Market research can be an invaluable tool to help companies evaluate their success and failures and assist in strategic planning.
While spending on market research has been growing globally, the Arab world still lags far behind the rest of the world, including other emerging markets. Emirates Business sat down with Eduoard Monin, Chairman and CEO of Ipsos Middle East and North Africa, to discuss the industry and recent trends.
What is the state of market research in the Arab world today?
Market research is an old phenomenon and it started with conducting opinion polls. However, economic and social developments in recent years in the Arab world have motivated market research to follow suit.
The region’s growth percentage remains very low compared to other regions. But things are improving, though slowly. The world has changed and the Arab world has been undergoing interesting economic and social trends.
Nothing can be done nowadays without research. There are two types of information: internal where it is about offices and companies’ information, and external where it is about conducting research as part of the development of the market.
How much is spent on market research around the world and what are the expectations for 2008 and the coming years?
During the last four years, the total billing of media research in the world was $21.9 billion (Dh80.4bn) in 2004, $23.4bn in 2005, $24.6bn in 2006 and $27bn in 2007. The rate is expected to grow at seven per cent worldwide for 2008.
The Middle East, North Africa and the rest of Africa is 14.5 per cent. Spending wise, Europe is 44 per cent, North America 36 per cent, Asia Pacific 14 per cent and Latin America four per cent. The Middle East and all of Africa barely make up two per cent.
The GCC represents 58 per cent, North Africa 27 per cent, the Levant seven per cent and others eight per cent. Due to the current trends and economic, oil price and construction boom which all are affecting advertising expenditures, market research, consultancy and all communications sectors in the region the growth rate on research is expected to rise by at least five per cent.
When it comes to Saudi Arabia, 75 per cent of the business is been ordered in the UAE, but implemented there. Also, Jordan has become an important market over the past two years and a very important place for communication in terms of advertising and research.
There is a willingness by people from the media sector, business, industry and research to develop the industry. They are doing a lot of conferences and campaigns in that regard.
What has changed about perceptions towards market research in the UAE, GCC and the rest of the Arab world compared to 10 years ago?
It is easier to talk to clients now and they can understand language in terms of the research language, what it is about and its benefits. More than 10 years ago, it was extremely difficult to talk to business owners and managers about what market research was all about.
Based on our business, most of the big international and multinational companies do use market research studies. Middle size companies are following suit in using research studies in order to find ways to compete and expand their business and operations and to consolidate their position in the markets.
In terms of sectors, UAE and worldwide, the most important sector for research is Fast Moving Consumer Goods (FMCG) companies.
When research is conducted, there are several types: marketing research, media research (watching what and reading what), political and social polls, customer satisfaction research and advertising research.
Research on marketing represents 60 per cent, political and social opinion polls 14 per cent, customer satisfaction surveys 10 per cent and advertising nine per cent, of the total world expenditure on market research.
But what you fear is the entry of newcomers from outside the business who try to conduct research without any experience and understanding of the culture.
There have been incidents in the region by agencies that claimed to be professional but ended up costing clients and the industry a lot of money, that was wasted.
Arab world is far behind in market research spend