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Market Research: New Opportunity for Service Providers?

Aditya Kishore
7/21/2008
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Media companies have benefited for years from a dual revenue stream, generating revenue from both consumers and advertisers. As service providers become involved in the media value chain they should also be evaluating opportunities in the advertising business. In fact, Heavy Reading is currently involved with a major global study of the advertising opportunity for service providers.

However, there may be an additional, related opportunity for providers in the research field. Today advertisers face a major challenge in measuring media consumption and, therefore, the reach and effectiveness of their advertising investment. This may be less true of the Internet, but TV advertising is still sold on the basis of panel-based estimates requiring a degree of guesswork.

New multi-platform advertising is creating a new challenge for advertisers. Consumers are increasingly exposed to media on the PC, the mobile device, and a growing number of out-of-home digital media such as in-store kiosks and interactive displays. On one hand, the ability to increase customer touch points and cocoon the consumer within their brand is a powerful asset for advertisers. However, measuring exposure to these multiple platforms in a consistent manner is difficult. A senior media buyer I spoke to recently identified measuring and accounting for cross-media exposure as a major challenge.

If service providers could offer granular metrics across multiple platforms on a census basis and then normalize this data across platforms, they would have a truly valuable capability to offer advertisers. Existing DPI tools provide service providers with extremely detailed information, which can then be monetized either via targeted advertising or simply through the sale of the data to market research firms, brand marketers, and advertising agencies. DPI vendor Qosmos is specifically targeting the market research capability for service providers, and has partnered with GfK AG , a major global market research company, and conducted projects for Médiamétrie, France’s largest audience measurement firm.

The primary concern for service providers as they enter this market is consumer privacy. Given the explosive controversy around Net neutrality, and the still evolving legal and regulatory restrictions on network management, service providers would be well advised to move cautiously on these issues.

Still, if a service provider uses unique identifiers or creates other anonymous systems for tracking consumers while generating detailed information for advertisers, there could be a substantial revenue opportunity here. The European Society of Market Research (ESOMAR), a global association of market-research professionals, estimates that the global market-research industry generates more than $20 billion annually.

— Aditya Kishore, Senior Analyst, Heavy Reading

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