Is research becoming cool?

Professor Hal Varian, New York Times columnist and the man who has tortured hundreds of thousands of students with the standard microeconomics textbook, is on a break from his job in the Department of Economics at the University of California at Berkeley. He’s being a chief economist – at Google.

Google prides itself on its ability to tempt the best analytical thinkers to innovate from inside its offices, and on the intellectual rigour of its interviews. One recent interviewee was asked which university he graduated from. “I said Cambridge,” he says, “and the guy said ‘Yes, but which college?’”

Only a few years ago if a media company had a chief economist, you’d assume that its accountant had printed his own business cards. But as data threatens to either swamp us or set us free, the big ideas seem to be increasingly in the domain of the quants. Varian told the New York Times exactly this after his appointment: “I keep saying that the sexy job in the next ten years will be statistics. And I’m not kidding.”

Market research was built on the ability of quants to extract meaning from numbers. If that’s now just one of the many disciplines of MR, it’s still an industry that can’t survive without it, and has for many years hoovered up bright, numerate graduates in their thousands. So it follows that if statistics is sexy then so must MR be sexy. And if fewer kids want to grow up to be reality TV stars and aspire to be data analysts instead, that’s good news for MR’s cool factor, and its ability to recruit the best, isn’t it?

It’s never that simple. Other cool companies want your analysts. “Advertising agencies, direct marketing, management consultants are all beginning to do quant work that we have considered our own,” says Vanella Jackson, chief executive of Hall & Partners and incoming chair of the MRS.

You do the math
Last year Dimitri Maex, head of the global data practice at Ogilvy & Mather, caught the attention of the business press by setting out the case for stats in a paper entitled ‘Math Marketing’ – his snappy phrase for using statistics as an integral part of the marketing process. On one hand he traced the discipline back to Claude Hopkins’ Scientific Advertising in 1923 (“Advertising has in some hands reached the status of a science”). On the other, he laments that so little of advertising and marketing work is evaluated rigorously, partly because while statistics might be cool, establishing what power and influence the people (or the agencies) who wield it should have is a more difficult organisational problem.

Maex is head of Ogilvy’s analytics department, “a group of more than 200 math marketing specialists worldwide”. If statistics becomes really cool, then this sounds like one of the right places to hang out (especially if you went to the wrong Cambridge college). Maex concedes, though, that new entrants like Google and Microsoft have a combination of image and market power that is attractive for marketing analysts: “With the digitisation of all media, they will soon hold the majority of all marketing effectiveness data. They have the capability to handle the largest volumes of data, and have mathematicians and engineers who, if focused on marketing effectiveness, could have the ability to do just about anything,” he writes. So does that leave the MR industry scrabbling for the second tier of talent?

Maex relegates market research to a walk-on role in the future of math marketing, “to solve certain pieces of the overall ROI puzzle”. The MRS’s Jackson accepts that, just as stats gets to be aspirational, so the aspirations of the would-be quants may lie elsewhere. “It’s making us look at what we are doing and the different skills we are going to need. Data gathering is now a commodity, and what we need to do is put the emphasis on what we can do with that data. But that requires us to be broader in our outlook. We have to constantly reassess what we do.”

Jackson insists that MR is one of the coolest areas to be working in at the moment, but she puts this down to the fact that it’s “about transforming business, not just about collecting data”. In fact the increasingly social manner in which technology is used has brought about a shift in research towards qual – not quant. Perhaps the cool quant revolution is just not something that market research was destined to be a part of.

Strength in numbers
Neil Morgan, director of marketing for EMEA at analytics tools specialist Omniture, warns that the best analysts might be pulled to clients, especially those whose primary focus is digital marketing, where they can have most influence on strategy. “Five years ago the digital marketing budget was 5% of the total. Now it is up to 25 to 28%, and for clients of ours like LastMinute.com that is up to 70 or 80%. They generate an exponentially larger amount of data. The guys who are using our stuff to make decisions are the most strategic.”

Even ‘traditional’ clients like John Lewis or Argos, he adds, are beefing up their analyst teams in the face of a shortage of supply. “Now the big brands understand the impact of data,” he says, warning that for traditional market research agencies, this might mean that the top talent goes in-house, unless they can convince their analysts that their work will have impact.

Daniel Wain, who as a freelance learning and development consultant in the research industry speaks to many of the firms who stand to benefit from MR’s would-be hipster status, is cautiously optimistic that this can be achieved. “Pre-recession, research was beginning to struggle to recruit, particularly in developed markets. It wasn’t a quantity issue, but it was a problem with quality. And when it got the recruits in, their demands in terms of personal development and work-life balance were considerable.”

The recession has changed that, as has a realisation among talented quants in higher-profile agencies that as the bloodbath of firings in advertising and marketing isn’t going to happen to the same extent in MR, it is not just a more relevant discipline but a safer one too. “The higher end is looking far more attractive. There’s a much greater scope for development,” says Wain. “For them, advertising increasingly looks like a limited organisation.”

