Arising and even resulting from the GFC, has been the rapid growth of dynamic small and medium sized research agencies. Most have innovative approaches and distinctive cultures, offering exciting workplaces to their staff who repay with high commitment. Yet this very success makes them prime M&A targets and many will, in the next few years, be bought out. Is this bad for their workforce, and how should these loyal employees react when acquisitions happen? A recent article from Asia-Pacific focused of the plight of researchers whose companies were sold on by management. In essence, the hapless researchers were portrayed as helpless victims whose utopian world was dissolved by forces of evil, represented by the faceless conglomerate. Read On..>
A recent Research blog by my ex-boss, Nick Sparrow, founder of ICM, extolled the virtues of offering equity to agency staff. In fact, it was Nick who taught me in the early 80’s how to sell research based on its benefits not its features (which given my statistician’s focus at the time was a revelation!)
Nick expounded his vision of a business “run solely for all the people employed” where a company is best run, and gives the best service to clients, when the people feel a sense of ownership. It’s interesting to note that two of the UK’s ‘thought’ leading agencies (both of whom have won Agency of the Year) Brainjuicer and Truth appear both to have embarked on similar ownership structures.
Although, ICM was owned by 10 shareholders before its sale, Nick was interested to see research businesses go further and make all employees shareholders. Here the clients benefited as their interests were best served and reinforced by the servicing team who in turn profited from satisfied, returning, regular clients. Read On..>
A few years ago it seemed that the big advertising and media groups were on-track to dominate the Market Research industry – Aegis with Synovate, and WPP with, well, almost anything they could get their hands on.
Recently private equity has also developed a strong interest in information companies, currently with ORC and perhaps most notably with the buy-out of Nielsen. We’ll surely see more from private equity investors in the next decade, but I’m guessing that we’ll see some other interesting trends in the control of marketing research.
One will probably involve the growth and expansion of Asian market research companies. But I’d like to address a more dramatic scenario: the likelihood that those who currently serve and partner with research agencies may come to dominate, or even own them.
As a recent refugee from the world of big corporates, I’ve been fascinated to observe attitudes to the “majors” in the rest of the Market Research community. Often they are portrayed as monoliths run by corporate “bean counters” who, while fundamentally uninterested in research quality, nonetheless somehow steal the best clients leaving “decent” smaller MR companies with nothing but crumbs. This kind of “Walmart versus the family store” characterisation is, I am afraid, as superficial as the original retailer version.
In fact some of the advantages ascribed to the majors are not as significant as might be thought, and a change of focus by mid/smaller companies could help them become more competitive. Without giving away too much, the guts of my advice to them boils down to: “lusting after your rich neighbour’s glitzy clients will only cause problems”, plus a suggestion to “have lunch with someone you have little in common with, and whose approach you may not particularly like”.
Once market research agencies were simply “suppliers”: brought in when clients had a specific research need, often forgotten as soon as that need was fulfilled.
But agencies (and even some clients) yearned for more than these fleeting and unsatisfying encounters. We wanted to encourage fidelity, and to demonstrate the virtues of long-term stable relationships. Nowadays we all talk “Partnerships”, “Key Account” managers abound, and often elaborate client servicing structures have been developed. Yet, while we all understand the theoretical value of genuine partnerships, I’m not convinced that things have changed all that much or that many client-agency partnerships actually yield the value they should.
Here’s my take on three big issues that get often in the way: