MARKET RESEARCH: RESEARCH REVOLUTION - Telemarketing, client databases and the internet are all challenging traditional market researchers to cut through the data

Telemarketing is one of the fastest growing industries in the UK, a

cheap and effective way of both selling products and of gleaning

information from customers. Client companies, meanwhile, are building

marketing databases, able to record and analyse every transaction going

through their books.

And just a click of the mouse away is the internet, the biggest filing

cabinet, or dustbin, of human knowledge ever conceived.

These are three developments which are adding to the flow of information

available to marketers - stressed out individuals who, it is often said,

are already drowning in data. Arguably, with these new resources, they

should be cutting their traditional research budgets.

Far from shrinking, however, UK market research continues to grow at

about 12 per cent a year, according to the British Market Research

Association (BMRA) and other surveys. In a society desperate for

knowledge, it seems that almost every threat to the research industry

becomes an opportunity.

Bits of business may be lost here, but they’re more than outweighed by

gains elsewhere.

There’s no doubt that the business is being shaken up. Steven Jagger,

managing director of GfK Great Britain, believes there’s an

unprecedented array of challenges. From fieldwork - where cost and

recruitment problems are causing companies to abandon their own field

forces - through to the needs of clients who are getting more demanding,

specifying research which can give more meaning to information and

looking for analysis over and above research results.

Not to mention the internet, which as well as providing clients with an

ocean of data, allows it to be sent around the world, making for

competition from faster and cheaper operations in developing countries.

Since clients are operating on an international scale and savings can be

made by the research companies doing the same, many of the answers may

well come from international research operations.

’There will be a lot more global partnerships in areas like ad tracking

and NPD testing, with the emphasis on speed. Clients will rely

increasingly on five or so key measures. In fact, much of the focus in

research will be on key numbers, as quickly as possible. I just hope

people remember that any market research needs thinking about, and we

don’t end up simply churning out the data,’ Dave Phillips, marketing

director at Research International, says.

The chief executive of Taylor Nelson Sofres, Tony Cowling, also thinks

speed will be of the essence. ’Historical information will be found on

databases. Market research will be pushed more into providing fast

turnaround on up-to-date information, such as what happened on TV last

night, or how many people responded to my ad in the first 24 hours.’

But research is just like every other industry, having to cope with

today’s fast-changing environment. In this respect, it’s illuminating to

see how research has responded to the new sources of information

mentioned at the start. Telemarketing is the easiest to deal with.

MORI’s chairman, Bob Worcester, dismisses it as ’crap’, and says that

people who have been trained as telemarketers do not make good

researchers.

Even so, there’s every chance that telemarketing will nibble away at the

edges of market research. It’s tempting for companies with big customer

relations call centres to get their operators to ask a few research

questions in the course of their work. When Tesco won a special award

from BT last year for its commitment to telemarketing, for instance, it

was stated that research, previously bought from third parties, was one

of four roles handled by its Dundee call centre.

Jeremy Hall, planning director at Bates Communications, says the skills

a market research company can offer mean they are the obvious people to

work on relationship marketing programmes. But problems arise because of

the codes of conduct. The MRS code means that information cannot be used

on an individual level. So, despite the importance of those honed

questioning skills, he believes that in some ways telemarketing is

winning the race to capitalise on the relationship marketing arena.

However, Phillips says that it’s small companies who see no on-going

need for research that are the most likely to ask telemarketing bureaux

to conduct a survey. Professional skills are particularly needed to

eliminate bias and ambiguity from questionnaires. But these services can

be provided by consultants. ’We’ve done it,’ acknowledges Oliver Murphy,

joint managing director of the mainly qualitative shop, Diagnostics

Social & Market Research.

Databases, too, provide information that might replace some commissioned

surveys. Support for the researchers, though, comes from a surprising

source. Mark Patron, managing director of Claritas, one of the leading

providers of lifestyle data on millions of households, says they still

hold the intellectual high ground, and their methodologies are

sound.

The challenge they face is to know how to answer when the client demands

to know how their research will affect his bottom line.

