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The CEO Series: Predictions for 2015 by Dave Sackman of LRW

In assessing our industry, we must do for ourselves what we do for others: take a holistic look, incorporating rational, emotional and less-conscious drivers.

 Businessman staring into a crystal ballcrystal

 

Editor’s Note: I am a big fan of Dave Sackman, CEO of LRW. I won’t gush here on all the reasons why, instead, he recently posted his predictions for 2015 and I’m going to share them with you as part of our ongoing CEO series. I expect you’ll understand where my esteem for him comes from after reading it, and share it. It’s good stuff.

 

By Dave Sackman

I’m not a fan of nostalgia, after all, it isn’t what it used to be. But since it’s already the midpoint of this decade, it’s a good time to look backward and forward to 2020. I see an exciting time for our industry.

In the 80s, through the 90s, researchers often focused more on the science and craft of market research, than on the way it could actually impact business results. Through most of the 2000s, the rising influence of procurement departments and the pressure to lower the cost of research caused everyone to chase less representative internet samples at the expense of more rigorous sampling.

The first half of this decade has been focused on a swirl of tech driven innovations, including the rise of communities, social media listening and mobile data collection. I believe the next period in our industry will be characterized by increased bifurcation of data collection and consultative market research, with consultative researchers delving into the whys behind consumer behavior. They will also apply new, more sophisticated analytic capabilities to integrated data sets to help client companies turn research insight into business impact.

My prediction that there will be an increasing bifurcation between data collection and truly consultative market research is nothing new, I’ve been saying this since the early days of the internet. We’re seeing this trend play out, and I expect it will continue. Internet sample companies continue to grow rapidly and attract capital at nice multiples, despite a flat industry. The DIY sector of the industry is now entering “its time,” though I don’t believe that it will greatly cannibalize the full-service market research industry because the SurveyMonkeys of the world cannot consistently provide client companies the type of insight that can drive strategy and improve financial performance. Accordingly, highly consultative “boutique” firms will likely continue to be the best solution for companies seeking to answer complex business issues in an increasingly complex marketplace.

I believe that the industry’s interest in what I call “applied neuroscience” or the “intersection of neuroscience and behavioral economics” is appropriate, and that there are real opportunities in this space to help marketers better understand their consumers. As with any new innovation though, the key will be separating those who really understand the science and can develop tools that effectively help us understand consumers more holistically. I believe that there will first be a pruning of those who currently offer tools in this area to those who really understand the science.  Over the next 5-10 years, there will be a proliferation of companies who both offer the tools and truly understand how to use them.

I also believe that the industry’s new orientation toward being “data agnostic” will grow. Just like the industry took nearly a decade to embrace data collection via the internet, I believe the industry will figure out that it must rely on more than survey data to answer business questions. There is, as everyone recognizes, a plethora of data — social media, customer geo-demographic, digital exhaust, etc — available that can help answer client questions. While right now, specialty companies have sprouted up to offer some of these data analytic capabilities, within the next 5 years, all good consultative research companies will be integrating a wide variety of data sources into their engagements.  These analyses won’t be the simplistic ones that many employ today, but will instead be smart, “so what?” analyses, just like the ones built around survey data.

The pace of innovation in our industry will continue to ramp up, and I will continue to warn my colleagues to avoid the fascination with “shiny new objects.” Now, that doesn’t mean that I’m anti-innovation. In fact, I’m quite oriented toward innovation, but I don’t support innovation for the sake of innovation. I think that Lenny Murphy has done a great job getting the industry to care about innovation, and hope he and others like him continue this work. But people must employ new approaches because they produce better, more actionable results — not because they are new or are what people are talking about.

In assessing our industry, we must do for ourselves what we do for others: take a holistic look, incorporating rational, emotional and less-conscious drivers. We must see the new types of data influencing our methodologies and choices, and be sophisticated in our approach to this changing world, so that we can deliver on our promise, which is always to provide truly consultative, business recommendations that create meaningful impact.

Happy 2015.

