FEATURE30 January 2012

Spending plans

Monique Drummond of Relish Research hears from research buyers about their priorities and expectations for the year ahead.

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

“We’ll be challenging the need for some of the more tactical projects which can take a lot of time, yet deliver very few actionable insights”

David Hollinshead, The FA

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

“We’ll be increasing the application of behavioural economics to our insights”

Marcus Taylor, EDF Energy

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.

8 Comments

9 years ago

Great article. I'm glad to hear clients increasingly talking about more productive and useful debrief sessions. Larger projects, but fewer of them means it's time to give (even) more on each and every proposal we write.

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9 years ago

There are some interesting corollaries here; as a research buyer the most obvious one for me is that the traditional big agencies (TNS, Ipsos et al) become less relevant as budgets shrink. With budgets that barely stretch to a good qual/ quant study, smaller and nimbler agencies do seem to have the edge; they're often more flexible in their approach, and their qual and quant people work much more closely than in the big agencies. And they do seem more au fait with the idea of the flexible debrief, looping in a product team, a sales angle and a GTM vendor where necessary. Obviously the large agencies do still have advantages - and this is all IME, of course - particularly when it comes to multi-country studies, or cutting edge methodologies; but the economies of scale that come with owning a large field force are pretty much gone. Big agencies need to think and act like small ones in order to move beyond those big trackers and the like; and arguably small agenices might not benefit from pursuing organisational growth as a primary goal.

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9 years ago

Really interesting comment from NickD. However, I think that even in the case of the larger international projects, the playing field has become considerably more level. Medium size agencies are also being given the opportunity to pitch for (and win) larger scale multi-national projects, utilising their networks of like-minded associates in each local market as and where needed. This shift to ‘glocalisation’ can yield not only greater cost-efficiencies, but also better results for clients for the same reasons you have outlined above. Thanks NickD.

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9 years ago

Great article Monique - and I wish I'd thought to canvas similar from our clients! It makes me think about the sorts of skills that we require from our researchers, especially senior ones, in the light of comments about needing to absorb thinking from other 'disciplines' (i.e. BE) and be workshop facilitators as well as moderators. These are all things that we do DO to various degrees but not always something that we might prioritise when recruiting new members of the team. And in fact, we might sometimes be hiding our lights under bushell's when it comes to shouting about those additional specialisms we have as an agency. I am of course wary of the 'more for less' clarion call as a smaller agency who has always striven to go that extra mile - need to also bear in mind that we run the risk of devaluing our skills if we try too hard to win pitches by including the baby and the bathwater for just the price of the water. Too many analogies. But you definitely got me thinking...

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9 years ago

Sorry, second comment here - but it got me thinking again! You touch on the implications of some clients doing simpler projects in-house, and saving their use of vendors - and budget - for bigger projects. Is the client/ agency dynamic changing: are more clients hiring researchers so that they need to use agencies less often?

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9 years ago

Thanks Monique, interesting stuff and something that we at IO Consulting have been talking about for a while now. We are passionate about making the research that you're doing actionable, and investing the time and energy to really engage the wider business and inform future strategy. After all, what's the point in investing significant budget in a project that stops with the debrief? It just doesn't make sense (but unfortunately happens all too often!)! It's all about making the research live and breathe within the business, and if you've used the right agency (like Relish, who we have first hand experience of, and who we rate highly) that should come as second nature. It's also so important to take stock of what work has been done to date, as so often the wheel seems to be continually reinvented due to personnel changes/lack of internal communication etc. Reviewing previous research can really help to refine the brief for future work and also maximise budget! Less is so often more, for all parties concerned!

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9 years ago

Excellent article (although I was one of the clients canvassed so I would say that...!). NickD - Personally I am relying more on the agencies and consultants I trust and that know our business because internal research resource and investment is frozen whilst the demands of the business continue to grow. Chloe - yes the skills we value are changing, what I need from agencies now is adaptability. For example, using agency execs as an extension of our research team, to manage other agencies. Or pulling in a consultant on a day rate to use knowledge gained from other projects to help with the design for a new initiative. Critically - avoid being defensive or protective of where or how we generate the insight - if it is relevant, use it.

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9 years ago

Naturally heartened to see that Shopper Insight is being mentioned as a focus area for 2012! Many companies have seen to their detriment that they can spend many millions developing fantastic brand lens ATL activity but not achieve the results they expected. if they don't consider who is actually buying it and why then make this as simple as possible, then they can at worst waste that significant investment or at best sub optimally execute which inevitably leads to a lower ROI.

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