‘Doc, I have a picture of the future, but I’m starting to disappear from it...’ It’s a common refrain from researchers in this age of DIY surveys and big data. But, says Paul Griffiths of Simpson Carpenter, many of the answers are in our past.
6th Decemer 2012
In today’s fiercely competitive market research sector, what do agencies need to do to survive and thrive, and what role will traditional techniques and approaches play in the future?
Nobody reading this will have failed to notice the changes that have had the greatest impact on the market research sector over the last five years. They may have been creeping up on us separately over a number of years, but in the last eighteen months they all so seem to have crystallised to create something of a perfect storm for research agencies. The tough macro-economic environment, the growth of DIY research, a resurgence of in-house insight teams, clients going direct to fieldwork providers, reduced client budgets - all of these elements are combining to create a commercial environment where the easiest default position (but not necessarily the smartest or longest-term) is to see research agencies compete even more than ever on price, in an attempt to retain and win work. You only have to pitch for work on a regular basis at the moment to come across examples of agencies who are engaged in a destructive ‘race to the bottom’ as they compete to drop prices to win what are increasingly unprofitable projects. Of course as with all market disruption, there is also an opportunity to take advantage of, for those agencies that are smart and flexible enough to respond strategically (and not by cutting their own throats). However, you must retain a strong sense of what research delivers, when it is at its commercially driven best, and apply that to the changing needs and priorities of clients.
The growth of ‘Big Data’ - and what it says about market research
Data analytics is gaining momentum because clients want real-time tactical information about how consumers are interacting with brands and products, so that they can change and adapt their strategies to maximise their return. It also gives them complete control, including the ability to analyse their own ‘free’ data in real time using people who are experts in the company’s business.
What this suggests to me is that market research simply isn’t fulfilling some of the basic needs that clients have, i.e. the need for immediate, actionable information. In a world of instant responses, 140 characters and at-a-glance info-graphics, the ‘old ways’ of market research are going to struggle to retain relevance and thus compete. A four to six week delivery time on quite basic projects seems antiquated and unrealistic, even if that is the reality and a protection of quality.
Back to the Future Part II
However, I consider ‘Big Data’ to be a huge opportunity for those traditional market research approaches that are rooted in statistics and analytic rigour. Now is the age of the ‘data geek’ and the statistician, those researchers who have too often hidden in the back offices of research agencies are now being dusted off and proudly paraded in client meetings. The skills of data management and manipulation, conjoint analysis and correlations, trend prediction and forecasting modelling that as an industry we have probably not shouted about too much in recent times are suddenly back in vogue as a means of differentiation and to exploit and manage the big data pipeline.
I would argue that as researchers we are well-positioned to be part of the brave new (but actually quite old) world. We understand, interpret and translate datasets. It may be a cliché but it is the storytelling, the impacts on the business and the reactions from consumers and markets that clients want to see, and will pay for. The traditional research techniques that we all rely on will continue to be important in allowing us to do this, but we also know that clients want innovative approaches that will provide new insights that can give them that all-important advantage over their competition.
For instance, qualitative research is enjoying a golden age at the moment (I base this partly on the volume of qualitative briefs out there at present, and partly on the apparently unmet need for Qualitative Directors in the recruitment pages), as brands aim to get much closer to their customers. However, it is those agencies that have created innovative tools and techniques built on the foundation of qual that are in most demand, while others that have failed to adapt have seen turnover and profits tumble.
Successful agencies need to think about ‘tool kits’ as the way to provide the mix of primary and secondary sources that enables both the consumer understanding and market knowledge that clients demand. That must incorporate data analytics and modelling, as well as marketing know-how, and the latest in both qualitative and quantitative approaches. It is down to us to worry about the sample sizes, whether it’s an off-line or online approach and whether it’s representative - this shouldn’t be the focus of our narrative with the client.
Act, at times, like a management consultancy (but don't actually be one)
As an industry we must constantly prove the value of the work we do, and we need to do that in the same commercially savvy way that management consultancies do. I really feel this is one area where there is most potential to thrive and commercially make hay - because I can see lots of room in our crowded and competitive sector for agencies that do actively prove their value.
Think for a moment how much time management consultants spend with their clients getting to know and understand their business. Then think about how much time you spend in your client’s business - in their shops, talking to their customers, staff and stakeholders, using their products and services; is it really enough? Management consultancy teams tend to incorporate individuals from a variety of backgrounds who are all specialists in their field and bring something to the commercial mix. How varied is your team? It’s not enough to simply reposition ourselves as ‘consultants’, as many in the MR sector have long been aiming to do (and generally failing if you look at average profit margins across the industry). We have to evolve our business to be able to deliver on this promise before we can claim to give advice that can make a real difference to the bottom line - either our clients or our own! And failure to do this isn’t an option; it’s a prerequisite for survival.
Back to the Future Part III
So here we are, back at the future. Clients still need to understand consumers and their reactions, their behaviours and opinions. The traditional research tools, the skills and values we as researchers bring to problem solving, identifying an unfulfilled need or explaining unexpected consumer behaviour are still in demand. What has changed is what we deliver and how we deliver it. How we respond to other data sources will be a more central part of research; from predictions to modelling, statistical analysis of the increasing number of data sets available to clients will become central to the work we do.
To conclude, there is gold in them there hills, and as an industry we can mine it (without blowing each other up along the way). As agencies we need to think about how we position our core skills of data comfort and an ability to manipulate information to deliver concise commercial business actions for our clients. We need to persuade our clients that what we can offer them justifies them allowing us to get closer to them. And then we need to deliver on the basic pre-requisite of any research - using data as the basis for telling our clients something that will change their business. Based on this, the future ain’t so scary!