’Database marketers often confuse customer segmentation with market

segmentation,’ he adds. ’Analysing a customer database will only ever

tell you about existing customers. Understanding the market as a whole

requires more objectivity, which has always been the researchers’

strength.’

Major research companies have been quick to embrace the new wave, Patron

says. Companies such as Taylor Nelson Sofres with Superpanel, and BMRB

with TGI, hold masses of in-depth information on thousands of anonymous

consumers. This can be fused with the much thinner data held on millions

more known individuals by the lifestyle database companies such as

Claritas, Experian and CACI. The result, in Patron’s view, is ’the best

of both worlds’, a much improved model of the market.

Smarter technical analysis creates a need for reasoned analysis. ’What

clients need increasingly is insight rather than more data. Just a few

brains that can look across information from agencies, customer service

departments and internal databases, and put it all together,’ Wendy

Gordon, director at the research company, The Fourth Room, says.

As for the internet, it’s true that in some instances clients may be

able to locate and download the information they’re looking for, and

avoid the need to commission fresh surveys. However, the research

companies brush this aside as a minor irritant while they contemplate

the opportunities presented by the web.

The internet is actually creating new business for research

companies.

For example, major client companies take their websites very

seriously.

The sites are a major investment, they have a long life and, for better

or worse, they project an image of the company. MORI is just one of

several research companies providing evaluations of websites based on

interviews with users.

Secondly, the internet is a new medium. Taylor Nelson Sofres, the UK’s

biggest research company, is heavily involved in tracking conventional

media around the world, especially TV and radio. Its chief executive,

Tony Cowling, points out that many of the things his group already

measures - such as ad expenditure, penetration, share of voice, reading

and noting - will also have to be measured on the internet. The group’s

am@ze division for international research is already offering this under

the name Adnet Track.

The French and German groups, IPSOS and GfK (both with UK offshoots),

are approaching the question from a different angle. They’ve formed a

joint European venture with the US company, MediaMetrix. The aim is to

recruit a panel of internet users and instal software on their PCs to

track which websites they visit - data which can be linked to

information already recorded about the household.

And this is without mentioning the prospect of using the net as a

vehicle for conducting research interviews. Admittedly, this has been

slow to get off the ground because it’s dependent on the penetration of

computers into the home. But the leading research companies, including

Taylor Nelson, Research International and GfK, are starting to build

panels of people with internet access.

Research International’s Phillips is quick to admit that there are

difficulties.

’It raises again all the known questions about panels,’ he says. ’You

get a disproportionate number of empty nesters, but it’s hard to recruit

youth or business people who are heavy travellers. Even in the US, there

are important groups of consumers who aren’t online, and won’t be in ten

years’ time. Maybe it will happen when the fridge, TV and PC come as a

single unit!’

This is the reason Research International provides internet access to

some recruits as it sets up a panel of 200,000 US households. There are

plans to roll out this project across Europe and Asia Pacific.

’Internet research will reduce the cost of everything, just as telephone

research did when it was new,’ Cowling says. ’People will complete

questionnaires, virtually for free, and the analysis will be speeded up

because it will happen online.

’What must be remembered with all these developments is that there are

still some very real skills involved in conducting research. Clients’

DIY surveys will undoubtedly increase, but there are many circumstances

in which the fact that research was carried out by a reputable and

independent research company adds greatly to its value.’

Top 10 BMRA members 1997-98

Total    BMRA members ranked by                  1998   %Growth

ranking  sales turnover                        pounds   1997-98

1        Taylor Nelson/Sofres              96,550,000      10.1

2        NOP Research                      73,769,000       6.2

3        Research International            62,334,000      18.9

4        Millward Brown International      55,621,000      16.1

5        BMRB International                31,824,000       9.4

6        IPSOS -RSL                        28,931,026      12.4

7        MORI (Market & Opinion Research

         International)                    19,671,000       8.1

8        Information Resources             19,534,000      14.8

9        MARITZ - TBRI                     19,284,000       3.2

10       MBL                               15,967,351       5.9

This article was first published on Campaign