Rebuilding the ‘House of Influentials’

Facts International, the agency brought by Chime to serve as Opinion Leader’s field arm, has usurped its master under the leadership of Beale (pictured), who was brought in to lead Facts after a career spent largely on the clientside. While Facts performed “very well” last year according to Chime, the division as a whole delivered a “very disappointing” set of results. Beale and research division chairman Nick Lamb set out to fix that. Three months on from their promotion, and with the research arm showing a return to profit in the first half of the new financial year, we sat down to discuss where the business has been and where it is heading.

Research: Let’s start at the beginning. What was the idea of Chime investing in Facts? Opinion Leader wanted a fieldwork arm, right?

Nick Lamb: That is ostensibly correct. I thought it was a very good investment. I thought that the way the business had been run before by Barbara Lee, while very successful, had run its course and she had set up there an organisation that was ripe for development, and Chime saw that and saw the opportunity to bolt on a field and tab service to Opinion Leader.

Research: And at that time Opinion Leader was at its peak…

NL: Certainly – no question about that at all.

Research: So what happened? How did we get to a situation where the main part of the business, Opinion Leader, was overtaken by Facts, certainly in terms of profits?

NL: There are a number of factors that affected it. I think that some of the very big deliberative events that were associated with Opinion Leader’s success in 2007 didn’t repeat themselves in 2008 and 2009, but other reasons will be lost on me as I had limited involvement with Opinion Leader other than at management meetings.

Crispin Beale: I see it more as the success of Facts and the fact that in a recession people are looking at maximising their return on investment. It’s not so much the deterioration of Opinion Leader but the fact that the Facts position is significantly improved. It’s much harder when you have a brand like Opinion Leader – which has long been known as the House of Influentials. There’s a limit to which you can grow that. I would argue that those high-end, strategic-thinking, innovative, creative solutions [that Opinion Leader offers] are just as important during recessions as the more standard customer satisfaction measures or advertising and brand tracking. But when budgets are being hit and people are looking at ways of saving money, then perhaps its some of those high-end services that get pared-back. Where its essential that companies do a mystery shopping programme, say, on how their stores are performing, or where they are bonusing employees in a car dealership based on their customer satisfaction scores, than those services need to go ahead. But if you can buy those services from a volume provider, who can give you high quality at an affordable price then perhaps budgets get switched more into those. That’s what served Facts well.

Research: While I won’t dispute the rise of Facts, there has been a corresponding decline in Opinion Leader. And that decline mirrors that of the Labour party, which Opinion Leader was so often associated with, at least in the press [Mattinson reportedly served as a private pollster to former Prime Minister Gordon Brown]. Speaking to Chime chairman Lord Bell about this last year, he was mindful that a change in government might mean a change in research priorities. Labour were obviously big fans of the deliberative work…

CB: But not in the last couple of years, as Nick said. We’ve got a deliberative event running in a few weeks time in the UK, so there is still some work there. That said, I don’t think it’s so much the change of government as the economic situation we find ourselves in. I was with Fiona Wood [research director of the Central Office of Information, the UK government’s marketing arm] down at the Business Intelligence Group Conference the other week, and the message was, nobody quite knows how the COI and government spend on research will be impacted, because there isn’t a central research budget for government – it sits in all the individual departments. COI administers that, and Opinion Leader sit on the COI roster. A new government, new ideas, new priorities – there’s going to need to be some customer understanding for all that, so will that mean more or less research? I suspect what will happen is some departments will spend less, some will spend more – and it may not be the departments taking the biggest hit to their budgets that spend less on research. If they have 30% less budget, they will need to know how to more effectively spend that and what the priorities of their customers are, so they may end up spending more on research. We don’t expect there to be a complete freeze on government spending on research as both the Conservatives and Liberal Democrats have made it clear they want to get closer to what communities want and need, and how are they going to do that if they are not going to research that.

Research: Does it make it hard, though, to lead a turnaround of a business that took a lot of government work in such an uncertain time?

