The Global Intelligence Alliance (GIA) has published its latest Global Market Intelligence Survey. For business information companies the implications are that there are greater opportunities for out-sourced services, however if they cannot supply vital market intelligence on their clients prospects they are likely to be left out of the ‘intelligence data’ supply chain.
The 2013 Global Market Intelligence Survey is the sixth in a series of studies conducted by GIA since 2006 on how companies around the world conduct market intelligence, and how leading companies use market intelligence for better decision making. Today, it is the largest and arguably the most authoritative study on market intelligence in the world.
This paper presents the state of market intelligence in global organizations in 2013, the key success factors and evolving trends in World Class Market Intelligence. The report also highlights some differences between business-to-business (B2B) and business-to-consumer (B2C) companies in the way they conduct market intelligence.
The analysis is broken into three main sections. The first section highlights the state of market intelligence (MI) in 2013 in terms of the efficiency of and resources dedicated to MI compared to 2011. The second analyzes trends among World Class Market Intelligence functions and the third section investigates key differences between MI programs in B2B and B2C companies.
Market intelligence is conducted more efficiently in global companies compared to 2011. 80% say investments in market intelligence have paid off.
- In relative terms, decision-making is 15% more efficient in companies that have a market intelligence function in place, compared to those without.
- Returns on investment (ROI) from market intelligence is becoming more apparent; 80% of all companies say that investments in market intelligence have paid-off, an increase of 2% since 2011.
- The average size of market intelligence teams has been reduced by one person to 12 people since 2011. However, the number of contributors to MI has risen by 15% to 109 people.
- The average MI budget for projects and services has increased 53% to € 1.6 million / $ 2.1 million since 2011. However, 50% of all companies spend only € 150,000 / $ 195,000 or less.
Companies with World Class Market Intelligence functions are expanding their teams and operate with both centralized (in-house) and outsourced services to better serve needs throughout their organizations.
- Companies with World Class Market Intelligence functions are adopting a two-pronged approach to MI, where a larger central MI team serves top management, while the rest of the organization is served through a greater use of outsourced market intelligence services.
- Companies with World Class Market Intelligence operations have enlarged their central market intelligence teams by 5 people to 18 people on average.
- Companies with World Class MI have increased their use of outsourcing for MI deliverables from 13% to 18% since 2011.
- The proportion of MI deliverables directed towards top management has grown from 38% to 46% in companies with World Class MI.
Key findings: Industry comparisons show that large budgets are no guarantee for more advanced market intelligence functions or higher ROI
- Market intelligence is most advanced in Media and Entertainment companies but interestingly, that is also where the perceived return on investment (ROI) is the lowest.
- The highest perceived ROI for market intelligence is instead in the Environment and Renewables industry, where budgets are slightly higher.
- Large budgets however, are no guarantee for advanced market intelligence functions. For example, Medical Devices and Healthcare companies spend significantly more on market intelligence every year than companies in other industries, yet their market intelligence programs are the fourth least advanced of all industries in the study.
Importance of Market Intelligence:
All in all, 68% of respondents indicated that their organization had a formal market intelligence function in place. This represents a slightly smaller share than in the 2011 survey where 76% of the respondents had a formal MI function in place. However, in terms of actual figures, there were still significantly more companies with an MI function surveyed (820 in 2013 compared to 750 in 2011).
Two additional factors that impact how market intelligence operations in companies are organized are the size of the company (by annual revenues) and which industry the companies operate in.
The manufacturing and industrial sectors were most well-represented in the study with 179 responses (15%), followed by Professional and Financial Services (including Insurance). Overall, 21 different industries were represented in the Survey but the top 10 industries accounted for 71% of the total number of replies.
In terms of company sizes, there were a larger proportion of companies in the smallest revenue band in the 2013-study compared to 2011. 30% of the organizations represented in the survey had annual revenues of less than €100 million / $ 130 million, whereas the equivalent proportion in 2011 was 21%.
Benefits and ROI of market intelligence:
The Study shows that companies with a formal market intelligence function see clear benefits from it (Exhibit 8) and that the program pays off.
In 2013, 92% of all respondents agreed that their organization has benefited from market intelligence, compared to 93% in 2011. Only 3% of respondents disagreed with the statement that MI has benefited their organization and 6% neither agree nor disagree.
Furthermore, segmenting the answers in relation to MI (not shown in graph), it is also clear that MI Users (decision-makers) see as much benefits as MI Professionals (92% agree in both cases).
In terms of returns on investments for market intelligence, the proportion of people who agree is slightly smaller, but still represent a convincing majority.
The 2013 Global Market Intelligence Survey measures the state of market intelligence in over 880 companies from 21 separate industries and 64 different countries. Over 1,200 decision makers and market intelligence managers responded to the survey, making it the largest study on market intelligence to date.