“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.

I will then moderate a panel of other leaders, Gayle Fuguitt Vice President, Consumer Insights, General Mills;  John Forsyth Principal, McKinsey & Company, Inc.; and Susan Wagner VP, Strategy & Insights, Johnson & Johnson who will demonstrate that Stan is not alone; other leaders also believe the time is now.

Research transformation isn’t just about changing a department; it’s about being an agent of change for the culture and beliefs of the whole marketing organization:

1. Stop thinking of people as consumers and start thinking of them as humans.  The word “consumer” is marketing-ese for slicing off that part of daily living that relates to what you can sell someone and throwing away the rest.  That keeps you thinking in the box.  Stan from Coke says, “When you study consumers you get incremental ideas; when you study humans you get breakthroughs”.
2. Move from a control mentality to an influence approach.   Brand teams no longer control brand messaging thanks to the web-based social media infrastructure. Ask Motrin, or now Toyota.  Research departments no longer control the flow of information about consumers.  Marketing teams can search Twitter, or go to digital analytics, or…  Are you ready to do what Vitamin Water did, where they let their fan base in Facebook design the next new flavor?  Are you ready to let go?
3. Think of research as a source of anticipatory insights rather than just testing and measuring.  The risk reduction and measurement parts of what research does are important but those are downstream activities. The insights team needs to be thought of as an insights engine that builds strong brands and durable customer relationships.  We do more than quantify the expected; we also listen for the unexpected, bringing breakthrough ideas that inform strategy.  If the insights team is thought of this way it will be brought into to business issues at the start and regarded as an investment in the future of the business, rather than just an expense to be managed down over time.

What a different corporate environment!  Creating a fast learning organization where ideas can come from anywhere and where every test has a learning objective not just an action standard!  A way of working together where the insights team is integrated into business leadership teams, where we are part of and potentially lead the social media cross-functional teams, and where the voice of the human is brought by research into every marketing decision.

We are not just being quixotic about this.  The ARF is launching a Research Transformation Super-Council and along with those speaking on March 23^rd, we have leaders from great organizations like Unilever, Kraft, MTV, Cambridge, Cambiar, Colgate-Palmolive.  The super-council will have working committees to map out the transformation blueprint for organizational impact, creating insights-led strategies, and a working committee that will tackle engagement/talent/process.

This is our time, but with it comes the responsibility to up our game, to become leaders rather than just technicians and analysts, and to leverage what we know about humans (cognitive science, behavioral economics, anthropology) to bring insights that shape the strategic glide-path of the organization.

I hope to see you on March 23^rd at the ARF annual Re:Think conference, Succeeding in the New Normal for the start of this phase of our journey together.

Online research panels proven to produce different results

The ARF foundations of quality research compared results from the exact same questionnaire across 17 online research panels (including all of the big ones) fielded at two different points in time (2 weeks apart).  We found that the test retest reliability of each panel was high but that results differed across panels by more than you would think based on sample sizes (n=2,000 per panel per wave).  This insight led to the ARF Quality Enhancement Process, a series of metrics, planning, and reporting templates intended to control for this effect.

Cell phones are primary for close to 40% of US households

The most recent CDC NHIS survey found that 23% of all US households are cell phone only (46% of those aged 25-29) and another 15% have landlines but are cell phone primary.  We are changing the way we connect.  Landlines have become less important than cell phones and for many, talk is becoming a less important method of communication than text and social media updates.

The Media Ratings council has said that media research must have a solution for this, implying that landline-only research can no longer be equated with probability sampling.  Nielsen, Arbitron, and Knowledge Networks have all switched to addressed-based sampling methods to restore probability sampling properties.

Listening becomes a source of insights and marketing intelligence that anyone can access

Listening is a way of hearing in real time what people WANT to talk about, rather than what marketing wants to talk about.  People express themselves in their own words rather than the interviewer’s vocabulary.  Google’s team of economists proved that what people are searching for predicts many things from the geographic spread of the flu to auto sales right down to the brand.

Marketing research is no longer a gatekeeper to rich consumer insights as marketing, customer care, corporate communications, agency of record planners can now can tap into Twitter, forums, etc. directly. Only by listening would J&J have known they needed to pull the Motrin campaign.  One of the Ogilvy Award winners, the NBA, needed listening to find the way fans’ express and share their passion.  The research team must embrace listening as well as asking (i.e. surveys) to remain relevant and get to the front-end of marketing innovation.

Marketing research still struggling to be recognized as having significant impact

The ARF research transformation initiative has brought many leaders together and conducted executive interviewing in 2009 among 20 research leaders.  The consensus is that the research team is often brought in too late in the process, viewed by many below the C-suite as an expense rather than an investment, and as an impediment rather than an enabler.  We must prove that research creates an indispensible runway between the consumer and the boardroom that leads to making the right calls on big, future-focused issues that result in business growth.

Media companies and advertisers form CIMM

The leading media companies and advertisers came together to create the Coalition for Innovative Media Measurement, making a clear statement to the industry that they intend to turbo-charge innovation in media measurement.  Why?  They believe existing media metrics are not keeping up with the fast-paced evolution towards the multi-tasking, multi-platform, long-tail way that people consume media.

Shopper research takes center stage at understanding the effects of the recession

Numerous studies about the effect of the recession focused on changes in shopping patterns and increases in buying store brands.  In other words, shopper research became as important as consumer research this year, especially on the big issue that was keeping marketers up at night.  Marc Pritchard (leading marketer at P&G) has been emphasizing “store back” marketing.  The ARF formed a shopper insights council to inform media planning and the new era of winning at retail.  We foresee a powerful convergence of mobile and shopper marketing.

