Larry Friedman and I both live on Long Island so we decided to have a cup of coffee one day which led to the idea of me interviewing him about the future of our profession. Larry spent 35 years in market research, the last eight as Chief Research Officer for TNS in North America. Over his career, he developed new methods of brand research, and consulted widely with senior client management on the strategic uses of marketing information before retiring. Larry can be reached at firstname.lastname@example.org.
1. How do you think custom research will go beyond “the survey” over the next five years? What data streams will researchers bring together?
Traditionally, researchers assume that the data needed to answer marketing questions don’t already exist, so therefore we need to “create” the data, usually through surveys . Given the fact that people increasingly live their lives online, there is an enormous amount of information about what people do, what they think, and what they say, that is “out there”. We’ve seen accelerating interest and experimentation among forward-looking researchers in making use of data in the social and digital spheres to answer marketing questions.
We’re seeing some real successes with the experimentation to date, for example, with using social media discussion data to predict business results. I’m thinking of the academic work by people like Moe and Schweidel, and the commercial work pioneered by TNS (and presented by myself and global colleagues at different conferences over the past few years before I retired). This work is starting to spread further and commercial momentum is building.
Based on the progress to date, I have hopes that in five years we get to a place where the industry mindset is no longer “what questions should I ask in my survey?” but “what is the right type of data and where do I get it?” And yes, sometimes surveys will be part of the solution, but they will be shorter, more focused, and integrated with social and digital data.
2. What do you think the main benefits will be of using these new data streams, both to market researchers and to the larger businesses they serve?
If our goal using social and digital data was merely to replicate what we can already do through surveys, but maybe do it a bit faster and cheaper, that would just be a “stupid pet trick” as far as I’m concerned, and not worth the effort.
For me, the real potential benefit is to take market research beyond the world of “insights” and bring it into the world of “action”. Let me give you just a couple of examples that I shared at my last IIeX presentation before retiring.
Tracking, for instance, can be transformed from telling us what happened last quarter to telling us what is going to happen next quarter, and what specific actions the business should take given those predictions.
Survey-based segmentation can be very insightful about defining targets for a brand, but in many cases it is difficult to buy media to specifically reach those attitudinal targets. TNS has pioneered ways to make use of lookalike modeling based on the digital behavior of those attitudinal targets, and then partner with digital agencies to focus on delivering ads to millions of people who are like those survey-based attitudinal targets. This has enormously increased the efficiency and effectiveness of digital campaigns where it has been used, with real business results.
I think that these types of capabilities have the potential to transform the role of research/insights departments. “Insights” are valuable, important and respected, but unless you directly speak the language of action, you just don’t get a seat at the grown-up table where real corporate decision-making gets made.
3. That sounds pretty inspiring to me, what do you think could hold market research back from realizing that future role you just discussed?
First of all, we’re not the only ones aiming at this goal. Consulting organizations are also working in this direction, but it isn’t clear to me that they have the technical expertise to bring it off. There is a staggering amount of VC money being invested in Data Analytic and Social Analytic startups (as Cambiar has been documenting the past few years), but I wonder if they have the marketing savvy that is needed.
Having said that, there is no necessary reason to think that market research will be the “winner” (if that’s even a reasonable term to use). From a market research perspective, we have enormous training and investment challenges. Profit margins of traditional market research companies have been squeezed by clients (and new survey capabilities like Google Consumer Surveys), so will they be able to make the investments needed in people and capability to make the transformation while keeping existing business going? Client organizations have their own challenges in investing as well, as Simon Chadwick of Cambiar has recently discussed. Finally, digitally-savvy marketers can get a lot of data themselves through A/B testing and other means, and may not feel the need to rely on researchers.
4. What do you see as some of the next big development areas that will help market research make the transformation you discuss?
There’s been some really good quantitative work done, but there are still many technical hurdles to be overcome before social/digital data become part of everyday practice. One of the big challenges, especially, with dealing with large digital /social data sets with literally thousands of variables, is that it is easy to find many spurious correlations, especially if you take the “dump it into the hopper and see what comes out” approach. Market researchers will need to approach these large data sets with real hypothesis testing in mind, more like social scientists than I think many are used to. In other words, theory is going to have to start catching up to quantitative capabilities.
One of the more theoretical areas I’m interested in has to do with understanding the social processes that underlie brand decision making. We’ve known for a long time that in certain categories like beer, brand choice is strongly driven by those around you (“I’ll have what he’s having”), but given the burgeoning presence/importance of social media, how is this changing over time across other categories, and how can brands benefit from these processes? Market research has always been focused on individual decision making; I’m a social psychologist by training, and I think the time is ripe to get a better grip on the importance of more social factors. Mark Earls has done some nice work in this field, but I think there is a lot more we can do.
5. Now that you’ve retired from TNS, what’s next for you?
I always told my clients that there are two things I can be trusted with absolutely: How to analyze data, and what wine to have with dinner. Let’s just say that since retiring, I’ve been more focused on the latter than the former. I am planning to share some new ideas with the larger research community from time to time. In the meantime, if you see a dark blue Corvette blowing past you on the highway, it will be me.