Extracting value from a wealth of raw online data

Among all the talk of cutbacks, one beacon of hope has shone out. While the fall in UK advertising revenues has been in double figures, market research has proved itself to be a core business requirement by dropping a comparatively slight 4.7%, according to the Market Research Society (MRS).

“The market research industry has been protected from the recession because people recognise there is value in understanding the customer,” states Andy Moore, former insight director at Vodafone and now strategic director for research and consultancy agency Nunwood.

Clients are well aware of the need for market research to remain at their core, but budgets are under the microscope. Procter & Gamble (P&G) invests more than $350m (£235m) on consumer research every year, but Claire Gomersall, director of consumer and market knowledge at P&G, explains that her department and the agencies it works with have to continually raise their game to justify such a large investment.

She says: “In tough economic times, it is more important than ever to be in touch with our consumers and markets because our customers are facing tough choices and more life changes. We want to understand how to serve them better through these changes. But of course our research budgets have faced the same type of scrutiny as all spending and so we need to raise our expectations of ourselves and our research suppliers.”
As well as clients’ overall thirst for information, technological advances have boosted the market research industry by allowing the sector to innovate in a number of areas.

Several online trends have provided market researchers with large volumes of data at a much lower cost. Techniques previously viewed as expensive and niche, such as the use of fMRI scanners for neurological projects, have come down significantly in price.

But as digital and technological advances become more widespread, so too has clients’ scrutiny of their value. Although market research has proved its worth to marketers’ core business strategy, budgets remain tightly squeezed.

“The industry is rebuilding and rejustifying itself with a strong focus on value for money. The focus is on return on investment because clients feel it is something they can measure,” reports MRS director general David Barr.

The insight imperative
Although there is a shortage of funds to go round, there is an abundance of information available. Where once a client would devise an online survey to extract information quickly, now they can simply listen to the consumer cacophony on social media. “There has been a scramble to get hold of blogs and Twitter content. However, getting hold of raw information is interesting but not great for insight. Getting a feed of what people are saying about your brand without insight doesn’t give you strategic and actionable information,” he says.

Alistair Leathwood, managing director of research agency FreshMinds, elaborates: “Trying to build online communities where consumers can talk about you is interesting.”

But he pleads with marketers not to rely on the information gleaned from these communities. “Tracking social media can tell you what is going on, but it’s quite imprecise. Overall, it’s just a sensible way of gaining another perspective.”

To some, this is evidence that there is now a true distinction between raw data and insight. “Our industry needs to be careful not to mistake data for insight; we don’t need more data, we need more pattern recognition, understanding of drivers, integration of data from multiple sources and insights that point us to change the way we’re doing something,” says P&G’s Gomersall.

This in itself has thrown up an interesting dichotomy between what some clients want and what agencies want to provide. For some, the market research agency is there simply to provide quality data. The client wants to be sure that its information is from the best sources and it is as clean as possible. However, some brands feel that the interpretation of that data and its relevance to brand strategy is best left up to them.

In contrast, others feel that the interpretation of data and its relevance to the brand business case is as important a function of the market research agency as the collection of data itself. In fact, they view the latter as the bare minimum in terms of servicing the client’s account.

Lightspeed Research global chief executive David Day says: “There is no question that certain clients with in-house insight teams want to focus on excellence in collecting data. But historically they see these agencies more as a commodity. A current trend is that now clients recognise there is a variety of standards out there, they are looking for both value and excellence.

“But on the other hand some clients are asking us: ’What does this data mean?’ and ’How do I distil this into insight?’ These issues require us as agencies to understand exactly how the clients operate.”

Paul Say, head of marketing at First Direct bank, adds: “For us, the information and how it is collected is all a hygiene issue. As is having it presented in a clear way.

The point of differentiation comes from the people that a [market research] agency can provide and their ability to work with us to answer the business case. We expect them to provide not just numbers but insights. In some cases, we even want them to help us decide what questions to ask. That is their expertise and their unique selling point.”

Emperor’s new clothes?
It is for this reason that agencies need to be wary of selling technological innovations as the next big solution to research questions. Where once the prospect of using hospital grade scanners and eye-level scanners to capture the consumers’ unspoken thoughts seemed futuristic, and even downright sexy, there is a new realism to contend with. There is an argument that says despite the increased capabilities of many technologies, including the new generation of smartphones, the key is in not trying to overthink the issue. Stephen Phillips, chief executive of Spring research agency, warns: “Technology works really well when it enables you to do something that you’ve always wanted to do. When we use mobile as a solution, for example, we use simple texting rather than mobile internet because we want people of all ages and technical ability to be able to participate. There’s nothing to be gained from making it over-technical.”

TNS-RI chairman Paul Edwards cautions against being blinded by science. “With things such as neuroscience, it is very difficult to know what you are getting. It is certainly overcomplicating the issue if you are just trying to find out if someone likes Pepsi or not. There is a lot you can do much cheaper.”

Equally, the use of online as an inexpensive and speedy source of data must be approached with caution. Lucy Burnham, managing director of SPA Research, insists the important question to ask is “what is my business goal?”

Gomersall at P&G adds: “Technology isn’t valuable in itself; it needs to be married with solid research methodology and embedded in a business process to influence marketing decisions.”

So as the market settles down to some sense of normality following a rollercoaster few years, what do clients expect from the market research industry? And are the agencies in a position to be able to provide it?

Gomersall is unequivocal when outlining the client’s post-recessionary research needs: “We need suppliers to deliver innovation beyond traditional research to support new marketing models and evolving consumer behaviours and choices. The industry needs to learn to leverage this conversation to uncover insights, to co-create with consumers differently. Until we start to see disruptive innovation from our agencies, we will continue to lead this internally.

“Accountability is driving continual improvement, working to increase the precision of results. We need suppliers to understand what we need and deliver on the needs proactively without ’being told’ what to do and how to do it.”