R-E-S-P-E-C-T: Why Market Research Just Doesn't Get It
It's a weird dissonance some believe is at the heart of marketing's malaise. Marketers need good research more than ever but either can't get it, can't understand it or can't accept it. Market research, in other words, has never been so important. Yet market researchers are as unimportant as ever -- at least within their organizations.
The research industry is struggling for respect even as it races to fill vacancies. Fragmentation, complexity and demand for accountability have been a boon for researchers -- to the point that their pay and bonuses are rising 10% or more annually, according to recruiting firm Stephen-Bradford Search.
On the other hand, few researchers ever move beyond their staff functions into top marketing or management roles at marketers, agencies or even leading research companies. When the private-equity owners of Nielsen Co., the biggest research firm of all, needed someone to turn the company around, they turned to David Calhoun, one of the hottest products from General Electric Co.'s general-management mill, who spent most of his career in finance.
"Marketers generally distrust research and data," said Greg Stuart, former CEO of the Interactive Advertising Bureau and co-author of the book "What Sticks," who's in the process of launching an undisclosed new business.
Punch in the gut
That attitude helps keep the industry driven largely by gut instinct and what Mr. Stuart calls "tribal custom." But tradition and gut are increasingly impractical given the complexities of modern marketing, he said.
He cites a relatively simple marketing plan with five elements -- positioning, segmentation, TV, print and online media plans -- and five choices within each element. It amounts to more than 3,000 permutations. "We'd have to be out of our minds to think we could know what to do in our gut," he said.
Researchers' relatively low status within companies and agencies, he said, leads to marketers ignoring their advice or never seeking it in the first place. At the same time, many marketers' inability to understand the methodology and calculations behind data they get, Mr. Stuart said, "allows research to be abused, sometimes by researchers but also by people trying to sell things."
Just as marketers often don't understand research, the researchers often don't understand why they're doing it.
"There is a general belief [among researchers] that over 50% of the research done at companies is wasted," said Bob Barocci, CEO of the Advertising Research Federation. "They're asked to do things that, even if the research project is perfect, won't be useful."
He attributes much of that to research done purely for defensive purposes to support decisions already made. "It's covering-your-butt kind of thinking," he said.
But he also blames research departments for much of the disconnect with marketers. "Often all we do is present numbers," Mr. Barocci said. "We don't present insights."
To be sure, researchers have sought to fix that image by no longer calling research by its old, academic-sounding name.
"I can't stand the term 'market research,'" said Alison Zelen, director of consumer and market insights for Unilever's deodorant business. "I don't consider myself a market researcher at all. I really consider myself a marketer, which is why I like the [insights] title."
She termed market research "this huge industry of billions of dollars that anyone basically can do."
That outlook has found its way into industry economics, encouraging procurement departments to drive down costs and, in the process, research quality, which in turn undermines marketer confidence in research. It's a classic vicious circle.
Years before marketers set their procurement officers loose on ad agencies in the 1990s, they did so on research, and with much less hand-wringing.
"The perception is that the only thing important here is price, because any one of these companies will deliver the same results," Mr. Barocci said. "That's the cause of procurement getting involved early and quickly [in research buying]. I don't think anybody ever really believed agencies, on the other hand, were a commodity."
Research companies are to blame too, he said, for not pushing back, or at least not disclosing what the quality trade-offs will be from low bids.
Online research has been a key factor driving down research costs and increasing speed, but some believe it's also driving down quality. Procter & Gamble Co., the biggest buyer of research in the world, last year disclosed that some online surveys from the same vendors weeks apart delivered significantly different results, as well as online surveys whose results differed significantly from those obtained by mail surveys.
Partly in response, the ARF launched an effort to develop new online-research quality standards by next year. At the same time, Mr. Barocci said the ARF hopes to "start a dialogue on procurement" practices in 2008.
But he said the single biggest issue facing the industry is: "How do we get better data?" He added that continued concerns about the quality of research data in many areas may play the biggest role in undermining the industry's image.
Research produced as part of the ARF's online-quality initiative isn't necessarily a confidence builder. A study recently presented by Knowledge Networks found in some cases substantial divergence from known benchmarks established by the U.S. Census or elsewhere both in online and phone surveys. The sample populations in seven online surveys and one phone survey ranged 10 percentage points or more from the norm in areas such as race, education, income range, movie viewership and travel habits.
