Spending plans

This time last year at Relish Research we asked our clients what they looked for from their research agencies. This year we canvassed a wider range of clients from insight, marketing and brand backgrounds to find out what they will be doing differently in 2012.

The three simple questions we asked were aimed at finding out key shifts in the types of research being commissioned, and the more general business challenges people feel they are likely to face in 2012:

• What will you be doing more of in 2012?
• What will you be doing less of?
• What are the main challenges you will face this year?

We received almost 50 responses. Here is some of what we heard.

Shrinking budgets means larger projects and fewer of them

Only two people alluded to an increase in their advertising or research budget for 2012. Most reported cutbacks in overall expenditure, whether for research, advertising or NPD.

With less money to spend, the focus is shifting to fewer, larger and more strategic projects. David Hollinshead, research and insight manager of The Football Association, said that they will be “trying to focus more on projects that can really make a difference, while also challenging the need for some of the more tactical projects which can take a lot of time, yet deliver very few actionable insights”. Similarly, James Burckhardt, EMEA marketing manager for surgical equipment at Bausch & Lomb, said: “Money is being consolidated in bigger projects to ensure that we can maintain or expand scope and get more bang from individual projects.”

For most, the main challenge clients mentioned was budget cuts and working out how to squeeze maximum value out of every project they commission. One insight manager for a media company described it as “fitting a quart into a pint pot, more to do, trying to push more to the agencies so that we can concentrate on adding value, all on a lower budget”.

The greatest casualty of this trend will be the severe reduction in what for many is the bread and butter of our industry. Smaller, ad hoc projects will give way to fewer, larger strategic pieces. Ashley Goodall, director of Hybrid Communications, said there will be a shift away from “smaller projects that detract from the main deal”, and Joe Keating, marketing manager for Hills Pet Foods, wanted to move away from “small online qualitative projects primarily designed to answer single questions”.

Alternative methodologies including in-house or DIY research will be used to make cost savings. “Rather than doing four to six focus groups to get an answer to some of our issues, we will be looking at perhaps an online survey, and save the budget for larger pieces,” said one insight manager in a media company.

Not all cutbacks were financial – a few of the clients we spoke to expressed concerns about a reduction in staff numbers which would inevitably increase their workload.

Greater demand for value and collaboration

This is good news for research agencies willing to go the extra mile to strengthen their relationships with clients. The general verdict is that we cannot be passive and wait for briefs to arrive on our desks. Increasingly, clients are willing to discuss potential approaches, methods and ideas which may challenge their traditional approach to research, but also yield better insights with which to develop more potent strategies.

A senior insight manager from a major FMCG brand says that 2012 will be the year of “delegating more to their agencies” – asking them to come to them “with new methodologies which will enable internal stakeholders to become closer to their consumers”. She is also asking her agencies to work with her insight team to train internal stakeholders in how to recognise and utilise insights to drive innovation and inform decision-making.

A number of insight managers feel that traditional debriefs are increasingly being replaced with more creative cross-functional team workshops. These enable the research agency to become more involved with the development process, whether this involves communications, product or overall brand strategy, yielding more actionable results.

Also on the agenda for 2012 are behavioural economics and shopper insight. Marcus Taylor, head of insight at EDF Energy, said: “We’ll be increasing the application of behavioural economics to our insights.” He believes this is an under-applied way of thinking and wants to ensure everyone across the business is applying it in their day-to-day work.

Shopper insight was a frequently mentioned priority on a number of FMCG insight managers’ agendas for 2012. Neil Blackburne of SCA Paper Products felt that he would be focusing more on this and econometrics while John Boreham, group insights manager at Mothercare, indicated a need “to ensure that the understanding of consumer shopping behaviour is core to the business plans”.

Keep calm and carry on

Many alluded to the need to maintain a positive outlook and team morale in the face of general pessimism in the media. A head of marketing and communications for a major retail bank said that for him the greatest challenge “tends to be around removing cost while minimising impact on activity – and it can be a challenge for leaders to keep teams motivated in this environment”.

Even though most insight managers are cutting back, there are opportunities to develop new solutions and work more closely with clients. Now, more than ever, clients are willing to engage in an ongoing constructive dialogue with their research agencies. And if you can pull it off, this shift to a consultative role is better for everyone involved.