The drop in UK market research spending indicated by the 2019 Q3 IPA Bellwether report – minus 17% – is alarming. Whilst it’s not reflected by data from the latest ESOMAR Global Market Research Report (the UK market is growing +1% 2018 vs 2017), the IPA data is much more recent – so it makes one pause (panic?) and think: what’s going on?
Consumer centricity is the key to competitive advantage: we read this again and again. So why not invest in MR?
I’d venture two causes beyond companies taking data analysis in-house, including DIY and data-mining:
i) the huge switch to digital communications
ii) an ongoing focus on short-term sales activation.
First up: the switch to digital
According to analysis from e-marketer, a huge 66% of all ad spend in the UK in 2019 was digital. Digital continues to fuel global growth in ad spending, analysts predict this trend to continue.
Many (all?) digital campaigns are evaluated in real-time and at zero cost simply via the metrics generated. A/B testing is an available option: it’s possible (and sensible) to use behavioural metrics such as click-through rate to get a steer on which copy version to go with.
You don’t need to talk to anybody – and by the way there’s neither time or money for that.
Add to this the huge array of totally personalized data that some social media channels offer advertisers in some countries: if you know all about your customers’ needs and wants via Social Media channel data, why invest in anything other than trying to offer them something tempting to buy? Behavioural insights seemingly remove the need to explore motivations.
Secondly: the focus on activation over brand-building
It’s now roughly six years since the ground-breaking work by Les Binet and Peter Field was published in their book The Long and the Short of it. Alongside much great stuff, there’s one very clear recommendation: an optimal media mix is 60% in brand-building, 40% in activation. It gets quoted widely.
But perhaps to no avail?
Maybe lots of marketing folk (in the UK at least) are ignoring this rule of thumb, concentrating on the short-term, immediate results, and using proven digital tools such as paid search. Maybe it’s the economy, stupid, and needs must.
Taken together, this combination of digital fascination and short-termism is a potent mix, and one that is deadly for brand health in the medium-term – and market research even faster.
So: time to push back on the insight front, and what I’d call refocusing on stuff that is further up the brand funnel.
Firstly, on the anecdotal: the evidence that digital targeting has come on leaps and bounds is weak. So much stuff that e-commerce throws at me digitally seems just a repetition of what I’ve just bought – often borderline insane it’s so off my needs. Maybe that’s a middle European perspective where personal data is protected more tightly than say in the USA.
More tangibly and forcefully: a case study presented by Simon Peel, Adidas’s global head of Media, at the 2019 Eff Week conference in the UK outlined how the company over-invested into performance marketing at the expense of brand-building: their brand/performance split was 23:77 – far from the 60:40 recommended by Binet & Field. They relied on last-click attribution analysis, and over-invested in paid search. Put simply, they had the wrong metrics.
This was uncovered “when a breakdown at Google AdWords and therefore inability to invest in paid search didn’t lead to a dip in traffic or revenue coming from SEO.”
The adoption of econometric analysis helped – I quote: “This has uncovered some valuable insights: most revenue comes from first-time buyers, not loyal customers”.
You can read more details here.
So what does that mean for research? Some observations and shout-outs:
Firstly – companies need to accept the Binet and Field balance of expenditure and get (back) to 60% brand, which likely means TV, outdoor, video….balancing brand with activation stuff. The one needs to feed the other.
Then we have to hammer it home: spend more time on proper diagnostics before you leap into action, and yes invest in research that is well-considered AND actionable. That costs both time and money.
Paying lip service to research is still surprisingly common –
the damage is likely difficult to isolate and certainly undocumented.
Whether its online or offline, qual or quant, professionally executed research delivers value – it gets to the real drivers whose mental inaccessibility Behavioural Economics taught us all about.
Moving on: to be truly valuable, the balance of insights spend needs to shift to more strategic stuff – foundational studies, ethnographies and immersions. And yes, econometrics. The back-end of the insights-funnel, away from tactical optimisation.
Econometrics is a great example of a hard, holistic, strategic and behaviorally driven insights tool – the process can be onerous, but rewarding. I hope that folk higher up the management echelons are reading studies like the Adidas one – folk who are paid to manage the medium and long-term, increase the value of their total assets, including brand.
Qual research is very different but eminently powerful in generating and modifying hypotheses – done well, using online and offline, mixing conversations with observations, it’s invariably extremely revealing, gets to the “why” sensitively, and can reveal lots of input on brand and communication strategy.
Then: focusing on potential new users and getting to their drivers is underplayed in my experience. Spend here needs boosting – attracting new users is often what drives popularity and growth. Ehrenberg and Byron Sharpe are two sources of expertise here.
Finally (in the interests of brevity), take the time to get in touch with your customers – get away from digital dashboards, close the laptop, and invest time and money in living in the world our customers do. Immersive qual research can help massively as an eye-opener.
Just because something is measurable doesn’t mean it’s effective.
And to quote from Mark Ritson who himself quoted the great David Abbott at the 2019 Festival of Marketing: “s##t that arrives at the speed of light is still s##t”
So: in the hope that whoever is reading this, please spread the word: we need to get insights investment back on the agenda, ditch legacy perceptions of market research (slow, not very useful), talk to our customers more rather than just sit and analyse spread sheets.
If we refocus further back up the funnel, the future will look brighter, even if the next quarter still holds much of our attention. Myopia was never good for anyone.
Curious, as ever, as to others’ thoughts.