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FEATURE10 July 2015

Truchot on the market research challenge

Features

In an exclusive interview with research-live, the chairman and CEO of Ipsos, Didier Truchot, shares his thoughts with Jane Bainbridge on emerging markets, social media, polling and an EU referendum.

Amid the rattle of building work at Ipsos’ Wapping-based offices, Didier Truchot, chairman and CEO of Ipsos is in reflective mood about the state of the market research industry.

“We are in a period where many businesses are challenged by the transformation of marketing activities; by the development of digital networks and the rise of social media,” he says.

“But there’s no reason why market research itself should be challenged. On one side, many of our clients are cautious about how they can grow their business and on the other, information about the markets and the consumer are important – as they are trying to get as much information as they can – in a way that is affordable and usable.”

However, he does acknowledge the challenge the big MR firms face, especially when they are increasingly in competition with smaller, more specialist agencies. To that end, a reorganisation of Ipsos was started a year ago – called the New Way project – to focus on the services it provides clients and how they are organised.

What MR must offer clients?

So what does Truchot think clients want from market research agencies that isn’t currently being provided?

“They are not getting our information quickly enough – speed is a big challenge. Which means we need to reshape our ‘factory’; what we used to do in weeks, we now need to do in days or hours. It’s also about how we take into consideration some sources of information which we’re not producing but which are there,” he says.

However he says the way in which many clients are structured does impede the speed they’re now after. “Our clients are trying to speed up their decision process and at the same time any decision involves different stakeholders – so it’s not just the marketing people or finance and R&D people. There are so many people round the table. So there’s a conflict between reacting quickly and having many people round the table which makes it more complicated.”

Has he noticed a post-recessionary effect on the way clients are allocating their budgets or running their businesses?

Truchot says he’s seen an effect, not related to the recession but more to the stock market. “For the first time in history in US business in 2014, S&P 500 companies gave back more money through dividends and share buy-back programmes to their shareholders than they invested. It’s an amazing fact. So in this environment where many clients have problems implementing a growth strategy, it’s all about efficiency and now a bit about mergers and acquisitions,” says Truchot.

“I think that many of our clients are looking at the cost structure and trying to control, and in some cases, reduce their marketing costs. It might make sense if you don’t have a growth strategy. So market research budgets are under pressure. But it’s not the main reason why the large companies are not growing these days, I believe it’s because they need to be more clear what they want to do with their clients.”

Emerging markets

For many of the big agencies, as the downturn affected Western markets, they looked to newer economies and the so-called emerging markets for growth. But this has not necessarily proved to be where the best growth has been says Truchot.

“Emerging markets are a disappointment these days. If you look at markets like Russia and Brazil – they are large and there were a lot of expectations – from our clients and also from ourselves – to grow in these countries. So when we’re looking at our activity, our numbers are okay, certainly better in developed markets such as the UK, US, Germany, Japan but our performance in the developing market is not as strong as we expected,” he conceded.

“In developing markets the Western clients are really cautious and their business is not doing so well. So they are trying to understand what is going on, bearing in mind that for them it was seen as the main source of growth. Fortunately in many of these markets now there are some local clients which are pretty competitive and we’ve started to work with these clients more than before. But there will probably be some kind of reset of expectation of how developing countries will develop in the next few years,” he says.

The EU and polling issues

As a French-founded company, I wonder how he feels about a UK referendum on exiting the EU.

“The most recent MORI poll shows two thirds of British citizens want to stay within the European Union. We are concerned by any situation where the world will be even more discrete than it is now. I have some difficulties to understand how this kind of movement out of the EU can benefit UK businesses. My understanding is that many UK businesses leaders don’t want it. Uncertainly is always a problem for the business,” he says.

And with that, the thorny issue of polling is raised, which Truchot is more than happy to discuss.

“We are doing polling and political research in many different counties. The challenge in the UK is how you vote. What is really difficult to predict is who will go to the poll, who will vote. In France for instance it’s easier for us because we have two rounds. In the first we don’t really understand who will and won’t vote, but then with people’s behaviour in the first round, we know very precisely how they will vote so our second round predictions are always right.

“We’ve been the best among the pollsters, we’ve not been great on one element – the gap between Tory and Labour – but good on other things. It’s really about who came to the polling stations and who didn’t come.”

Ipsos MORI is tightening its turnout filter – so it will question people who are certain they will vote and who have voted before – to improve accuracy going forward. And although polling is just one part of its business Truchot thinks it is a vital part.

“It’s a small part of the market research industry but it’s important – it’s a challenge because it’s one of the few cases where what we do can be, in some ways, checked by what is happening,” he says.

So looking forward, what does Truchot think is needed in the market research business?

“I do think what we do is extremely useful for our clients. I’m not worried about the future of our industry, our challenge is to adjust the way we do our work to fulfil their needs. The truth is for much of what we do, we have not changed the way we work for some time. There are probably more changes ahead than before,” he adds.

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