There’s a downturn coming. Market conditions are making it harder for both customers and suppliers of market research data, and users are looking round for alternative sources.

Jill Fenton of Fenton Research says: “Although I suspect there will always be an element of reliability risk when using certain free sources from the internet, the current economic downturn may encourage or force researchers to thoroughly investigate and fully assess exactly what’s out there.”

Steve Charlton of Mintel, which recently acquired Snapshots, agrees. “In tough times companies do more research, looking to steer a clear path in their own industry while their peers lose their heads. People are that much more aware of where their money is.”

Better value
His expectations are confirmed by one financial services firm user: “The credit crunch has seen us put a lot more pressure on vendors to improve pricing and the value proposition.”

And a senior researcher at a private equity company reveals: “We were approached by Nielsen earlier in the year as it is now apparently more willing to sell small portions of its data. Similar requests in the past have always been met by a refusal. I assume it’s a reflection of market conditions.”

A senior information professional at a major bank suggests: “The accountants have elbowed their way back to the top table and to them the whizzy über-market research collections that are good value for money if you get an economy of scale going suddenly look like big costs for an ill-defined benefit.”

It sounds like good news both for niche operators and consolidators of ‘free’ research. Alacra Research, Docuticker, FDI.net, ISI Emerging Markets and Reportlinker.com are among the names users cite.

“I sense an enhanced pressure to find the bit of research that will give a new avenue,” says an investment bank information head, “so finding more obscure but niche providers is important. More and more niche services that formerly serviced mostly the industries they were developed for are finding secondary markets among consultants and banking groups.”

She says it’s not only credit analysts who are discovering that reports from ratings agency Moody’s can be useful. The head of information at a major research organisation makes a point of searching for content from the major consultancies: PwC, KPMG, Ernst & Young.

“There will always be a need for niche/specialist research, perhaps particularly during an economic downturn,” explains Fenton. “It could be seen as a savvy long-term investment rather than a short-term excess expense.”

But as the private equity researcher who told IWR about the Nielsen approach adds: “It would be nice to see many more of the niche providers being a) indexed, and b) available to buy by the section from aggregators.”

One obvious showcase for niche products is the British Library’s Business & IP Centre. Staff there say supplier consolidation such as the acquisition of Profound by Marketresearch.com may stoke demand for specialist and bespoke research from clients operating in niche areas.

But they are concerned that many niche providers may be slipping beneath their radar. Also, from the British Library’s perspective, some publishers are so niche and have such inside knowledge that they are not worth buying and their markets are too specialised to move into easily.

The Economist Intelligence Unit is scarcely a niche operator, but it is developing
products that provide deepdrill data services, looking in more depth at industries
such as financial services or IT and telecoms.

Mintel, too, says its customers can now use Snapshots for the key figures, Mintel reports for diving deeper, and its consultancy division for tailored offerings with “responsive and opinionated research information”.

Tougher T&Cs
Some customers, though, see providers adopting a more defensive stance in these
tougher times. One investment bank researcher complains: “The prices charged by some providers per page or even for a statistical table can be extortionate and the
limitations on usage prohibitive. A blanket subscription, with one market research provider offering reports on numerous industries, can help keep costs under control, but it is often the case that an industry comes up which they do not cover, so niche reports have to be bought in addition.”

An investment bank user adds: “We continue to struggle with vendors who tighten product definitions and constrain content, then attempt to sell us other more expensive products with the content we need.” Charlton says: “The client base is still moving away from traditional market researchers towards marketers, which means they want inspiration rather than information,”

So could an economic downturn be terrible news for the market research providers?
“Let’s hope not,” says one user. “When the music starts again, we’ll need our suppliers to help us to accelerate our business.”