‘Outside the box and inside the budget’

Phyllis Macfarlane said your “vision will shape the future of the company”. What is your vision and what can we expect to see from your leadership of GfK NOP?

We’re in an unusual year so we need some short-term tactics followed by a longer-term strategy, not just for my company but the industry as a whole. I guess in the short term we’ve got to really stay focused on our clients, stay close to them, deliver great research, make sure we’re as cost-effective as possible and really help them to make the practical and sometimes difficult decisions they need to make – that is what I think this year is all about.

At the same time, we need to try to be innovative. I saw a quote from a client recently that said they want their agencies to think outside the box but inside the budget – to be innovative, to keep moving the research on, but at a better price than we’ve ever had before.

It sounds like a bit of a juggling act.

It is, but nobody ever said life was easy so I think that is the challenge that clients are laying down for us and we’ve got to get on with it. I think that the longer-term challenge is really embedding our research more in the commercial world, so making sure that researchers are always thinking about the clients’ commercial objectives. Part of that is being able to prove the ROI of research and we have some initiatives kicking off in that area. In an ideal world, and we’ll never achieve this fully, we need to turn research – from a client’s point of view – from a cost to an investment, something that is going to provide very tangible business benefit and guidance.

That’s the task, and I think that’s going to involve the whole industry making sure researchers are very focused on the commercial necessity of our products. I think we’ll see a little less focus on technical products and features, and a little more focus on what our clients are trying to achieve in their business.

What happens in an economy like this is that research that hasn’t proved it is mission-critical can quickly go away, so I think some of that will get stripped. However, recession can be the mother of invention and the research industry has proved itself to be very quick to adapt over the years. So I think what will happen is that as those parts of client research spend that have not proved to be fully effective get stripped away, the industry will be very nimble in providing solutions in terms of what the client needs to know.

You’d been heading the business and technology division at GfK NOP since 2000. What has changed in that time?

There was a tech sector recession when I took over that division so I’ve seen good times turn into harder times.

This recession is tougher. It’s broader-based. Certainly there is a bigger hit on global GDP and my feeling is that despite all our talk about research being ‘recession resilient’, I think only some parts are.

I’ve been in the research business since the late 80s and this is certainly the toughest time we’ve had.

Have you seen any signs of a recovery?

I think there is a bottoming out. When I talk to colleagues around the industry there is a general feeling that we’re near the bottom – if not quite at it. The big question is ‘Will there be a bounceback or will we stay in the dip?’ and I don’t think any of us know the answer to that yet.

Inevitably our clients’ budgets are set in advance so we’re going to see a bit of a time lag, even if consumer confidence goes up. There will be a delay before that filters through to clients’ budgets or research.

What’s your take on the state of play in UK – is everyone going to come out of the recession?

No. I think typically recessions do create a bit of a shake-up. My personal view is that the UK research industry will probably be in negative growth for the year as a whole and I think inevitably the companies that have not been delivering a top-quality product are going to suffer.

I’ve seen and read on several occasions that it may be the medium-sized firms that suffer as the bigger agencies have access to blue-chip clients and they tend to stay on supplier lists, even when those lists are reduced. Then there are some innovative small agencies so I think the task for the mid-sized companies is to prove that they have something innovative to bring to the table.

The potential GfK/TNS merger was one of the biggest stories of last year Would it have been a good thing for both firms if it had gone through?

There was a sound strategic logic in the potential merger, but that didn’t happen and we’ve moved on and we’ve got a good strategy that will work for us as a standalone player. In fact, putting two very large companies together in the middle of a recession is a difficult and sometimes painful thing to do. So although there was a good strategic logic in looking at that, there is probably a school of thought that is a little relieved we weren’t putting that merger together in 2009.

Has the TNS/WPP deal changed the research landscape?

From our point of view sometimes clients had two competitors in the ring against us and there is now only one so there is a chance for other people to come to the table. There’s no doubt that clients in this industry don’t want dominant players, they want to be able to play the field and pick the most appropriate and nimble supplier for their needs. So from a competitive point of view I’m not sure it has made a huge difference, but obviously they are a very large company and a very serious competitor to us so we take them very seriously.