There has been no shortage of attention to market research in the past few years. Established business like Nielsen and J.D. Power have struggled to encompass the Internet and use its information to give their clients a better idea of how new products are seen by consumers. Where they’ve fallen short, multiple startups have bloomed to do a better job.
The innovation has led to plenty of acquisitions: Umbria, Buzzmetrics, Telephia, Audience Analytics and others have all made exits for their investors. But according to Biz360, which just took a fresh $10 million round, the market for market research is still seriously lacking in creativity.
Biz360’s current offering is a media tracking tool called Media Insights. Any time someone like me writes about, say, a digital camera, Biz360’s automated process picks it up and does some analysis on the thrust of the article: Did I like or hate the camera, and why? The data is then returned to the business customer that produces the camera. But what corporations choose to do when given that data is changing, says CEO Brad Brodigan.
“Two years ago, people were buying media analysis for defensive purposes — they wanted to know when people were saying bad things,” says Brodigan. But now companies want to know how to compete better. “What’s driving someone to buy one digital camera over another, or one car over another? There’s been a big shift from defense to offensive tools,” he says.
That sort of information is mostly revealed by customer opinions, of course, which means Biz360 — and its competitors — will have to move toward much more analysis of social media and customer opinion on websites like Amazon.com. Brodigan admits that some companies already do that, but says Biz360 will provide a superior product by merging its new findings with its existing media research.
And, in any case, the trick is in the analysis, not simply collecting the data. There’s no shortage of information on the Internet, but just like search engines, market research startups have to find ways to understand that information, and give it to their clients in a processed, easy-to-understand format. The aim is not just to see whether people like your camera, but specifically which features and characteristics they like and dislike.
Startups are hard at work to bring that level of detail to market research. One example is Networked Insights, which tags reviews and conversations to figure out, for instance, what percentage of customers really care about the camera’s 24X zoom. Another company is BuzzLogic, which recently acquired the Firefox add-on BlogRovR, to give it better data. But as far as the old guard of market research, Brodigan says he doesn’t think there are any that have a strong product. And down the line, that will likely mean another round of acquisitions by companies struggling to catch up.
The $10 million funding was led by Foundation Capital, and partner Bill Elmore joined the board. Previous investors Granite Ventures and Scale Venture Partners also participated. It’s the second full round of funding for Biz360, but it hasn’t disclosed the total amount of the first round. The company is based in San Mateo, Calif.