CB: I think it would have done if we were doing this two years ago. In the last year or so, Opinion Leader has done a lot more work with mainstream, commercial clients as well as the public sector. That mix of public and private work means that it is less of an issue. I think these are very exciting times. We’re not worried. I think there’s a good mix. There’s not just Opinion Leader and Facts, there’s Brand Democracy, Naked Eye, Caucus. Tree moved in recently on the data analytics side. We’ve got half a dozen strong brands all operating in slightly different sectors.

Research: When you were brought in to the run the division, what was the remit you were given to remake it?

CB: Chime have been very good. They have been open to our views of what we felt should be done. The view was, as a fully integrated marketing services company, it is important that there is a strong research, insight, foresight and analysis division to support the advertising, the PR and the sports marketing side. It was inconceivable that research wouldn’t be a key part of the mix going forward. We want to make the division a significant contributor in terms of the group, and our brief was how best to do that – to replicate what’s been done at Facts to the division as a whole. Chime are serious about being in the research sector. Our plan is focused on bringing in the brightest and best individuals that understand what it is like to work on the clientside.

Research: Which you’ve started doing. Recently you hired Sinéad Jefferies, the former head of Royal Mail business intelligence, to lead the research and insight business of Opinion Leader, and Gill Rumbold, previously head of CMR and marketing at Givauden, as Facts International’s research director.

CB: That has been our strategy: to say we want the best and brightest individuals, and that is what we agreed with Chime as well. We said, if we’re going to do this we need to have the budgets and resources to go out this year and steal – actively poach – the best and the brightest people from other agencies and clientside roles to build up a superteam that lives up to that old title of the House of Influentials.

Research: That all sounds quite expensive. I guess, then, Chime are willing to take the long-view on this – or at least the medium-term view – rather than short-term profit gain?

CB: It’s about getting the balance right. We have not made any redundancies or restructures on the client facing roles. What we have looked at is cost savings in areas that aren’t directly adding to the support we give to clients. We’ve looked at making savings there, and we’ve reinvested a portion of that money into senior client-facing people. Overall we’ve reduced some of the cost base, but have grown and will continue to grow the client facing roles.

Research: That’s one advantage people often cite in operating as part of a large group. You can draw cost-savings out of shared back office functions, operations, IT, HR, accounting. Is that the sort of areas you are talking about?

CB: Spot-on. That’s exactly what we have done. The challenge with the calibre of the people we are recruiting is that many are on three months or six-months’ notice, but if you want the best people you have to wait. We could just go out to all the people who don’t have jobs at the moment, but with the greatest respect, some of them – not all of them – don’t have jobs for a reason: they are not the crème-de-la-crème. We want the people that no-one wants to lose. The people we are recruiting are all then immediately being made counter-offers but that’s the kind of people we want. And it works. The work from other agencies from other clients comes because they follow those individuals: they say ‘I want to work with that person because they make money for me’. And that’s what it is all about. We’re not going to go out there trying to do a sales job and lots of marketing to try to convince people to come to us. We want people to come to us because they see we are adding real value to their business.

Research: You mentioned earlier the cuts people had made in spending on high-end strategic research. Coming out of the recession, is investment in that sort of work returning?

CB: I don’t see anyone rushing to spend money at the moment – with a handful of exceptions to that. People want much better considered research, a much clearer link to the return on investment, and they want value for money. Some of the research techniques and extravagances of the past I don’t think will ever return. People have now seen, through the recession, that they can get really high-quality insight and foresight at a lower price, and I think they will expect that. I don’t think anyone will go back to spending twice as much on a project for half the value. It sounds obvious, but I do think there are a lot of people out there who think we’ll be able to go back to what we did before, and I don’t think as agencies any of us will be able to do that. I think we need to continue improving the quality of what we offer and demonstrating more of a return on investment. But maybe that’s just because I’m an accountant and I like to see for every pound spent what I’m getting back.