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Friday, 31 October 2014

In-house analysis: An analysis

Last week it was revealed that the Canadian government had started analysing the results of some surveys in-house rather than relying on research agencies, as a cost-saving measure. It “not only saves analysis and reporting costs,” said a spokesman, “but also permits tracking and comparison of results over time”.

What the spokesman didn’t say was that the government may not be getting the required value from externally commissioned analysis, which is why they are bringing it in-house. It’s something commercial buyers have started noticing.

In a comment on our original article on the story, an anonymous research manager at a large UK retailer said: “I’m frequently finding the value that we receive from agency analysis and the insight they apply simply doesn’t pay for itself.”

Another buyer, this one a research manager for a telecommunications firm, told Research that cost-savings were unlikely to be a motivating factor in moving data anlysis in-house. “The salary of a full-time executive doing the data crunching could be seen as the equivalent of the fee an agency would charge,” they said. “We’re not talking massive cost savings by any stretch.”

Cost–benefit analysis

Clients are finding, though, that bringing analytics skills in-house can be a revenue-generator, if not an immediate cost-saver. By forcing internal teams to take ownership of the data and the resulting insights it becomes incumbent on them and others in the business to act on them. It’s about knowing your stakeholders and customers better than anyone else, as one insights director at a major soft drinks manufacturer explains. “The best way to understand what your stakeholders are saying about your brand is to take the time to understand any insights you get. Purely relying on an agency analysis is not sustainable – you have to mine it yourself and make your own conclusions to take your brand forward in the right way.”

A marketer at a leading internet firm said: “These days, I think more and more people want to use services from companies that believe in something beyond simply maximising profits. Key to us – or indeed any brand – offering this is for them to take control of their own insights in whatever shape they are delivered – and prove that they are acting on them and making the difference that stakeholders expect of them. It’s not about the cost savings – although the CFO does value this. It is about giving the stakeholder what they want and earning your brand equity through your actions and your evident level of one-to-one understanding using the wealth of data provided to you. No agency can deliver that better than you can yourself.”

Where does this leave agencies? In the case of the Canadian government, only four out of 20 studies carried out in the last six months involved some in-house analysis – so the bulk of government work is still delivered as an end-to-end service.

And there might even be a glimmer of hope that the pendulum will swing back. The insourcing of analysis has already earned the Canadian government a mild rebuke in the press. “Transparency suffers when surveys are analysed internally,” wrote The Ottawa Citizen’s Don Butler. “Analysis done by private pollsters is included in reports posted to the Library and Archives Canada website, along with an easy-to-read presentation of the detailed findings. That is missing entirely from the reports done in-house by government. Instead, the reports offer only a description of the methodology used and the survey questionnaire.”

Transparency in how insights are arrived at is equally important within companies, and senior executives might at some point lament the absence of the 50-page research report (though it seems pretty far-fetched to think they would, given how many go unread).

Can I take your order?

For Chris Dowsett, the marketing intelligence and social platforms manager at data storage company Quantum, the insourcing of analytic skills is further evidence that the role of the research agency is becoming commoditised – an area he is currently studying in depth as part of a doctorate.

He said: “The move by the Canadian government is interesting because it relegates a lot of the research agency’s position to a field-only role which is basically the role of the ‘order taker’ in this situation.

“I think the Canadian example is a case where the government has been paying for full service but with the rise of DIY surveys, online qualitative research, live video interviewing, MROCs and so forth – all challenging the full-service model from a cost point of view – the Canadian government is viewing internal analysis as a cost-saver and not worth the additional spend externally.

“So they rely on the research agencies to deliver on methodology only. This may be because market research hasn’t shown the value or delivered on the promise of actionable insight. I think this may be part of a wider shift where research agencies will increasingly work on their fieldwork and ‘analysis’ specialisms while interacting with a growing body of in-house researchers that transform those efforts into actionable insights because they’re closer to the business decision makers.”

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Readers' comments (2)

  • Quoting anonymous sources subtracts any value in this article according to an anonymous source.

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  • We in the profession should fully expect a general switch to DIY as organisations see increasing leverage from integrating their various sources of data - whether this is survey daya, customer data, call-centre data or material gathered from the blogosphere - there's a huge advantage in collating this and seeing it from a holistic rather than fragmented stance.

    I really do think the MR industry - and profession, have been dreadfully flat-footed in this space. Our business models, and a lot of our research frameworks are still predicated around the post-war paradigm: the mass media, mass marketing era.

    The commoditsation has come from the research agencies largely - who have made good money turning smart IP into standardised products. But in an increasingly complex world - where data is sourced from everywhere, the centre of gravity in our industry will need to shift back to the professionalism and way from productism.

    What the Canadian story tells me is this: it isn't about the money - it's about getting more value and deeper insight from our multiples sources of data. And research companies aren't quite delivering.

    It's a wake up call.

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