Marketers have always been more focused on brand-building than what happens at retail.  Marketing research has always been more comfortable with consumer research than shopper insights.  This must change.

Six big wakeup calls in 2009 are doing our profession a favor; refocusing us on what it will take to conduct trustworthy research, find unexpected feedback, provide anticipatory insights, measure media in a way that people now choose to experience it, and properly rebalance our understanding of how people choose brands by placing more emphasis on understanding the shopper.

This month, we are responding to Bernie’ Malinoff’s research on research that shows that the online research interface per se can have a significant impact on the answers.  For example, the use of sliders, drag and drop, etc. that are enabled by flash, for example, vs. text-based questions will produce different results for the same information and therefore might be a mixed blessing (better respondent experience but less consistent data). I believe that going from text-based to visual interface can influence results, although I imagine that this is less of a factor for constant sum or choice questions.

The larger issue is online research data quality…accuracy and consistency.  In particular, consistency is important as most brand research metrics from survey research are based on attitudinal measures that are intended to be compared to a normative database or trended over time.  Some have latched onto representativeness as the main lynchpin of data quality but the following graphic shows that there many equally important influencers that need to be managed.

If any of these factors are not matched from one wave of research to another, there is a risk that data comparability will be lost. A reason for this is that people are not effortlessly accessing memory and feelings.  They are reconstructing them for the purpose of answering a survey.  As they go through cognitive processes, things happen. For example, we know that longevity and survey conditioning matters.  In other words, if you send someone the same type of survey over and over again, you are likely to get conditioning effects that produce different answers. Note that this graphic has “Survey instrument” as a variable, which includes question order, length, scales, and must include, as Bernie points out, the graphic interface of the question.

Internet research has some huge advantages.  It is not only faster and less expensive; it offers an environment that is more native to our digital, interconnected world.  We must not shy away from finding the best way of harnessing the more realistic environment that internet research can offer.

Here are a few advantages that the internet offers for research:

• Interconnectedness.  Life has become an open-book exam where people can connect with anyone they want or search for information to research a potential purchase.  This aspect of real life consumerism can be mimicked in internet research, especially communities or prediction market approaches.
• Immersive environments. The behavioral economist Prof. George Loewenstein from Carnegie –Mellon University cautions when people are in “cold states” they can’t predict what choices they will make in “hot states”.  The internet offers the ability to create immersive and virtual shopping environments that will do a better job of getting a respondent into the right mindset.  Marketing science Prof. Glen Urban created the “information accelerator” which is used extensively for automotive research.
• Sight, sound, and motion.  For example, I remember when we used to use telephone research for ad tracking; we would ask a respondent in words if they remember seeing a commercial that showed XYZ.  Now we can debrand a video and stream it online before asking if they remember seeing the commercial.  Much better.
• Turnkey collection.  For example, some copy testing firms are automatically testing each and every TV commercial in a category using digital technology.

We need to be both cognizant of the effect of survey interface and progressive about testing the immersive and visual capabilities of internet research.  I’ll advise The ARF online research quality council to add survey interface elements to the ARF Quality Enhancement Process; it should be part of the structured conversation between buyer and seller.

He continues” “As we approach 2010 planning, companies need a strategy around listening. Sadly, most companies, and their agency partners don’t know why to listen or how. He adds that the top stages require evolving the classic market research organization.

• Social customers:  Yes, we live in an increasingly interconnected world.  Life has become an open-book exam where people can seek guidance from virtual friends in social media and effortlessly search through the accumulated knowledge of mankind for information.
• More empowered: Control is passing from the marketing and media establishment to people. No longer is content and messaging exclusively marketer-generated. People have gained control in other ways.  People have more choice as the long-tail keeps getting longer for media and purchase choices. People, not the marketing and media establishment, are in control of scheduling, as video can be viewed on three screens, on demand, or time-shifted. It’s their choice. We now live in a real-time world where the newsroom at CNN monitors Twitter for breaking news.

In 2006, Time signaled the change. Time’s “person of the year” was ‘you’ (the consumer, person, human).  Time’s rationale went like this:

…look at 2006 through a different lens and you’ll see another story…It’s a story about community and collaboration on a scale never seen before. It’s about the cosmic compendium of knowledge Wikipedia and the million-channel people’s network YouTube and the online metropolis MySpace. It’s about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes.

And we now know that this was just the beginning.  Facebook has overtaken My Space.  Twitter came from nowhere.  Consumer sharing on Youtube created a Susan Boyle and blogging and twitter took down a big marketing campaign (like the 2008 Motrin misstep).

Listening reveals insights via social and open-book approaches.  Listening is about studying the change-makers (people) in a way that is native to how they are increasingly living their lives. We must learn how to add listening to our survey-based approaches for generating anticipatory insights.

Listening for the unexpected should be at the heart of the innovation process.  It takes research from the back end and places it squarely at the front end.  It says our role doesn’t kick in only when the marketing team is ready to “order up” a concept test, a commercial test, etc.  Our role is to anticipate the next move of consumers and to help the marketing teams turn that into innovation.  Take an example.  Currently there is a tiny share of newspaper reading that occurs on the Kindle.  If this was going to take off, wouldn’t the first signs be in social media comments and reviews and in terms people are searching on?

As Jeremiah says, marketers need to know why and how to listen. The ARF’s 2010 San Francisco conference on January 28th , “Putting Listening to Work” will be about Research Transformation and teaching you how to listen. Jeremiah Owyang will talk about his eight stages of listening organizational model. We will distribute and discuss our forthcoming book, “The Listening Playbook”.  Industry leaders from LinkedIn, Toyota, Microsoft, IBM, Saatchi and Saatchi Wellness and others will show how they have integrated listening into their organizations.

Welcome to a brave new marketing world!