In a post a few weeks ago I outlined the major disruptive trends in market research this year. One of those trends was automation, and indeed that is shaping up to be one of the dominant forces in the industry, so much so that several organizations have asked me to do a deeper dive analysis of what is happening in that sector. I can’t share the entire report (yet), but I am going to use a few slides in this post to help support my point that the game has been changed in a very fundamental way by this rapidly growing new model.
First is my view of the evolution of this trend, with a basic segmentation of the types of models being deployed and some of the companies that exemplify each Here is my take (click on it to make the image bigger):
This isn’t an exhaustive review to be sure, and other players are emerging or pivoting in this direction almost daily. In general, if a company is a player in the insights technology sector (sampling, data collection, analysis and reporting) then they are most likely looking at this idea, and the more of that process value chain they own, the more likely they are to be looking at embracing automation as a driver of the research process. The companies that are already dominating in this arena are Zappistore, Instant.ly (formerly uSamp), Google Consumer Surveys, Toluna, Research Nowand Qualtrics, but others are quickly developing their own offerings. Of those companies, Zappistore currently has the most traction and is the market leader today.
In my analysis I call out that no major Full Service player had fully embraced the “APPification” of Research (a term I just stole from Peter Orban based on his post here) as a wholly owned internal initiative. Millward Brown and TNS loading “apps” in Zappistore are important signals by those firms, but Zappistore is not owned by either of those firms or by Kantar as a whole, so those moves are inherently partnerships. However, yesterday that changed when Macromill announced their 2014 results.
When the MetrixLab/Macromill merger was announced last year I predicted that they would quickly begin to position themselves as a game changing force in the industry, and indeed, Han de Groot is wasting no time in announcing exactly where their strategy lies, and the App Market model is the center point of it:
“Our focus has been to innovate the back end of the research production process. Today the market is ready for automation of the front end. Speed to insights is a top priority, whether we engage with insights managers or marketers. Our clients want fast results through highly intuitive interfaces for data and insights reporting. We believe we’re well positioned to compete in this space because we own the entire value chain of market research: from consumer audiences, to survey technologies, from reporting tools through professional analytics. Most new competitors in the market research automation segment lack research professionals who provide additional on demand analysis services. Instead of offering generic survey tools, we focus on added value solutions such as digital and mobile ad pretesting and advertising campaign tracking. We will transform the results delivery experience by combining highly intuitive reports and dashboards with on demand consulting services. By leveraging our research expertise and staying true to our technology DNA, we will take the “MR App” market to the next level,” adds Global CEO Han de Groot.
And I believe he is right. A huge amount of the research process can be (and is being) automated, which lends itself to business issue specific templating of solutions. The hallmarks of what is easily (and not so easily) “appified” is detailed in the graphic below.
This is a significant piece of the market. If we look at date from the most recent ESOMAR industry study, up to 57% of all traditional research spend is primed for a shift to the “App Market” model:
Using the Expanded Definition by ESOMAR as the basis for calculation, online only approaches account for 55% of global spend at $33.5B.
|Online Approaches||% Of Spend||Online Only Revenue|
|Social Media Research||16%||$10,000,000,000|
|Web Traffic Analytics||2%||$990,000,000|
|Sample & Panel||1%||$920,000,000|
If is being done online, it is most easily automated, and if it can be automated, it can be templated. Those factors, combined with a large scale user based, are triggers for “APPification”.
For any company that is a tempting market to go after to be sure, but for a company like Macromill it is more than a target; it virtually defines their business and is the next logical step in their development. Remember, this is a company that is guided by a highly successful and visionary CEO, has the backing of Bain Capital, has a strong technology infrastructure and development capability, and has a world class full service organization as well.
It’s that last part that is the real kicker here: although more and more of the research process will be “Appified”, including much “check box” research like testing and tracking, there will always be a need for a strong service component by some clients and for many other types of research. Most of the current players in this space are tech only offerings, and although that isn’t slowing their growth noticeably yet, at some point they will have to develop partnerships or other resources to expand their appeal to clients who need more front-end or back-end support.
Macromill on the other hand, already has those resources in place. They effectively control the entire value chain of research for their clients, and will likely continue to expand that via an extension of their current model of adding in new data channels, technologies, and expanded market penetration.
