Consumer insights is a cruel industry. Companies are swimming in data after a product launches — sales data, demographics and insights into customer behavior.
But before that, new products and marketing strategies are built on guesses.
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Zappi, a London-based consumer insights startup, announced on Tuesday it raised $170 million in growth capital from Sumeru Equity Partners and other undisclosed co-investors to make pre-launch data easier to access.
The company’s AI-powered consumer insights platform is meant to help marketers evaluate ad campaigns and new product development before they launch. The startup has worked with companies such as PepsiCo, Heineken and McDonald’s since its inception in 2012 and has around 350 clients.
“Why is it that most products and ads still fail when they hit the market?” Zappi CEO and co-founder Steve Philips said in a statement. “It’s simple: traditional market research is too slow, too costly, and too analog, serving as more of a blocker than an enabler of creative effectiveness and winning innovation.”
Updating an antiquated industry
AI-enabled market research saw massive growth in 2021, and numbers haven’t died down despite an overall venture funding dry spell. Funding to the sector peaked in 2021 with over $2.2 billion in venture investment, and 2022 seems to be closing out with around $2.19 billion.
AI was quickly embraced by investors starting in 2015, and that’s because without it, market research takes a long time. It often takes weeks of surveys, focus groups and panels to piece together actionable insights that can help product developers refine new merchandise in the early stages of conception.
But not much happens to those data points afterward. Like Philips said, companies can spend thousands on research, product development and marketing launches and still fail.
But what if those expensive surveys were valuable long after product launch? For example, a seltzer company crafting a marketing campaign could use insights from another seltzer company that commissioned a survey.
Plenty of startups like Zappi are starting to use AI to make the research process faster and quickly get the consumer’s pulse.
Illustration: Dom Guzman
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