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4 responses to “The CEO Series: Predictions for 2015 by Dave Sackman of LRW

  1. David Sackman has written a very though-provoking article. I agree with his perceptions or the past, current, and future trends in our industry. However, I am not sure what we call or “name” our industry anymore, since it appears to be a confluence of technology, biology, perceptions, data, physiology, etc. My primary concern is that now that we are moving away from random samples, margins of error, confidence levels, etc. do we have a scientific basis and representativeness that supports and confirms our hypothesis and insights? How do we prove that our insights are truly objective and have some semblance to behavior in the real world? Perhaps none of this is needed anymore, but I think data clouds, big data, right brain and left brain thinking, neuroscience, etc. all sounds good but will it truly help to understand behavior not only for products and services, but for understanding politics, public policy, and crisis management? We are truly entering a “Brave New World”, but will it be for the betterment of mankind or cause our own destruction?

  2. David – nicely said! Nick, I have to admit while I’m all for the betterment of mankind, it’s not what I do for a living. Except for those involved in marketing non-profits, I’m guessing none of us are. Nor am I sure we should be trying to include politics, public policy, or crisis management in our portfolio.

  3. David, well said!! I agree with your assessment of what has been and what is coming. One build to the “world view” on a prediction: the machines are here where data machining of results from DSM will override fact based research. This will likely overtake quantitative research for a time, until the data & modeled analytics can be better harnessed. Big & Fast will overtake our marketers until a large misstake is made in market. Then we can anticipate that a balanced outcome for bridging the heat of neuro and emotional data with cold logic to achieve actionable results.

  4. Great article Dave! What I think is missed often by traditional researchers is that market research made a great leap when it left the confines of product research and doggedly pursued motivation. It’s not that motivation isn’t important(it is) but more that stat based research does a very poor job of initializing intent. Lots of folks continue to lament the demise of trackers and constantly ask how can we be sure when we leave the confines of sampling and defined parameters that are present in quantitative research but the reality is that measuring a non-quantifiable entity such as attitude with a quantifiable tool is a bit like trying to determine your weight by using a yardstick.

    The reality is that there are simply better ways to evaluate trends these days that deliver on the promise that traditional research can only imply. The reason I got into research 20+ years ago was because it made no assumptions, it let the data speak. Now, we spend inordinate amounts of time trying to validate assumptions and “predict” behaviors using tools that were designed to track response to products, market conditions etc while largely ignoring the proof in the pudding that is big data.

    Just as data analysis that used to take weeks to churn is done in minutes, big data has replaced asking questions and delivers answers in real time.

    The other piece of the puzzle that is rarely discussed is that the fact that the Internet, digital tools etc. have created a two-way street. Consumers are much better and much faster at resourcing information on a company from multiple sources that organizations are at understanding the facets of a consumer for obvious reasons.

    Consumers are embracing this power and using collective reasoning from multiple sources to make decisions and they are doing it more effectively everyday. Like most things, the more information you have, the more discreet your choices become. Because consumer confidence/brand equity in turn influences investors and financial standings, companies often find themselves reacting rather than pro-acting, which starts a vicious cycle.

    The bottom line is that complaining about the fallacies associated with DIY research, big data or any other resource doesn’t resonate with management, nor does it gain any equity for MR. For as long as I can remember the debate over the value of census research has raged even though it often adds more immediate value than tactical research and now when coupled with other data resources it paints a solid picture that is often more accurate than survey data and management is noticing.

    The value of research has grown in most organizations, it just hasn’t been driven by research departments and that is the real irony. Ten or more years ago, the decision to move away from insights was made by the industry with the promise that the pace of Internet response would allow for more research and higher profits without having to invest in the discreet policies/politics of an organization. McKinsey, Bain etc. saw the opportunity. What’s happening to MR now is a natural correction brought on by our own policies. The value of data resides in its application, not its collection. It’s not likely that many of the “new ” techniques will survive because they are expensive and so far removed from the bottom line that it is hard to validate an ROI and in fact, the definition of research has changed.

    Research isn’t an entity these days, it’s a collective view of many facets of the brand and it’s part of an eco-system of data that is constantly evolving. It’s a journey, not a destination and it is considered pretty robust in value.

    For research to survive is has to innovate, but in a way that complements the existing resources, it’s got quit trying to trump them. Innovation that resonates will have to inform and add value to the eco-system and it will have to facilitate insights. That likely entails next generation products in behavioral economics and tools that may inform at a granular level that can be rolled up into a larger picture, i.e. product development, co-creation, etc., tools that allow consumers to invest. It wouldn’t be surprising to find the virtual consumer in the boardroom soon. He or she may be the collective virtual representation of the market defined not on predictive analytics but rather on preference and she/he may be configured in many ways according to the insights needed.

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