Will Stephen Phillips become the most hated man in MR?

“A couple of years ago, I was explaining the ZappiStore concept to someone and they said, ‘If you pull this off you’ll become the most hated man in market research,’” says Stephen Phillips, founder of Spring Research. ZappiStore is his new company and it aims to automate and reduce the cost of a lot of the generic quant work that is bread-and-butter for a large number of market research agencies – hence the very real possibility that success will be met with resentment.

ZappiStore won the Insight Innovation award in Brazil last month and with it a $20,000 prize. Now back in Britain, Phillips is turning his attention to building a client base for the firm, which soft-launched several weeks ago and offers a range of online research apps for testing creative ideas (see news story for more detail). We caught up with Phillips to find out how the idea for ZappiStore came about and how big the business opportunity really is.

ZappiStore is very different from your other businesses, Steve. What got you started down this path?
Stephen Phillips: The idea came about several years ago. Spring – primarily a qual company which does a lot of work around communication development – wanted to come up with a new approach to ad testing. We believed that a lot of ad testing was too rational – and I liked the more emotional measures like BrainJuicer’s Face Trace and Conquest’s Metaphorix – so we thought we’d come up with something of our own. The idea we hit on was using emoticons as a way of gauging the emotional impact of advertising.

We took this to clients and they were generally complimentary, but they’d say things like, “We’ve been doing Link tests (or something similar) for years, we have our database of norms and – while I like what you’re saying – it’s not different enough to genuinely change the way I deal with my advertising campaigns”.

I came home one night and thought to myself, “Why is it that we are constantly trying to innovate around methodology? Maybe it’s not about methodology, but about price and time – and that’s where we should be innovating.”

So the idea for ZappiStore is what I would describe as, “Great research, automated”. It allows you to do great research in 5% of the time or at 5% of the cost.

What’s the target audience for this service?
SP: When we first started thinking about this, we identified three target audiences: ad agencies, because they need to do things quickly and cheaply; big clients, who are not so price-sensitive but are increasingly time-sensitive; and SMEs, who we thought would be the main audience.

You’ll remember the debate at MRS Annual Conference last year when a couple of SMEs got up to say, “We don’t do much MR. We’d like to work with MR companies but they’re not that interested in us.” And, to be honest, the client–agency set up means that if you’re a company that has £20k to spend on research in 2013 then none of the big firms and most of the mid-size agencies just aren’t that interested in you. Maybe independent consultants might be, but even then you wouldn’t be high on their target list as you can probably only afford to do one, maybe two, projects in a year. But with Zappi, you could do eight or 10 projects.

So SMEs were definitely seen as the core target audience for us, but as we’ve gone through development we’ve realised that big companies are incredibly interested too, so we’ve changed our focus.

Why is that? Was pricing still an issue for SMEs or is it just that the demand within large companies is bigger than you thought it would be?
SP: The enthusiasm among big companies was greater than we anticipated. To be honest, we know more of them so it’s an easier sell. Getting out to the SME market will require a lot more work and PR efforts. But big clients are very enthusiastic about being able to turn things around so quickly: being able to come up with a new idea for a product in the morning, to test and get results back and change what they’re doing in the afternoon… That’s the pace of business now.

What does success for ZappiStore look like?
SP: We’ve looked at the Esomar global research study and done our own market sizing study in the US, and we believe that the market we’re playing in, the work that we can automate, is a $3bn–$5bn slice of the market research market.

In three to five years time, I believe that large swathes of that market will be automated and running on some similar system to Zappi; systems that are fast-turnaround and inexpensive compared to what is available now.

What proportion of that market Zappi eventually takes? I don’t know. But we are the pioneers, so we have an advantage.