Research Aggregators Fill A Niche

Companies that specialize in aggregating and reselling analyst market-research reports are playing an increasingly important role in helping companies scrutinize offerings and save money on research that really matches their needs.

"Market research is expensive stuff," says Robert Granader, CEO of MarketResearch.com Inc., a Rockville, Md., company that aggregates and resells analyst research in a number of industries including IT. "The goal for any company searching online for market research should be to minimize their own risk, in terms of paying for information they can use."

To help customers mitigate the risk of overpaying for research that may be of little or no value to their company, MarketResearch sells analyst research in its entirety or in pieces. In such instances, it charges by the character, which it says is more cost-effective than charging for a small group of pages that include a title page and lots of white space.

MarketResearch began offering research "by the slice" a year ago to better appeal to its smaller clients, who are looking for very specific research and a lower price, says Meg Hargreaves, MarketResearch's VP of research publishing. Customers can have the cost of the research billed to their corporate account, or they can open a pre-paid account and replenish payment when they've exceeded the pre-paid limit.

Granader says sales are up for the year overall, thanks to stable categories such as biotechnology and pharmaceuticals, but down for IT research. Although he hasn't performed a specific breakdown, Granader says the strength of traditional, non-IT research is up about 40% thus far in 2001.

MarketResearch attributes its success to a diversified business model. In addition to aggregating research from about 350 firms such as Gartner and Jupiter Media Metrix Co., MarketResearch publishes annually more than 75 research studies of its own, covering the health-care and pharmaceutical, food and beverage, consumer packaged goods, and demographics markets.

Centralizing spending on analyst research through an aggregator also provides a company with a better perspective on how much it's spending and what it's buying, says Arik Keller, a director with MindBranch Inc., a market-research services company in North Adams, Mass. MindBranch offers its customers access to the company's QuickLink desktop portal, which provides a central repository of the research they acquire and also tracks clients' spending.

Available since March, the tracking feature is designed to help clients avoid redundant spending on research reports. When a company completes a purchase online, information such as cost, topic, and research firm is captured and provided in a consolidated version to the customer. Upcoming versions will enhance QuickLink's ability to provide more in-depth collaboration and tracking and to integrate with its customers' customer-relationship management systems.

Keller believes that there's still a demand for market research, despite a slip in purchases and the 25% drop in demand for IT research from last year. "Last year, people weren't hesitating to spend $4,000 on research report without getting prior approval," he says. "Now people are looking for less expensive research through niche and more specialized research firms."

Regardless of how much companies spend on market research, says Jay Habegger, president, founder, and CEO of Bitpipe Inc., a Boston syndicator of IT research, they're looking to get more value out of the research they're buying. "All research firms today have an extranet that a customer can access, but it's unusable to have access to more than a few," he says. At least part of the success of the analyst-aggregation model comes from clients not wanting to search multiple databases from different research firms to find relevant research.

But the analyst-aggregation-services business model isn't flawless. Hewlett-Packard's DeepCanyon Co. fell into the abyss last October after it was unable to secure a second round of financing. Observers say HP created and spun off the Seattle Internet startup without understanding the difficulty of providing a research aggregation service and that HP was looking for a quick turnaround on its investment, rather than providing customer service.

Perhaps the most notable trend in IT research purchasing over the past year has been the way in which companies search for data. Companies looking for market research today are "topic-motivated, rather than brand-motivated," Habegger says. "Rather than look up a particular research firm, companies start with a problem and look for data that will help them solve their problem."