The Fascinating Founders Of Market Research

 

In a past article, I created the quote: “Those who do not learn from market research history are doomed to average data.” As far as I know, the quote hasn’t made it to any social media memes or posters with cats. I still stand by it. I’ve advocated the importance of retaining some understanding (and context) of the history of market research—on this blog and in such sites like The American Marketing Association. As with the pioneering concepts of Edward Bernays, many market research ideas can actually go full circle and become relevant today.

In this article, I present a summary of all the principal Founders of Market Research. I drew from various resources, but mainly from Paul A. Scipione’s A Nation of Numbers: The Development of Marketing Research in America. It’s an excellent book we included in our article The Best Books On Market Research.
Get ready to journey on a Tardis of market research chronicles (or perhaps modified DeLorean if you have more American time travel sensibilities). I believe you will find that these fathers of market research to be far more interesting (and even controversial) than you could have imagined.

 

George H. Gallup (1901-1984)

 

 

Most Americans are aware of the Gallup Poll, but few know about the individual it’s named after, George Gallup, who also happens to be the chief developer of public polling.

Gallup began as a journalism and advertising academic, teaching in such hallowed institutions as Columbia University and Northwestern University. His breakthrough happened in 1932 when he helped his mother-in-law, Ola Babcock Miller, during her election for the position of Iowa for Secretary of State. No Democrat had won statewide office in Iowa since the Civil War. Gallup’s polling of the counties gifted Miller the insights to understand voters. The only question on his questionnaire was, “What are you most worried about?” Miller calibrated her political message depending on the majority answer of each county. This resulted in a landslide victory.

The Iowa election not only propelled Gallup to nationwide celebrity, it eventually led him to found the American Institute of Public Opinion, which soon became a perennial bellwether for national politics. His one black eye would be his calling for Thomas Dewey against Harry Truman in 1948 (Gallup blamed the blunder on closing polling too early).

Market Research Legacy: Gallup was a champion for dry quantitative research, claiming one should focus on the “what” instead of the “why” in research. He held little patience for research that delved into the subconscious motivations of respondents, as well as focus groups in general.

Quote: “I could prove God statistically.”

 

Arthur C. Nielsen (1898-1980)

 

 

Nielsen is also a household name like Gallup. His story is one of how adversity can create opportunity. During the Great Depression, Nielsen’s firm ACN (which tested and measured technologies) struggled like most businesses.

Struggling for income, Nielsen came up with two innovations in 1936: the Nielsen Drug Index (NDI) in 1933 and the Nielsen Radio Index (NRI). These innovations were based on his idea that he could develop a nationwide probability sample of drugstores. His company began auditing key brand statistics like purchase invoices and shelf stock, and then plugging those numbers into a proprietary equation. This analysis produced sales and mark share statistics for competitive brands of the over-the-counter drugs.

Large companies like Johnson & Johnson and Procter & Gamble soon began paying Nielsen for his insights. This gave birth to the power of price reductions, sales, and promotions within stores. In time, ACN became the first market research firm to exceed a billion dollars in annual revenue. Later on, of course, Nielsen entered the television market to become truly immortal.

Nielsen always claimed he “accidentally” entered market research.

Market Research Legacy: Beyond his sample statistic innovations, in 1948 Nielsen’s company built the first ever general-purpose computer, the Univac, for $150,000. Steve Jobs and Bill Gates would later work on cheaper products, thankfully. Moreover, Nielsen Ratings have been the standard-bearer for marketing television for decades.

Quote: “The price of light is less than the cost of darkness.”

 

Alfred Politz (1902-1982)

 

 

In this pantheon, Alfred Politz balances the dry countenance of Nielsen. His life is closer to that of a movie star or international spy.

Politz worked as a marketer in Germany in the 1930s, even though he was a physicist by education. He fled his homeland to the US, aided by chewing gum magnate William Wrigley. The reason was that Politz feared that Hitler would force him to work on weapons of mass destruction.

Once in America, Politz worked in advertising, claiming he wanted a job where he could make the most money for the least amount of thinking. His fiery personality led him through many companies, producing great marketing work but also great enemies. Eventually, he founded Alfred Politz Research, Inc., which would become a chief market research firm. His company dominated the development and implementation of new quantitative methods for advertising research for nearly 30 years. During his meteoric rise, he lived the life of a rock star: flamboyant and hedonistic (and often entertaining to the press).

Market Research Legacy: His advocacy of random probability sampling shaped market research. His influential, high-visibility studies for Life Magazine became legendary in marketing circles.

Quote: “Repeat exposure without repeat payment.”

 

Ernest Dichter (1911-1991)

 

 

We provided an exposition in Freud and The Intriguing History of the Focus Group. Like Politz, Dichter was a complex and fascinating character, a press celebrity who even appeared on The Tonight Show. Furthermore, the Viennese Dichter also came to America to avoid Hitler, but the reason was that he was a Jew.

Ironically, Dichter and Politz were lifelong enemies, their antagonism a symbol of the yin and yang tension of qualitative and quantitative polarities.

Certainly, Dichter was a trailblazer of qualitative research, as well as a Freudian who believed in manipulating the “beast mode” forces bubbling in the human subconscious. From phallic-looking cigarettes to the legendary tiger in the gas tank, Dichter played with symbols and archetypes to manipulate consumers.

Market Research Legacy: Developed and perfected the focus group (and coined the term), permanently injected psychology into market research.

Quote: “What people actually spend their money on in most instances are psychological differences, illusory brand images.”

 

Charles Coolidge Parlin (1872 – 1942)

 

 
Like Nielsen, you could say Charles Parlin accidentally entered market research.

A Wisconsin schoolteacher with no marketing experience, Parlin was hired by Curtis Publishing Company in 1911. He didn’t even receive a job title. His job was to provide better advertising insights on an agriculture magazine the company had recently bought.

Parlin created market research out of thin air, from data gathering to best practices, interviewing subjects and breaking down the findings in sober numbers. Almost overnight after his groundbreaking work for Curtis Publishing, logical rule replaced intuition in the marketing world. He eventually started his own firm, National Analyst, and further pioneered market research as we know it.

Market Research Legacy: Founded the first market research company in history, parlayed one set of simple insights into an entire set of standards that still govern market research and general marketing to this day.

Quote: “Advertising, properly applied, reduces selling cost. The consumer pays the expense of advertising which therefore justifies itself.”

 

Conclusion

 

 

If there is a main takeaway to the lives of these individuals, it would be that market research is often as accidental as it is analytical. It’s a cauldron of invention as it is a laboratory of data, producing a $24 billion a year industry that employs more than 150,000 workers nationwide. Also, market research doesn’t have to by dry and rigid, or at least perceived as such, and that often common sense rules the day for individuals trying to make sense of market forces.

Most of us probably won’t appear on The Tonight Show or have to worry about fleeing despotic governments. Nevertheless, we can have a good time and change the flow of this nation of numbers.

 

A version of this article appears in Quirks

 

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