Google, Tesco, Premier Foods and Kantar on reframing investment in intelligence

Intelligence Capital™ was the theme for the opening session at the first residency to be held at the festival, which consisted of a morning of content curated by the Market Research Society. Far from polarising views, panellists from Google, Tesco and Premier Foods found much to agree on.

Julie Kollman, chief research officer at Kantar opened the session by laying out the case for Intelligence Capital, a joint initiative between Kantar and MRS. The concept, Kollman said, aims to “reframe the way organisations view their investment in intelligence to put it on the same level of importance as the investment in physical or human capital.”

She added: “Intelligence should no longer be considered an expense or a cost, but as an asset that drives revenue. It’s a message directed first and foremost at the C-suite.”

Research is so often the first thing that is cut from the marketing budget in times of need. Kollman argued that the insight function needs to start speaking the language of finance and present investment in intelligence (people, infrastructure, data) as an asset.

Intelligence Capital is defined as “the creation of a comprehensive knowledge asset and the capability to use that asset to identify and activate growth opportunities.”

The next step, according to Kollman, is to create a model that can assign a value to the investment in intelligence. But as with efforts to establish ROI, it’s very difficult to get a “direct attribution of the investment to the outcome”. To assess the right level of investment in intelligence within any company, “you need to be looking at how much effectiveness and how much efficiency are you driving over time”.

Kollman said the language around the topic needs to change. “Forty years ago, insight may have been a support function, but in this day and age where data is everything and your entire competitive advantage comes from having a better capability to analyse, interpret and apply that data, this is as essential to success as any other investment the company will make.”

Toby Horry, until recently customer propositions director at Tesco, agreed there is a desire to do this. “Tesco has so much data and it resides in many different places, and I don’t think it’s looked on at the same level as a capital investment. I think that’s probably a mistake.” Horry sees value in creating a stronger connection with finance so that intelligence is not perceived as simply a subset of marketing but associated with the health of the company as a whole. If insight and finance are isolated from one another “it becomes very hard to make significant decisions.”

Catherine Haigh, insight controller for sweet treats at Premier Foods, described work she had done identifying the ROI of insight but felt this broader focus on intelligence was an important step change: “We’ve talked about ROI of insight – now that we’re talking about Intelligence Capital I think it will unlock a very different discussion at a different level.”

The panel went on to envisage a day where the market share of even a ‘traditional’ (pre-tech) company will include the intelligence they hold. When viewed as an asset that can be valued, intelligence will no longer be one of the intangibles that puzzles economists, and could lead on to more accurate evaluations.

Of course, for a company like Google, which is founded on data, this is already the case. Harry Davies, head of marketing measurement and attribution at Google UK, said: “Every worker at Google is a data worker. Because those skills are embedded across the whole workforce it is more difficult to pull intelligence out and value it. For tech companies that have built themselves on intelligence, the best valuation of their intelligence capital is their share price – that really is their whole reason for being, it’s baked in.”

Davies continued: “What is more interesting is when you’re trying to shift from a traditional business selling products, to being a customer-focused organisation that puts insight at its heart. That’s more difficult because your value is still ‘how many biscuits did you sell or are you going to sell in four years time?’”

If analysts are already asking companies what percentage of their revenue they are spending on marketing as an indication of future growth, “why are they not asking the same of insight?” asked Kollman.

A metric like price elasticity, suggested Davies, would help C-suite, and particularly finance, assess the link between spend on intelligence and the sustainability of the brand or business.

People and skills need to be recognised as a part of the evaluation of intelligence, especially as companies grapple with such huge volumes of data. Davies said: “The need for intelligence now is far greater because we're close to census data, but there’s a hell of a lot of bias in it and people are making mistakes by just summing columns. So a way to value it is to show that without those skills you’re going to fail miserably.”

Having the capability to recognise and activate insight will always be critical, stressed Haigh,  who says these skills allow her team to focus on the work “that really shifts the dial, and push back on the small projects that won't deliver growth.”

When asked for a show of hands as to whether the concept of Intelligence Capital would be helpful within their organisations, the audience was unanimously in favour. The sense in the room was of optimism that this concept offered the research sector a huge opportunity – possibly even a solution – to the existential crisis so often expressed at research conferences just a few years ago.

“The behaviour change we want,” said Kollman, “is that when you are making the case for investment, there will be a proper conversation about the value of that investment, how long it will take to pay it back, and what the impact will be.”

A joint report from MRS and Kantar on Intelligence Capital will be published in January 2019. For more on the initiative, visit mrs.org.uk/resources/intelligence-capital