong, with a rich talent pipeline from Duke, UNC, and NC State universities. The state hosts numerous boutique and mid-size research firms, alongside regional offices of Tier 1 suppliers. North Carolina's competitive labor market and favorable corporate tax structure make it an attractive location for both establishing supplier relationships and potential supplier consolidation.

Risk Outlook

Actionable Sourcing Recommendations

1. Unbundle Strategic and Tactical Spend. Consolidate high-complexity, strategic projects with one or two Tier-1 suppliers to leverage scale. For routine, quick-turn needs (e.g., ad concept tests), qualify and divert spend to 2-3 agile/tech-enabled niche players. This strategy can reduce tactical project costs by est. 15-20% and cut cycle times by over 30%, freeing up budget for more strategic work.

2. Mandate Innovation in Sourcing. For all new projects over $150k, require suppliers to demonstrate their use of AI/ML for synthesizing unstructured data (e.g., open-end survey responses, focus group video). Pilot one project with an emerging AI-native supplier to benchmark their speed and depth of insight against an incumbent. This de-risks innovation adoption and ensures access to next-generation analytical capabilities that drive competitive advantage.