Go to part 1 here
Part 2 contains (1) Web 2.0: Harnessing the Potential for Business, (2) Honing Business Skills and (3) Pecha Kucha… And that’s why I love market research
Day 1 Session 3: Web 2.0: Harnessing the Potential for Business
This session kicked things off after lunch. It was chaired by Richard Young, who was the most enthusiastic and involved of all the chairs I saw over the two days. While this could have become overbearing, he generally let the speakers talk for themselves.
Dan O’Donoghue from Publicis gave this session’s keynote. While many others have praised his speech, it didn’t do anything for me. The problem with web 2.0 and technology papers is general is knowing which level to pitch it at – some of the audience will be knowledgeable, some will be novices. I felt his speech was too far towards the novice section for me whereas I can understand others levelling the same criticism at the previous session on Ensuring Transformation.
One of the things I did like about his speech (aside from the funny adverts) was his mentioning of the Boeing Dreamliner panel. He argued that the benefit of including respondents as part of the design process outweighs the fear of competitors accruing information. I’d have liked him to broaden this discussion to tremor panels, as one of the questions he faced was about whether this model could work for non-glamorous brands. Dan admitted it doesn’t work for all, but P&G have shown that distributing free samples and getting people to test products can work even for household goods.
Derek Eccleston and Luca Griseri from Harris Interactive followed with a look at how web 2.0 stretches traditional influencing patterns. I’m very keen to read their full paper as I didn’t quite buy into some of their arguments. Having the full methodology and findings may convert me to their opinion.
Their paper was on how they used Malcom Gladwell’s typology of influencers – mavens, connectors and sales-people – to explore how their influences changed in online and offline worlds. They concluded that the influence hasn’t yet spread to web2.0 since these are still principally social networks and not commercial networks.
The paper certainly provoked a debate, and it is an interesting area for exploration. My main issue was the suspicion that the conclusions are a result of the older population cancelling out the younger. I see age as being the primary determinant here and its effects need to be isolated. Social networks are principally used by younger people, and younger people are generally more receptive to advertising. Therefore, I would expect that their influence is actually magnified in the web 2.0 arena. It was also pointed out in a question that young people are more likely to put personal data online.
I found the final paper particularly impressive. It wasn’t anything extraordinary or innovative, but Ed Bartlett of IGA Worldwide and Graeme Griffiths of TNS presented a compelling argument for in-game advertising.
They opened with some background on the market and some interesting stats. The average American 18-34 male plays games for an average of 12.5 hours a week (console vs. pc vs. casual online split wasn’t mentioned) and IGA predict that in-game advertising will be worth $2bn by the end of the decade.
IGA (and Microsoft-owned Massive)’s ability to not only insert advertising into games but to dynamically target and measure the audience offers an excellent way to reach certain demographics. Demographic information is gathered from the publisher but they didn’t go into details e.g. is from an online sign-up? Is it opt-in?
A case study using Battlefield: 2142 – an immersive first-person shooter – was shown. Given the engagement levels for these sort of games, I can see the benefits of low-level brand-building. Graeme admitted that awareness levels of the in-game advertisers didn’t change – possibly because it is ultimately only background – but brand perceptions did improve for all advertisers. He also said that one of the adverts for Samsung was too contextual and it fitted in so well that the gamers overlooked it.
While early days, I’m fascinated in seeing how this develops. Whether shooters present different benefits and drawbacks to sports or racing games. How the engagement of using the Wii remote affects results. The optimal level of exposure in terms of “hits” and length of time. And then case studies for brands that are actually integrated into the game – such as in Worms 3d where a can of Red Bull acts as a power-up. Watch this space; I will be.
Ultimately, I don’t think the session highlighted the potential for business in web 2.0 particularly well. I have learned more from an 8 page Forrester report than I did from these combined papers. However, the in-game advertising offers some fantastic possibilities and that paper alone made the session worthwhile.
Day 1 Session 4: Honing Business Skills
Gregg Fraley‘s keynote on creativity opened this session. He insists that creativity is a refinable business skill and while we cannot change our style we can develop our capability. It is an attitude, not an aptitude.
He then outlined six creative behaviours that in turn can lead to personal innovation, professional innovation, relevant research and a more active role. These were
- Write ideas down and review them. We have 70,000 thoughts per day, writing them down can help double our memory of them
- Have lots of ideas
- Inject a sense of play. As JFK once said, “If it’s not fun, you’re not doing it right”
- Separating imaginative from critical thinking
- Have a relationship with the arts or nature. Einstein was an excellent violinist, apparently
- Defer judgement as a way of life
Gregg is a very charismatic speaker and he made a lot of sense with this snappy overview. He has a book published, but he also has some tips on his website and keeps a blog that contain more information on the subject.
Nick Bonney of Orange and Jonathan Fletcher of Illuminas followed with a look at the clientside research in a flat world. Because of flat structures, there is a greater emphasis on collaboration and learning, which play to researcher’s strengths. There are emerging opportunities in customer-centrism, risk management and coherence.
