FEATURE21 September 2009

Unlikely alliances


As the recession causes clients to pay more attention to how they buy research, Phil Rushfirth and Caroline Walker of Nunwood say that agencies need to get used to working with their competitors in ‘split service’ models.

Although some would argue that the research sector has been relatively cushioned from the global recession compared to its marketing and advertising cousins, there is no doubt that research, more than ever, has had to prove its worth.

Buyers need to know what tangible impact research can make on their business, and the sector is going through a period of re-evaluation of everything from the methodologies and techniques that are employed to the way research is delivered and used.

We’re also seeing re-evaluation right at the start of the process, in the way research services are bought.

A new trend is emerging of clientside researchers asking for a greater level of collaboration between their agency suppliers. In some sectors, there has been a move away from the traditional model of sending out a research brief, evaluating the merits of different suppliers on a roster, then appointing one agency to complete the project in its entirety, from consultancy, research design, fieldwork and analytics to dissemination.

Instead, clientside researchers are taking a ‘split service’ approach, looking at the relative strengths of all the agencies on their rosters and asking them to work together.

While it can’t be employed across the board, it’s an approach that lends itself particularly well to large multi-country studies, particularly tracking studies, which not only require a big investment but have a high profile within the business. Research buyers are looking at the different stages of the process - conducting the fieldwork, global co-ordination, analytics and reporting – to decide which of their agencies are best placed to deliver.

There is an acknowledgement that a small, boutique agency might not have the resources or on-the-ground fieldwork capabilities across multiple markets to conduct fieldwork globally. Equally there is an acknowledgement that the larger agencies might not always provide a flexible, bespoke approach offering the kind of new, specialist thinking you could get if you cast the net  bit wider.

Vodafone, for example, implemented a split service model for their ‘Customer Delight’ tracking study, which takes place across 21 markets. The company invited its agencies to tender for certain elements of the process which were best suited to their strengths. It was able to negotiate with each individual agency over their part in the research process.

This model has been up and running for over a year at Vodafone, with teams based in each local market selecting their preferred fieldwork agency. Research International is responsible for research design and global co-ordination while Nunwood is responsible for the advanced analytics, modelling, reporting and associated consultancy.

Crucial to this approach is a web-based global hub that has been designed to act as a communication tool and to share project outputs, bringing all collaborating agencies and Vodafone teams together.

A recently announced joint venture between Nielsen and IRI to pool back-office resources suggests that agencies are increasingly willing to have a go at ‘co-opertition’.

Andy Moore, director of customer insights at Vodafone, says he wants to promote a team philosophy among the firm’s agencies, encouraging them to take the client’s point of view, putting rivalries aside in order to deliver the best overall solution. Put bluntly, agencies need to work together or lose their place.

What are the implications for the industry? Will the large agencies with offices around the world be solely used for fieldwork while the small-to-medium agencies are called on for the more consultative bits of the insights mix? Not necessarily – but it does mean that the playing field is open. Larger agencies now have new competitors to pitch against and clients have a wider pool of agencies to choose from.

For Vodafone it is not simply a case of the big agencies vs the small agencies. They value large agencies for their ability to deliver multi-country coverage and co-ordination and to connect to other marketing services companies in the same group. Equally they value the different specialisms and areas of expertise that small and medium agencies can offer. What they are saying is that they don’t want to have to choose.

Wyeth Global adopted a similar split service model for its global tracking of infant formula milk for much the same reasons. They maintained consistency in terms of fieldwork providers for their long-standing global brand-tracking study, ensuring buy-in from their local market teams, but they were also able to tap into the analytical and consultative strengths of smaller agencies like ours, with minimal disruption.

For clients, collaborative working means that they have access to a tailored programme while retaining control of the entire process. This allows them to negotiate the best prices with each of the collaborating agencies and to pick agencies with particular specialisms, or ones with the right fit with their culture and brand.

This can only be good for our industry. Agencies, large and small, need to embrace this new way of working and show that they can collaborate with their competitors to ensure that their role contributes to the success of the programme as a whole.

We can either profit from sharing or stay in splendid but ultimately unprofitable isolation.

Phil Rushfirth is managing director at Nunwood and Caroline Walker is international development director