Have you read all the reports by research firms predicting the demise of all dot com retailers? (Forrester''s and Barron''s were among the first.) They have been reported with thinly veiled glee by many Internet reporters and columnists. What these same reporters and pundits fail to mention is that as the dot coms go, so goes all the research that depends on free-flowing dot com funding to support it.
Belt Tightening = Reduced Spending on Research
I was consulting for a while for a dot com that is no more. I left them in disgust at having my advice ignored before the creditors came a-calling. When the belt tightening began, what do you think was the first thing they cut? Research, of course. While wasteful advertising campaigns continued to run, valuable research that could have informed them that the name of the game had switched from customer acquisition to customer retention was no longer available.
I''m no different from the rest of these writers. I rely on the reports that the various research firms - Forrester, eMarketer, Jupiter, Zona Research, AMR Research, IDC, IMT Strategies, Meridien Research, just to name a few that come into my mailbox. Without them, I''d be forced to rely more on press releases - a dubious source. I think you''ll agree, however, that I have not been cheering the demise of the dot coms, and not because my portfolio includes high-tech mutual funds.
Research Industry to Restructure
With less money being spent research, we can expect to see a restructuring of the research industry. Granted, few research firms limit their research to retail or to online retail, but there is no question that there has been an explosion in research. I continue to hear from new research firms. Meanwhile, existing firms have been able to expand into a wider range of fields as a result of the money that''s been available to research firms from the dot coms and their VC backers.
The research companies that survive will be those that cover a wide range of topics. The specialty research firms will likely be eliminated from budgets in favor of the generalists. It will be easier for executives to defend research spending if IT and marketing can both benefit from it than if the research really only serves one audience. This is opposite to the strategy I usually recommend to businesses: specialize. In research, top of mind is better than top of mind for one particular thing. For example, there may be a small research firm that only deals in wireless (if you''re out there, add me to your press list). This sounds great to a wireless competitor, but the big generalist firms have analysts that focus on wireless. It''s going to be hard for the wireless-focused research firm to remain on the budget of its clients when clients have to choose between it and IDC, which also reports on many other topics.
Public Relations = Visibility
Another factor that will redound to the benefit of research firms great and small will be a strong public relations effort. The older research firms frequently have the advantage here, because they''ve already cultivated relationships with the press.
Companies buy research of which they''ve been made aware. While smaller research firms may be reluctant to make their research too widely available for free - closely scrutinizing who is given press access to the research - they''re limiting the free publicity their research will receive. I write about roughly one-tenth of the research that comes into my mailbox. The rest either doesn''t get read, or gets read but never works its way into a column. I frequently aggregate research, as in last month''s column B2B Marketplaces: Better for Small Businesses?. If a company I haven''t mentioned in a column in a while adds up the value of research they''ve sent me and determines that they''re not getting their money''s worth out of keeping me on their list, then they can be certain I won''t mention them. I can''t write about what I can''t read about.
With digital goods, a shareware or lite version, is almost always part of the business plan. At the New York Times Web site, news from the past two weeks is free whereas anything older is part of their pay-per-view archive. For WebPosition Gold (the search engine placement software), a free limited-function version of their software entices users to purchase the fully functional version. For research firms, the formula is no different. The difference is that the free research, usually excerpted, must be available on the site, and must be appealing enough to inspire businesses to buy the complete reports. The excerpted research also has to appear in the text of trusted third parties, such as those writers who enthusiastically covered the demise of the dot com retailers only a short while ago.
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena is now available. She can be reached at agutzman@internet.com.
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