Tracking the trackers

Pay-for-performance: research buyers say they want it, agencies are understandably cautious. But there remain questions about the definition of performance and how it should be measured.

David Timberlake echoes Stan Sthanunathan, the vice president of marketing strategy and insights at Coca-Cola, when he says that it is difficult to tie research performance and agency reimbursement directly to sales and profits. “Lots of things happen down the line” between the research being delivered and the product hitting the shelves, he says. “But there are things you can do to measure the performance of the supplier at the point of delivery.”

Timberlake has worked clientside before but was more recently a senior executive at Nielsen, as was Tony Meacock, his partner in the new business venture The Marketing Information Company, which is launching a new ‘pay-for-performance’ measurement service.

This service is designed to track the performance of continuous market research suppliers. Essentially, companies hire The Marketing Information Company to provide ongoing monitoring to ensure that suppliers meet the key performance indicators agreed between research buyer and supplier.

They’re not out to become a data delivery middleman, funnelling research from supplier to client. Data still flows direct, Timberlake says, but agencies will be expected to submit a report to The Marketing Information Company confirming that they had delivered the research on time or vouching for the quality of the information, for example.

For continuous research, Timberlake says, there are perhaps “eight, nine, ten measures you could put in place and track over time”. Most research contracts already contain performance-related clauses, but he says the difficulty for clients is that they can be time-consuming to track on an ongoing basis.

Timberlake believes the time is right to introduce such a service, not only because buyers and suppliers are starting to discuss pay for performance, but because the stress of recession has created tension in the agency-client relationship. Buyers have been tightening their belts while the cost of data has been rising, meaning suppliers are having to make savings by looking at cheaper alternatives such as outsourcing. Agencies and clients are, he fears, are “pulling in different directions”.

Pay-for-performance should mean clients get “the best information and services available at the right price”, while the supplier is clearer about what it takes to enhance client satisfaction and “improve their chances of extending the relationship”, Timberlake says.

There’s scope, he thinks, to extend this approach to cover ad-hoc research projects, but for now, “We want to start with what we know best.”