Human vs. Synthetic Data: How AI Will Affect Market Research

One of the latest buzzwords in the field of market research is "synthetic data" – the use of generative AI (e.g., GPT-4, Bard, Claude) to mimic human-style responses for testing, research, and analysis. It's recently been regarded as a step forward in data-gathering, offering the potential to streamline data collection and reduce your reliance on human respondents.

But amidst all the excitement and innovation, it's important to ask a crucial question: does synthetic data truly replace the insights we gain from real people? 

In this blog, we'll explore how AI will affect market research and why human perspectives remain invaluable in the decision-making processes of businesses and organizations.

The Quality and Reliability of Synthetic Data

A recent study by Kantar revealed some significant drawbacks to using synthetic samples for market research. They conducted a quantitative and qualitative experiment to evaluate the quality of AI-generated data, specifically GPT-4, compared to real responses from human panelists.

For a fair comparison, survey data from approximately 5,000 respondents was utilized, covering topics related to luxury products and their attitudes toward technology. The same demographic markers from their human sample were also used to condition GPT-4's responses and create a matching synthetic sample.

What did they find?

Their findings revealed that GPT-4 exhibited biases and a lack of variation in qualitative and quantitative analysis, often veering toward stereotypical answers. It tended to be overly positive in responses, making it less reliable for market research purposes. In contrast, human respondents offer more reliable and diverse opinions that accurately represent a real-world audience.

Pros of Synthetic Data

• Efficiency: Synthetic samples can be produced rapidly and on a large scale, saving time and resources. This is particularly beneficial for large-scale projects.
• Extended Reach: Synthetic samples can complement human responses by providing generic attitudes to expand your dataset's size and diversity.

• Consistency: AI-generated content tends to be more generic and stereotypical, contributing to consistent responses across different survey conditions – ensuring uniform data collection and analysis.
• Privacy Protection: Synthetic samples allow you to generate content that reflects real human data without compromising privacy. 

Cons of Synthetic Data

• Quality and Hallucinations: Synthetic sampling can exhibit hallucinations, wherein incorrect responses are presented as factual. This can lead to inaccurate or skewed data and insights.
• Lack of Nuance: Synthetic samples may struggle to effectively capture nuanced responses or subgroup trends due to a lack of contextual understanding. 
• Limited Scope: Responses given by synthetic samples may lack accuracy when asked highly specific or proprietary questions that require specialized knowledge or access to confidential data.
• Training Data Dependency: The effectiveness of synthetic sampling is highly dependent on the training data used to develop the AI model. When dealing with entirely new or niche topics, the responses may not be reliable.
• Need for Human Expertise: Synthetic samples often require human experts to verify their responses, offsetting the time saved from automation.

How AI Will Affect Market Research

The impact of AI on market research is a topic that’s been gaining a lot of traction in the industry. As AI technologies such as natural language processing (NLP) continue to advance, they offer the potential for more efficient data collection, reduced costs, and access to larger and more diverse datasets. 

However, as these models are still new and unexplored, it emphasizes the need to critically examine this approach. Getting an accurate reflection of real-world behaviors and preferences is crucial when designing and validating synthetic data models. As such, you should define different types of synthetic data and evaluate which types are effective, in what contexts, and for what purposes.

While AI-generated samples offer efficiency and consistency, biases, a lack of nuance, and challenges in handling specific or proprietary data raise valid concerns for insight professionals. As a market researcher, you must carefully navigate these waters and strike a balance between leveraging AI's advantages and creating high-quality, trustworthy data. 

While AI-driven ResTech services are exciting, they should be seen as tools to complement, rather than replace, the insights you gain from real human panelists. As businesses strive to make informed decisions, it's clear that the value of the human touch in market research is here to stay.

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