Quant Marketing Research

Quantitative Marketing Research include game theory, microeconomic consumer theory and several optimization techniques. Research, for example, can look at websites that compete on organic search results on Google and other search engines, and analyze their incentives to try and cheat the ranking algorithm, and the effect of such cheating on consumer happiness.

GOAL: Help businesses create better products and services, that will lead to happier consumers.

Condensed from: Ron Berman @ Wharton

The second part of quant marketing includes empirical research. Empirical research involves collecting data that was typically created by an uncontrolled experiment, and using sophisticated econometrics to analyze the data and arrive at conclusions. If you've never heard the term "econometrics" before, think "applied statistics". Good conclusions from empirical work help explaining how consumers and firms arrive at decisions and also help validating theoretical models. Really good conclusions help forecast how changes in the market affect choices by consumers and firms.

There are many examples for empirical research. One example is research by Brett Gordon and Wesley Hartman about political advertising, that looks at how spending on advertising affects voters choices. Another example is research I am conducting that tries to define a new way to measure the impact of sequences of online ads on consumers.

Another up and rising topic of research (in the last 15-20 years or so) is behavioral economics, which looks at biases people have in their behavior (what economists might call "irrational behavior") and tries to build a mathematical model that explains and predicts this behavior. This area of research is a "bridge" of sorts between CB research and quant research, as it takes experimental results and wraps them with sound rigorous mathematical models.

When people (who have gone through an Economics grad program) ask me about marketing research: "isn't this what Economists do?", I answer: "Yes, they also do that". "So what is the difference?" they ask. My reply is typically: "Like engineering is applied physics or applied chemistry, so is business research applied economics". I am not sure I can say (yet) where the boundary of marketing research and economics lies, but they are very much related. You can find economists performing research that will be considered marketing, and marketers that perform research that can be considered economics.

As a summary point, quant marketing is becoming more and more relevant as time goes by. The ability to reach interesting conclusions about decision making many time hinges on availability of data - lots and lots of it. Given the advent of Internet data collection through advertising, tracking, surveying, social networking and just browsing, marketing researchers today have the data needed to reach those conclusions. But as always, some ointments sometimes have flies in them (so my dictionary tells me), and too much data is also problematic.

Which gets me to present day - marketing research today deals with handling these huge amounts of data, and building the smart mathematical tools that help us refine the insights hiding in the data. Those insights will hopefully help businesses create better products and services, that will lead to happier consumers.