Cool to be square
At data analytics firm Lynchpin, founder and managing director Andrew Hood cautions that numerical wizards are still seen as useful in many agencies, rather than chic. “Businesses are valuing this far more than they did before. Whether that makes statistics cool yet, I don’t know. The people who deliver your numbers aren’t yet seen as hip, compared to the creatives,” he says.

When looking for the best graduates or entry-level analysts it helps to be seen as operating in more or less the same space as cool brands like Google. “Google has revolutionised the market for analytics from a technology perspective. It has prompted a huge consolidation in the sector and a lot of change. Omniture, for example, has massively increased its market share. But whether you use Google, or Omniture, or any other tool, you need people who know how to analyse the results,” he says.

Although the cool status of MR might attract more CVs, Hood isn’t sure that this would make recruitment a great deal easier. “It’s very hard to deliver an undergraduate course on this type of subject, because at the moment it would be changing every year,” he says. “We have to do a lot of training for the graduates we recruit.”

More optimism from Jo Young, managing partner at Indicia: “Data has always been cool for me, but it represents a change of mindset for many clients and agencies. We have always kept our roles in silos. The enjoyment is taking data out of that silo.”

But her reality check comes when she visits clients and asks what they are learning from the huge volumes of data they are collecting. “The quants still sit in a corner. I say, look at your market research department, they might have an answer for you on that, and they haven’t even spoken to them.”

Looking the part
Young’s confidence in what young people think of MR may be misplaced, warns Sarah Castell, head of qualitative research at Ipsos Mori, who has done research into what graduates think of market research as a career. She’s not convinced that the coolness of research is apparent from the outside. “This topic comes up from time to time in our market. In MR we’re always worried whether people think we are cool. Maybe it’s because we deal with a lot of other cool agencies,” she says.

The problem is that those traditionally ‘cool’ agencies, and the new breed of ‘cool’ internet companies, are easier for students to understand. “We need to think about companies like Google and traditional agencies. We have lots of good people at all levels, and there’s a diversity of careers in MR that might be a different challenge for people coming in to the industry.

“But a lot of graduates still don’t have a clear idea of what MR firms do. Doing research is still not something they talk about. They might not want to ‘work in market research’, but they might have the skills and interests to be an ethnographic analyst, for example. It’s up to us to present what we do with data and make it more comparable to what’s around in other companies.”

Part of this, she adds, is to make sure that MR doesn’t come across as routine. Google dictates that its young high-fliers spend a proportion of their work time in personal projects. Internet companies were founded on the idea, if not always the substance, of personal brilliance. Ipsos Mori helps solve the aspiration problem by holding a Dragons’ Den event every six months, so that people with bright ideas can put those ideas to work.

Of course this assumes that the quants they recruit can step up and step out from the corner where Young still sees them. Castell claims that the insight which means the best graduates can spot the power of MR is the insight that will help them thrive. “Some of our young people are saying ‘let’s do it this way’, and are responsible for our new thinking. The people who spot that a career in MR offers these opportunities are exactly the sort of people who will be able to work creatively with data.”

That’s far too convenient for Rory Sutherland, the president of IPA, who considers that the MR industry overstates its own ability to use data for more than the most basic decision support. His argument is that MR needs to not only think bigger but think deeper. The implication is that, whether the image of MR is cool or not, the serious talent might decide that it is not fulfilling its potential.

In an interview with Research in February he accused some sections of the industry of being “bloody wooly”, with “deeply flawed” models of how consumers act. A lack of a clear, measurable basis and a focus on established models of persuasion, have limited the role of both MR and advertising, he said.

Sutherland considers that the discipline of behavioural economics is both a challenge to the traditional proxy-based models that MR uses to measure consumers, and a counterbalance to the proliferation of “reductionist spreadsheet models of what’s going on”. It will give the agencies “the vocabulary and confidence to go into the boardroom and say, ‘Look at this.’”

This is the step that, for example, Dunnhumby famously made when it used little more than a personal computer and a small group of talented quants to analyse the first Tesco Clubcard data in 1994. When it presented to a meeting of Tesco directors, Lord MacLaurin, then chairman, spoke at the end of the presentation. “What scares me about this,” he said, “is that you know more about my customers in three months than I know in 30 years.”

Such eureka moments are rare. But new thinking in economics offers the chance to use data to ask new questions, or give fresh answers to the old ones. If MR neglects to pick up on these fresh ideas, and consequently fails to become interesting enough to get boardroom attention, there are inevitable implications for recruitment. Great candidates are out there, Sutherland believes, but he warns: “I don’t think we’re providing them with the necessary intrinsic interest to keep them in the business.”

Jackson is more optimistic. “The sorts of things we do in market research are incredibly cool right now. All young people are doing things where they are analysing data every day, so it’s natural for them,” she says, “The last year has seen the fastest change of any in my career. It’s absolutely the right time for us.”