Market research, along with public relations and research analysis, seems to be gaining ground and confidence, believe industry professionals.
Companies dealing in these activities provided contradicting figures, but some claimed as much as double-digit growth in the past year.
Piyush Mathur, Regional Managing Director, Middle East, North Africa and Pakistan, Nielsen, said the company witnessed a high double-digit growth of between 15 and 20 per cent in the last quarter of 2008. "Whether this will continue in 2009, we are not sure. It is a period of uncertainty and strain across all industries," he said.
Speaking about the bright side, Mathur noted that with tightening of marketing budgets, marketers and advertisers are becoming more keen on justifying their spend through measurement of return on investment.
"This is the kind of service they are looking at. Many companies have been commissioning and conducting research before. Now with the economic downturn it is even more crucial for them to do research. There are a lot of opportunities, and a lot of strain. The competitive landscape will change and many companies will continue to do well while others won't. Yet, ROI measurement and media ratings will become an urgent demand."
Gagan Bhalla, General Manager of AMRB for Mena, confirmed that market research industry in the region has been growing at a compound annual growth rate of 22 to 25 per cent over the past few years, according to Esomar estimates.
The reasons he said, include the increasing focus of multinational corporations on this region. This is due to increasing consumer base, rising living standards, higher disposable incomes and high level of liquidity. All those factors, according to Bhalla, have led to greater discretionary spending in many categories such as luxury goods, automobiles and travel, hence more important for marketers to understand the consumer.
He agreed that measuring ROI is becoming increasingly important, "not only because of the economic crisis, but also due to increasing fragmentation of media, making it more challenging for most marketers to optimise their media budgets".
He said: "In times of economic downturns, clients typically tend of cut down on advertising and research budgets. However, there have been numerous case studies where companies that continued investing during a slump were likely to grow faster when the economic situation improved."
Pointing out the industry's drawbacks, Bhalla said: "The main issue in this region is that the research industry is not organised. For example, there is no unified standard for socio-economic classification. Each agency uses its own way of defining respondents' social class. Similarly, there are no standard media ratings for TV, radio or print, which again means that there is no common currency for media buying and marketers have to struggle with multiple sets of ratings."
Online research has also seen rapid growth according to Tamara Deprez, General Manager of Maktoob Research. She said the company's revenues increased by 355 per cent compared to the year before, marking a rapid growth in online research.
"Despite December witnessing a slowdown because of the holiday season in the region, January is picking up. We haven't noticed any decline in demand for research. On the contrary, we have noticed a growing interest in conducting research," said Deprez. "I am convinced during the current global crisis clients are realising they need research to test how effective and appealing their new products or ad campaigns are."
"Research hasn't been so popular in the region, because it is still a bit more expensive than other regions such as Europe. The reason for elevated costs is that most research regionally is conducted face to face. In a country such as the Netherlands, 75 per cent of research is conducted online, and 25 per cent through home interviews. That is certainly less expensive, but then this region still lacks proper online and phone databases, which are being built and developed."
Bhalla said market research costs were under indexed given the cost of living in the region. "Research costs in this region are three to four times lower than in European markets."
Media monitoring, analysis and consultancy in the Gulf reached $25 million (Dh91.82m) in the first 10 months of last year, said Mohamed Elzubeir, Head of Mediastow.
A top media expert said those figures could be exaggerated. From a PR perspective, he said, budgets have not suffered cuts as drastic as advertising. He explained that advertising cuts channelled to PR do not necessarily boost the growth of media monitoring and analysis business, because the funds are utilised for diversifying activities.
The only way to increase media analysis and monitoring business is to win new clients, the expert said, but confirmed that there have been incremental increases in certain areas of media analysis. According to Elzubeir, the growth of media monitoring and analysis business is attributed to the need of public and private sectors in the Gulf to better understand the market, the industries they are working with as well as the economic and marketing significance of the media discussions at the local and global level.
"The global financial crisis has highlighted the need to keep a good eye on what the media says and leverage it to expect the best and prepare for the worst. We see that many public and private sector organisations are dedicating bigger portions of their marketing communications budgets to media monitoring and analysis," he said.
Elzubeir noted that only qualitative analysis would help companies emerge unharmed in troubled times.
Jack Pearce, Chairman of the Middle East Public Relations Association (Mepra) said media monitoring consists of an average of five per cent to 10 per cent of the total PR budget, depending on the size of the PR agency.
According to Mepra figures, the total PR spending during 2008 was a little above $150m.
Ziad Hasbani, Managing Director, Weber Shandwick, said: "In challenging times such as these every dollar spent on marketing or PR has to be accountable. Agencies must ensure they are providing value for money and establish KPI's at the beginning of each activity to measure the effectiveness of PR against tangible client objectives."