A separate study by Burke found an average of 14% of survey takers across 20 online panels were fraudulent or "mentally cheating." Depending on the panel, between 11% and 20% of respondents contradicted themselves by -- at different points in the surveys -- saying the same brand both was and was not worth paying more for.
Kimberly-Clark Chief Marketing Officer Tony Palmer said survey research itself may be part of the industry's image problem.
"It's becoming harder and harder to get people's attention to do research," Mr. Palmer said. "It's becoming clearer and clearer that what people say and what they do is different. So there's a real need to drive research to newer techniques, toward research that deploys anthropology and observation."
Of course, if more senior managers at marketers or agencies came from research backgrounds, they might be better at sniffing out research-quality issues, understanding quality trade-offs for cheaper research and recognizing how research could be improved. But for many reasons, that isn't happening and may never.
"When you get to a senior level, it's about leadership, inspiring people, direction, decisiveness, handling ambiguity," Mr. Palmer said. "My guess is that the skill set required to make you a really good researcher may be a little different. You tend to be a little more introverted. ... But the industry also needs to ask itself the question: 'Am I developing people the way I need to be?'"
Susan Gianinno, chairman-CEO of Publicis USA, is a rare senior agency executive from a research background -- a former University of Chicago research psychologist who spent several years in or running agency research departments before moving into account management. But she, too, thinks most researchers are ill-suited to run businesses.
"To move a business forward, you have to come to a judgment and move on pretty quickly, and a really rigorous researcher knows too much about what he doesn't know," she said. "Some of the best researchers are better served by being the objective spokesperson for truth and not having to worry about some of the pragmatic aspects of our business."
But because researchers have become increasingly detached from the creative process, she said, many "don't know how to take their insights and convert them into actionable, inspiring briefs."
Unbundling of media from creative agencies over recent decades has widened the divide of research from creativity, she said, because the media agencies took most of the best researchers with them. And research lost favor within its remaining stronghold at creative shops -- account planning.
"The whole era of British-imported planning," she said, "did a huge disservice to strategy and planning because it became too qualitative in the sense that if somebody could just think up an idea or put on a good presentation, they were deemed a good planner."
While it's rare for researchers to move into senior marketing and management positions at marketers, too, it's not unheard of. One example is Irene Rosenfeld, chairman-CEO of Kraft Foods, who after getting a Ph.D. in marketing and statistics from Cornell University started in the General Foods research department in 1981.
Research executives believe the relative clout people from research backgrounds had at Kraft and General Foods in decades past probably contributed to Kraft becoming the leading adopter of now widely used marketing-mix modeling to evaluate advertising effectiveness.
Gregg Ambach, VP-analytic services at ImmediateFX and a veteran both of Kraft and Campbell Soup Co., said Kraft was well ahead of Campbell in developing marketing analytics. "Certainly there was no one with a career path similar to Irene's in the Campbell organization," he said. "Some of that is probably recognizing the value of the staff function."
Of course, the Kraft experience hasn't always been a glowing endorsement of the power of analytics. With sales growth stuck, around 3%, Kraft has been lagging behind some of its big peers, such as Kellogg and Nestl?. And in one of the more extreme forms of procurement hardball in 2003 (before Ms. Rosenfeld took over), Kraft asked some market-research firms to rebate money they'd already been paid.
Even the biggest proponents of research don't necessarily believe putting more researchers in charge is the answer. But putting more researchers into C-level roles, perhaps as chief strategy officers, may help.
Bringing data to the table
"I like to have a quant jock or a researcher by my side in running a business," Mr. Stuart said. "I like to have direct access to that expertise."
The other solution, he said, is to make research a bigger part of general marketers' training.
He said he sees hope for more "fact-based decision-making" taking hold in marketing through such parallels as Major League Baseball, where the numbers-driven "Moneyball" talent development of Oakland Athletics General Manager Billy Beane has gained a growing foothold in recent years.
"That kind of change is generational," Mr. Stuart said. "It's going to be a long, slow slog."
If baseball's any indication, he's right: The A's are playing under .500 this year.