They argued that insight teams need to be structured to provide answers to issues before the questions are asked. To help this, clients needs to work closely with agencies – research has become to be perceived as an outsourced commodity. By combining an agency’s practitioner skills with a client’s political skills, insight can filter through to what matters. Ultimately, researchers need to become experts in sensing the environment and building collaboration
The final paper of the session was by Andy Dexter of Truth Consulting and Alice Page of UBS (in absentia) and was a very thought provoking look at how the industry may fragment into data analysts and insight consultants
The paper consisted of 4 key points
- There are problems with the path dependent economic development of the supply side
- The dominant business models are better suited to supply when it should be service
- People businesses don’t sit well with volume based business models
- Nobody can be all things and so different models emerge at different companies
The points were emphasised by comparing market research companies to management consultancies. While research agencies have an average 12% operating margin, the average management consultancy has double that. Consultancies also spend more on people – their people to infrastructure costs operate at a ratio of around 2.5:1 whereas pure data companies are more like 1.5:1. According to ESOMAR, only 5% of research spend currently goes towards a consultancy style decision-support model.
He then went on to say that some bits of market research are more like manufacturing – efficient bulk provision. However, some are becoming less like manufacturing by divesting the “making” and outsourcing data collection. This led onto four final points
- We need to admit data is a commodity but thinking is not, and therefore accountability is needed
- We need to invest in developing knowledge and pay more for the top talent
- We should look at alternative business models such as partnerships in order to play to the broader market
- We need to take brave steps
He then closed by making some (brave) predictions on where the industry would go in the next couple of years. Overall, I found this paper compelling and thought-provoking – it will be interesting to see whether the industry does fragment over the coming years.
The panel session that followed saw a great deal of discussion on market research’s position compared to management consultancy. No surprise really, since research is essentially the poorer cousin. Both Andy and Bob Adams of the Capital Group highlighted the differences. Management consultancy is a top-down immersive approach focused on rigorous analysis, while market research is bottom-up and more spread out among different clients. While researchers won’t have the sector knowledge of management consultants, there is greater scope for innovation. After this discussion closed, the questions then moved to research’s other béte noire – procurement.
The questions to the panel were a disappointing conclusion to an otherwise useful session. There was too much navel-gazing and no real opinions on either changing our business models or incorporating innovation. I can only hope it was down to the time of day and not general apathy to the subject.
Day 1 Session 5: Pecha Kucha… And that’s why I love market research
The first day closed with a Pecha Kucha (pronounced pu-cha-cha) session – where presentations consist of 20 slides lasting 20 seconds each. An exercise in creativity through constraint, as explained by the chair, Ray Poynter of Virtual Surveys.
The five presentations were all about why the speaker loved market research. We had a deconstruction of the word love, a look at market research, an explanation of why things loathed about research played second fiddle and walks through experiences. However, the content was incidental to the spectacle. The five speakers were all young – 2 under the age of 24 – and provided the opportunity for newcomers to make an impact. Which they did to spectacular effect. I was very envious towards them – not only for their success – but also because for people that look so young, they had some grand job titles (2 directors and a Head were among the speakers).
Go to part 3 here
Filed under: events, research | Tagged: dan o'donoghue, gregg fraley, harris interactive, illuminas, in-game advertising, malcom gladwell, Market research, Market Research Society, MRS, pecha kucha, publicis, research 2008, research conference, richard young, the great debate, tipping point, TNS, tremor panels, truth consulting, virtual surveys |
Curiously Persistent 
Andy’s point “People businesses don’t sit well with volume based business models” is the fundamental crack in the research agency business model. A production line model does not work for insights.
Hi Lee
Thanks for your comments. Andy’s paper certainly struck a chord with me. I am intrigued to see whether many, if any, research or insight agencies will move from an up-front charge to a post-hoc time-based fee.
Best
Simon
Given the fixed-cost precedent set by the research industry in the past I can’t imagine many research clients who would be comfortable with the ‘how long is a piece of string’ approach used by most management consultancies.
A more sensible approach in the short-term (which I believe Andy has taken) would be get the charge-out rates up to the proper level by consistently fielding senior staff.
The fundamental problem with adopting this disruptive business model (let someone else collect the data, we’ll do the thinking) is that most of the margin made by his competitors is built into the cost of fieldwork and they can afford to throw the thinking in at cost. All he can do is to try to ensure that people don’t think of organisations that price in this way as his competitors.
And then there are the clients who think that it is their job to do the thinking…
For those clients, they can go directly to the data collection company.
I agree that clients will want a fixed price – they are normally commissioning a set piece of work whereas management consultants are more about long-term upheaval.
Senior staff will give research consultants that desired look of expertise but equally it is important – and I believe Truth Consulting do this – is to bring in more junior staff and train them up to the required level of insight.
You make an excellent point about the margins. Whether clients are willing to pay for x amount of thinking time without anything to show for it but recommendations is the challenge, particularly when competitor agencies will be working on lower margins with the whole data collection & conclusions approach
I should say that I know lots of people who manage the tricky balancing act of adding value to quant research that is conducted by others. In the main they don’t call themselves researchers (or ‘insighters’, eurgh!) even though they tend to have a background in market research and/or planning. They tend to work for themselves or they work in brand consultancies, innovations consultancies, creative agencies and media agencies.
