Technology and Market Research through Crowdsourcing
Market research and competitive analysis is a large industry in the US and globally with recent studies estimating its value at around $39B annually. The challenge with traditionally prepared market research reports is an inability to sufficiently customize the work while keeping the final product cost efficient for both the client and the firm. However, organizations are often looking at specific market segments and they would benefit from a survey of a smaller sample size and a deeper emphasis on particular characteristics, rather than a broad survey of the entire market. For instance, cancer research spans a wide range of specific diseases (e.g., breast, prostate, etc.), and treatment methods such as chemotherapy, radiotherapy, or surgery. In addition, some research focuses only on diagnosis or prevention rather than treatment. Therefore, looking at the size of this market and the overall global funding that this type of research receives every year may not deliver the value that a research institute could derive from a highly targeted report.
Customizing market research reports makes them more valuable, but the usefulness is limited to a smaller number of organizations with that specific need. Therefore, the cost of obtaining such a customized report could be excessively high for both firms and clients, given the limited number of organizations interested in purchasing such a specialized report. As a result, in many cases, organizations are required to make decisions based on broader reports and move forward with limited visibility.
By leveraging the power of a large network of subject matter experts to solve this expensive and often complicated problem, crowdsourcing has enabled us to decrease the cost of in depth customized market research reports to a more affordable price point.
Crowdsourcing is a problem solving technique where the combined knowledge of a crowd, or community of experts, is used to solve a problem or draw a conclusion about an issue. While it is an innovative new approach and a product of Internet era, crowdsourcing has been embraced and is being adapted even by the governments on a larger scale. This week, the White House announced a number of Presidential Innovation Fellows for NASA, the Department of State, the United States Patent and Trademark Office (USPTO), the Department of Energy, and others. The USPTO fellow will be working specifically on Crowdsourcing Initiatives.
Market research studies are usually of two kinds: (a) qualitative studies such as examinations of similar or competing products in a specific market sector, or (b) quantitative studies such as market sizing or estimating a growth rate for a specific sector. For qualitative studies, the solution resides in publicly available information that is usually difficult to find and organize, even for firms that specialize in market research. In these situations crowdsourcing can be a very effective tool for gathering and then leveraging information spread across a variety of individuals. Some well-known examples of similar crowd-based applications include Wikipedia and Quora (question and answer platform). For quantitative studies, surveying a large network of subject matter experts will provide a mix of qualified responses, and the average and/or median of the responses will provide a much better estimate. We have already seen examples of this type of crowdsourced analysis in finance where real earnings and revenue numbers fall very close to the average of what was estimated by different financial analysts.
Scaling this model to cover all types of market research is not an easy task, as a large knowledge network is needed to support a full range of qualitative and quantitative questions. Patexia has used its extensive community of subject matter experts to craft solutions based on crowdsourcing for market research and competitive intelligence studies.