Read the following quote and ask yourself, “Who was the Kimberly-Clark CMO referring to?”
“Have senior, seasoned impact players on the front line (who are experts doing what the client can’t do vs. what the client doesn’t have time to do) focused on deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”
–Tony Palmer, chief marketing officer of Kimberly-Clark quoted in Ad Age May, 2010
Actually, Mr. Palmer was referring to K/C’s relationship with its advertising agencies but the statement could easily apply to what a progressive research/insights team wants from its research partners (take a minute and reread it with that in mind).
At the annual ARF Rethink conference, Susan Wagner, Vice President, Global Strategic Insights, Johnson & Johnson Group of Consumer Companies called for this level of servicing and said she would pay more for it. Stan Stanunathan, VP Marketing Strategy and Insights , The Coca-Cola Company said he would be interested in creating leveraged compensation models where the research agency gets a bonus for superior business outcomes (which is starting to happen with ad agency compensation approaches).
Could the evolution of advertising agencies provide footprints in the snow for the evolution of marketing research firms? If so, let’s examine ad agency evolution.
About 15 years ago, at super-agency conglomerates like WPP, the media parts from the different agencies were consolidated while the creative agencies were kept distinct. The reason this made sense, as Erwin Ephron explained to me, is that media buying is about scale much more than the creative side is. One could imagine thinking that media was like the factory and the creative side was where catching lightening in a bottle happens. So an advertiser might find a super-agency, rotate among the creative teams until they get what they are looking for, and keep the media buying consistent.
Now a funny thing happened in the advertising industry; I’m not sure that these two halves of the business evolved as anticipated. Today, media agencies are not a commodity service; they have highly differentiated offerings based on buying power, approaches, tools, and ability to impact media strategy which is becoming increasingly central to brand strategy. Media agencies are often the lead agency, have created planner teams (like creative agencies) and are even building their own creative teams supposedly to communicate more seamlessly with the creative agencies chosen by the advertiser. In other words, the media agencies have evolved such that they are also in the value creation business.
Here’s the analogy to super-research agencies. Online panels…the “factory” that executes the research is built on scale like media buying and the research account teams offering strategic thinking and branded solutions …or should be…are analogous to the creative agencies (splicing in Tony’s quote)”…deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”
In fact, the consolidation of online research “factories” is happening. For example, Kantar has built and acquired research agencies accounting for billions of dollars of billings which are served by a consolidated online research panel, Lightspeed. We also see the emergence of companies that are basically production companies like GMI and Peanut labs.
If the big research agencies were to split their businesses this way, I’d say that both pieces have impressive business opportunities. The marketing research agency’s commercial model is still mostly based on running research projects or programs efficiently and then analyzing the results from those programs. However, in the ARF Insights Value Creation Model, we see the opportunity for “synthesis” to add tremendous value. Right now, I’d say that consultants, account planners, and buyer-side insights teams are much more in the “synthesis” business than research agency account teams, but if research agencies cultivate new skills in their account teams and ratchet up their offerings they can compete by providing a whole new level of business impact. There an opportunity to create a new type of research and insights firm with a high level of expertise at finding the “so what”.
Panel operations “companies” would have three great opportunities. Improve online research data trustworthiness, develop strategies for obtaining representative data from hard to research consumer groups, and offer effective and efficient access to these capabilities to the broad research community.
At the ARF Research Transformation initiative, research firms are having this much needed conversation collaboratively with their clients about the future of the research ecosystem.