They, like many clientside researchers, apply research to problem-solving rather than being paid to *do* research.
They, like me, consider most large research agencies to be primarily data collection houses and therefore refuse to pay a premium for their reporting. I’m sorry to say that I’d much rather have some tables and a well spec’d SPSS file and do the reporting myself and lose a weekend than have to wait in anticipation of what will come out of the reporting process of any of the major agencies.
The margin is therefore made up by going around the back door and buying “field and tab”. It is usually about 1/3rd cheaper than so-called full service when buying f2f or telephone. The biggest margins exist around online research. Some supposedly full service agencies are getting away with putting absurd mark-ups on their online research whilst giving very little in return.
Qual is another story altogether…
I’m sorry to say that I’d much rather have some tables and a well spec’d SPSS file and do the reporting myself and lose a weekend than have to wait in anticipation of what will come out of the reporting process of any of the major agencies.
I have to admit that since I became a client, I have the same beliefs(though my SPSS skills are fairly limited, truth be told).
This links back to what Rupert Howell was saying in his keynote address. He doesn’t like to be present at research (he specifically mentioned focus groups) because he will be tempted to make inferences that may be incorrect due to a lack of contextual knowledge. Perhaps it is because I have a quant background, but qual seems to be eminently more difficult for a non-specialist to develop nuanced insights
Qual is a totally different world.
Many clients are uncomfortable about doing qual. I put this down to the fact that they have to give up almost all control over the intepretation of the findings to a researcher. In quant the client can theoretically know everything the researcher does by simply reviewing the data. In qual this is more or less impossible. The client is simply not there when the researcher meets the consumer and does not know what happened.
Ironically I think this is exactly why you often get the best thinking from quallies. Many of the most talented researchers and planners gravitate to qual because it offers them more freedom to add value and think freely around the brief.
Maybe I’m wrong but I think it is this gap between the knowledge of the researcher and the knowledge of the client that has ensured that quallies have never had to fight for the right to add value. With qual you can’t insist on just getting the facts because the only thing close to an objective read of the findings is the full unedited transcript or DVD. And who in their right mind goes through all of that if they can avoid it?
Many quallies still struggle ito get paid for their thinking, however. Most clients sadly buy qual by the yard and work to a fixed ratecard. This, combined with often ridiculous time constraints and low overall charge-out rates, artificially limits the potential time that a researcher can spend thinking about any one project.
Breaking this cycle is difficult. I must admit to being one of these clients more often than not. However, I recently conducted a qual-based project which I deemed to be unusually complex and strategic in nature (repositioning 4 sub brands and a masterbrand and developing communication platforms for each sub brand). I chose a researcher who had been recommended to me but who I had not worked with before. I made it clear up front that I only wanted him to work on it if he could commit decent time to it personally. I also made it clear what the maximum budget was and that I wanted him to spend the budget in a way that would give him the most confidence about the recommendations he would be making. At the outset we agreed to limit the amount of fieldwork to give him more time to think (still only a week due to time constraints but a solid week). In return I agreed to give him any client and agency access he felt he needed and to clear the road ahead by managing expectations. I have to say it went extremely well for all parties despite the tight timings and I put at least part of that down to the level of trust and freedom given to the researcher (althought the fact that he was brilliant was also quite helpful).
What’s your experience of working with quallies? Do you think they struggle with the constraints they are put under? What would you like to see more of from your qual researchers? What would make you use qual more often?
My qual experience is much more limited than my quant. Working for a media owner, the majority of my work revolves around either category analysis or proving a business case. These typically require hard numbers, though I have had the opportunity to work with some very good qual researchers on some exploratory projects.
The issue with all research agencies is that their skills tend to be in their implementation of research skills. They will never know the business issues as well as the client. Therefore it is the client’s responsibility to feed them the necessary information. But when this happens, the client may wonder “Why do this, when I can just do the analysis myself”.
As quant deals with hard data, the only skills needed to pick up are the know where to find the best data (i.e. how to cut/analyse it). Qual requires interpretation skills – the ideas needs to be put in the wider context of the conversation. This level of nuance only comes with practice, and is generally not something that clients can do.
It is interesting you mention low charge-out rates. Typically, agencies work on multiple projects at once. Ideally, I suppose I would like to see my qual agency focus purely on my project – to immerse themselves into it and dig out those extra insights. However, if that takes longer and requires more dedicated time to my project, the cost will go up and I may end up regretting my wish!
To answer your question, I would like to see the same thing from both my qual and quant agencies. Moving from telling me what the data is, to telling me what it means. Moving from mentioning the results to reading between the lines and then to how it affects my business/objectives (plus, ideally and if necessary, how to implement the findings). If I need to give them more information on my business and our objectives to do this, I would be happy to do so. And if it requires sole focus, then I will need to alter my expectations of the price