Do we focus too much on what clients say? Should we focus more on what they do?

In recent online discussions, for example in LinkedIn and on the GreenBookBlog, there has been a growing number of research buyers talking about what they are looking for from research agencies, and the focus seems to be people. In particular, clients say, they are particularly seeking agencies who have people who see the big picture, who can synthesize multiple types of data, and who can create an engaging story to convey the insight. At ESOMAR Congress this week there were three presentations (from DVL Smith, Ruby Cha Cha, and a Truth/Nokia combination) reporting the same thing, including two studies amongst clients which played down the importance of brute force and scale, and which extolled creative synergy.

But, as researchers, we rarely believe that consumers can tell us what the motivations of their behaviour are. It is generally agreed that people can’t describe their own decision hierarchies – as Mark Earls says, we are poor witnesses to our own motivations. And, since clients are people too, why do researchers so often take what clients say at face value?

When researchers can’t be sure about what people mean, we look at what they do. So, let’s look at the recently published ESOMAR Global Market Research Study, to see what clients are doing (noting the 2013 is based on 2012 data). The change in spending over the last few years, and over the last 12 months has been away from the boutique companies, away from the insight consultancies, and towards the biggest agencies. The largest six agencies now account for 41% of all spend (up from 39% the year before). Interestingly, some would say depressingly, quantitative research grew by 1% and qualitative research fell by 1% – indicating a shift, potentially, from insight to bean counting. Looking at the breakdown by category, 40% of spend goes to the classic auditing and counting categories of Market Measurement (18%), Media/Audience (8%), Customer/Stakeholder Feedback/Satisfaction (7%), and Ad/brand Tracking (7%).

So, whilst some clients are clearly looking for the story telling insight diviners, and whilst many more are looking to make some use of insight specialists, the trend is away from what clients say they want and towards the large, scalable, data heavy solutions.

Some people will make the point that the traditional definition of market research used by organisations like ESOMAR ignores the competition from big data, social media companies, none MR uses of online communities, and a variety of innovative new ways to gain answers about consumers. However, almost all of these new channels are data heavy, people light – if they were included in the ESOAMR figures they would represent an even stronger trend away from what clients are saying to what clients are doing.

Why do clients say they want more big picture, story telling, synergy, when that is not what they tend to buy?
IMHO, clients do want the nice things they list in discussions and survey responses, such the ability to see the big picture. However, they don’t prioritise these over the things they feel they need, like large scale, structured, scalable data. Company insight managers are often mandated to audit usage, to measure satisfaction, and to track the performance of their brands and advertising. These core requirements can eat up well over 50% of research budgets, especially when system approved methods of NPD, concept, and ad testing are added to the list.

I am sure clients would like their big research projects to come with extra insight, interpretation, and explication. However, these extra levels of service make an enormous difference to the price. As the automation of research improves, the data becomes cheaper, making the analysis and interpretation seem ever more expensive. These days trimming the budget by reducing sample sizes only makes a modest impact on the cost, but reducing the analysis and reporting (i.e. the people costs) makes a big saving – so most clients, most of the time, protect the sample size and the survey length, and cut the analysis back.

The good news
The insight driven, people focused part of market research may be a small (and possibly declining share) of market research spend, but it is still large enough for small and even medium-sized agencies to specialise in it. Ethnography, Behavioural Economics, neuroscience, crowd-sourcing may be niches, but for the people who buy from and work in those niches, they are rewarding.

Another bit of good news is in the area of communities, which the ESOMAR report says are growing at over 30% a year. This a route that blends scalability and the ability to work closely with clients to synthesize a big picture – which is why I spend so much of my working with and talking about communities.

Two Industries?
At the ESOMAR Congress I asked the question about the gap between what the researchers reported clients said and what the data showed they did. The best answer, IMHO, came from Kristin Hickey of Ruby Cha Cha who simply said there are two MR industries. There is the large, factory like, continuous measurement and audits business, and a much smaller value-added, ad hoc, boutique business. I think this is a good way of thinking about the industry. Innovations like passive data collection, automated analysis, big data etc are likely to have profound effects on the factory type of research – increasing its reach, granularity, and reducing its costs. The other more boutique sector will, in all probability, focus on its people, its ability to work with multiple sources to create solutions. Prices in the second sector will continue to increase, and timelines probably won’t get much faster, because the limiting factor is people, by which I mean good people, well trained, and well supported.

Your thoughts? Do we live in an increasingly bifurcated industry, where the larger part will become ever more automated, and a craft part that prospers in its own terms, but will always be smaller, more expensive, and less real-time?