Don’t take my word for it though. When I received the press release on their earnings, I reached out to Han to get his take on where they were going next. He was kind enough to answer my questions and agree to let me post them here. Read this carefully folks, because Han is laying out a roadmap that I believe strongly is indicative of the path for our industry over the next 5 years.
HDG: I take a portfolio approach to the growth of our business. We have built a portfolio of countries, solutions and new ventures – like any other business, sometimes some are hot and some are not – all happening in cycles. In 2014 our majority owned ventures: survey audience provider PrecisionSample, our joint venture with Dentsu, called “DENTSU MACROMILL INSIGHT” and Netherlands based social insights specialist Oxyme have all performed very well against our 2014 plan.
LFM: You’ve been in your new role as global CEO for a few months now; what has been the biggest surprise for you so far?
HDG: No surprises, MACROMILL and MetrixLab joined forces in 2014 after 8 months of very detailed business planning; what surprised me though in early 2014 while evaluating the Japan MR market was that unlike any other large market Nielsen, KANTAR, GfK and IPSOS have a very small market share in Japan. MACROMILL and Intage have significantly been outperforming the global big 4 in Japan during the last decade.
LFM: Macromill is the first major full service company to bet big on the “appification” of the research process. That seems counter-intuitive for most traditional research suppliers that rely on large margins for the “sample/field/analysis” phase of market research to drive revenue. What is driving that strategy?
HDG: Over the last 10 to 15 years the Internet has squeezed inefficiencies out of the back end ‘production process’ of market research; over the next 5 years the internet will do the same to the ‘front end’ of market research; it will take inefficiencies out of the research selling/buying process as well as the research delivery process. Look at what a typical order process looks like today between a client and a vendor – count how many hours are lost in communication back and forth; it is an old fashioned, inefficient process today. Speed to insights has become essential in today’s world: Netflix has won from Blockbuster – how we order and deliver market research will radically change in the same way. “Appification” of market research will make market research (finally) more accessible to marketers, who are not willing to wait weeks for results; they want results within hours and days! Managing the automation behind the app won’t be the real challenge; the true challenge will lie in providing an excellent delivery experience. At MACROMILL we will combine “appification” with great results delivery experiences, that will be our USP. We can learn from Disney and translate the Disney experience to a results delivery processes – we need to immerse clients in the world of their customers. This might sound conflicting with “appification” at first, but I assure you that “appification” will advance our market not only in terms of the order process and the delivery process, but will most importantly advance our deliverables, leading to new results delivery experiences!
LFM: Are there key capabilities or approaches that you’re excited about potentially adding to your marketplace?
HDG: We’re still considering our strategy towards “market places” – I expect that many vendor owned MR market places will be introduced. For us, today, it is all about content, more than the market place; we focus on developing apps with a specific topical focus, solving a specific client problem, increasing speed to insights. Whether our apps will be sold on and downloaded from our own App Store or from Salesforce’ AppExchange or Oracle’s App platform, that is to be determined. Today’s apps are ‘order spec’ applications with standardized reporting functionality, the future lies in great results delivery experiences – take a look at the Bloomberg app, simple but highly effective for making better and faster investment decisions.
LFM: In looking ahead at 2015, what do you consider to be your primary strategic imperative?
HDG: The most important one will be attracting top talent. We have just hired a great new global CFO from GE and CTO from IBM, to be announced soon. And we have to make ourselves known – together with Comscore we have been the fastest growing company in the MR industry for the last 15 years since our inception, but nobody knows us; we some work to do!
Business growth will come from adding new markets and distributing our innovations to the markets where we operate; “appifying” our proprietary MR solutions; integrating our social brand insights solutions (from our Oxyme venture) with our survey based brand and campaign tracking solutions. We have just launched a beta version of a WhatsApp type of interview tool in Japan, a beta version of a ‘Big Data Dashboard’ in the Netherlands, and an iphone/android based product scanning app in Japan that enables us to collect both survey and purchase data from our audiences. We’re also rapidly expanding our consumer audiences in LATAM, Africa and SE Asia – we want to maintain full control over the value chain of market research.
LFM: Thinking of 2020, how will Macromill look then?
HDG: Great question, but after sharing all of the above, I would like to keep this one secret!
So there you go folks. The early success of the tech companies pioneering this model has now given birth a large, global player that is going to push it to the next level. This shift will be as fundamentally game changing as the advent of the internet was 15 years ago, and our industry will change dramatically on all levels as a result.