The Near and Long Term Implications of COVID-19 for the MR Industry

By now we all know that the virus is going to have an impact on the research industry.  The questions are around what will the impact be, are there winners and losers, and what will it look like on the “other side.”

Currently, this is all anecdotal.  As the situation on the ground changes multiple times each day, this perspective could be outdated minutes after this is posted.

We know that this has an impact on our society and consumer behavior, possibly greater than any we’ve witnessed in our lifetimes – or at least it has that potential.  If we look back over the past 30 or so years, we’ve seen some wars, some recessions, terrorism, and some health scares.  Some of those changed how we interact with each other and with brands, some didn’t.  I believe that this one will change consumer behavior.

 

Short-Term Revenue Impact on Agencies

• Certain industries are going to all but shut down research activities.  Expect to see the industries that are hit the hardest by the economic fallout to pull back all most the most critical research activities.  Airlines, hotels, food & beverage, automotive, etc. will all be in a position to conserve cash for critical operations.  Any research will be targeted to this time frame and be very cost-effective.
• Other industries are going to boom (and anecdotally – are booming).  Healthcare, In-home entertainment, Gaming, Robotics, Delivery & Logistics, Telecomm & IT, Virtual Work and Productivity, etc.  MR spend appears to be up or at least flat.
• Mixed messages:  CPG appears to be the one area where there is not a lot of consensus.  We know of companies that have cut spending and other that have shifted their spending.
• Methodologies – We have seen both synchronous and asynchronous online qualitative boom.  Communities appear to be booming.  As this situation changes rapidly, quick is better than thorough.
• A “back of the envelope” guess based on the anecdotes and spending patterns is that overall industry spending will be down somewhere around 20% as companies cut back on MR.  The duration of this is completely a guess.  My personal guess is that spending will start to tick back up in 4 months.  There is only the most limited ability to guess at this.  Any other guess is likely as valid.

 

Long-Term Revenue Impact

• Even after we get on that “other side,” consumer behavior is going to change.  What will the nature of entertainment look like? Will education and work life change forever? What about vacations (cruises or international travel)?  And we know that economies are going to change – particularly the dependence on one or two sources in the supply chain.  And finally, we know that the competitive landscape will change as businesses either focus on a more narrow set of products, small businesses either fold or are hurt.
• When we get to the “other side,” companies will need to know what these changes are and how to navigate the new normal.  In order to understand this, clients are going to have to reassess all the foundational knowledge that has helped guide them up to this point.
  • Expect a significant increase in some of the foundational work – Attitude & Usage, Brand Health, Market Landscape and Opportunity studies.
• There will likely be an opportunity for suppliers to not have to compete with some of the industry incumbents that have the traditional norms for acceptance, persuasion, etc.  It is reasonable to think that the norms have less comparative value.  What do norms mean when “normal” is not “normal?”
• Brands will also have to assess if their message is on point on when we’re done with the crisis.  There will be a focus on the more human side of the connection between the brand and the consumer.  Expect a lot more work to be done on the emotional connection between the brand and their customers.

 

I believe that the net result will be a LOT of new insight needs.  Once we get to the other side, this spending will be a boom for the industry.

We’re going to be continuing to engage deeply on this topic; look for information soon on our new Insights Leaders Roundtable, where we will be talking with a panel of industry leaders weekly on navigating the present and future in this rapidly evolving new business situation.