The Broader Implications Of The Communispace/Promise Deal For Market Research

Last week the news broke that U.S. based MROC pioneer Communispace was acquiring U.K. Co-creation Consultancy Promise. Here is the gist from the press release:

London – November 28, 2012 – Diversified Agency Services (DAS) announced today that it has acquired the London-based innovation and co-creation consultancy, Promise Corporation. DAS plans to fully integrate Promise into Communispace, the online insight community leader it acquired last year.

Communispace has been the fastest-growing consumer insights firm in the U.S. for the last three years, delivering unparalleled consumer engagement via private online communities, with nearly 600 communities launched to date. This acquisition allows Communispace to marry its unique research approach with the strategic consulting tools and processes that Promise has successfully pioneered over the past decade.

The integration of Promise is Communispace’s most significant step to date in expanding its global capabilities. Through the acquisition of Promise, Communispace will significantly expand its London team and complement its global network.

I was privileged to have a conversation with Communispace CEO Diane Hessan before the announcement was made and chat about the thinking that led up to the deal. My key takeaway from that conversation was that the predicted consolidation of differentiated tech providers, consulting firms and agencies is now well underway, especially when the core of the technology is based on providing insight-driven engagement in flexible ways.

Let’s follow that for a moment and look at the strategy here from each player’s perspective:

Omnicom:

Omnicom describes themselves as  “a strategic holding company of the top creative talent from around the world that it can connect to meet any of a client’s marketing and communications challenges. Operating in over 100 countries, Omnicom Group’s connected global resources service over 5,000 worldwide clients.”

Stop and think about that. Here is a company that exists to build a network of differentiated global firms to address the marketing related challenges of clients, which in 2011 had global revenues of 13.9 BILLION dollars generated from meeting that objective. Essentially they are a highly effective investment vehicle in the marketing services space, and they have just made a significant bet on the growth of a community driven consultative co-creation agency. As a recent Fast Company article stated “When Co-Creation Becomes The Beating Heart Of Marketing, Companies Win“, and obviously one of the most successful companies in the world is buying into this idea as well. As reported by my friends at Research.live:

…the integration will be Communispace’s “most significant step to date in expanding its global capabilities… [because] having the ability to tap into consumers 24/7 has never been a more important engine for growth, as insights and marketing teams become increasingly strategic and need more meaningful and actionable interaction and engagement with today’s fast-changing consumer.”

Communispace:

During my conversation with Diane (who is a visionary executive with a fantastic track record of success herself) she told me that when she approached the Omnicom leadership team with the idea of needing to acquire Promise in order to capitalize on the opportunity she was hearing from clients to deliver more value-added services that spoke directly to the need to drive innovation and engagement through co-creation, they didn’t need much convincing. It was the logical extension of their investment strategy as well as the business of Communispace.  As she stated in the press release:

The partnership between Communispace and Promise will allow major brands to engage target audiences continuously and strategically on their most pressing business issues. Over the past decade, these two companies have worked with and delivered breakthrough results, for nearly 200 of the world’s most admired brands, across a wide range of industries.

“We have been watching Promise for years, as they have mastered co-creation and helped executives act intelligently based on what they learned from consumers,” said Diane Hessan, president and CEO of Communispace. “Everything about our business is focused on doing great work that matters, and the experience and dynamism of the Promise team is going to help us make our work matter even more for our clients.”

Diane saw this deal as highly disruptive to the industry status quo and I tend to agree; the combination of the Omnicom network, MROC model, and co-creation focused consultancy paints the picture of what the next generation of marketing agencies will look like. We have seen it to a smaller degree with the movements of Edelman and Brunswick Group to integrate innovative research-based approaches into their consulting practices, and of course WPP, Publicis, Interpublic and Dentsu have the potential to do similar things (to a degree), but this is the first time that I am aware of that such a holistically integrated model has emerged. It’s good news for Communispace and their clients, and it’s good news for all the other stakeholders involved. Hat’s off to Diane for once again showing why she is one of the most successful leaders in our industry.

Promise:

Promise is a great example of the “new breed” of insight consultancies that have emerged from Europe (especially the U.K.) over the last decade. Like their cousins BrainJuicer, Face, Mesh Planning, Insites Consulting, Join The Dots and a host of others they owe more of their DNA to marketing organizations than to traditional MR firms. Considering most are led by former Planners, that should come as no surprise, but the speed with which these firms have grown and the success they have had in developing approaches that are driven by the business issue vs. the method is surprising considering the growth model of most traditional MR firms. From their perspective this partnership offers several benefits

“Just as Communispace invented the idea of using online communities to listen to consumers, we are excited about our combined vision to reinvent the ways organizations gain insights and turn them into innovation and growth,” stated Charles Trevail, CEO of Promise Corporation. “Communispace gives us scale and an infrastructure which brings tremendous new opportunities to our clients and our people.”

It’s the perfect marriage of business issue focus with scalable technology and deep reach into marketing organizations (not just MR departments) that will allow the Promise team to truly craft impactful solutions to help drive innovation and growth for clients.

The Client:

Now this is where the rubber meets the road and the true implications of this deal start to become apparent.

First, lets look at things from a strictly business strategy standpoint:

• In an increasingly competitive and complex marketing climate more and more clients are looking to the insight function to help fuel competitive advantage.
• Competitive advantage often is focused on the front end of innovation; creating new products or services that will drive target customer engagement and spending.
• Data alone doesn’t deliver insight; it informs it. Insight is supported and driven by a variety of factors, but ultimately it’s people who uncover insights and  develop winning strategies based on them.
• Client organizations are not experts in insights, they are experts in their business. They need strong multidisciplinary partners to help them get to the point in the process where their business expertize can be applied to the insight process.
• Supplier partners that can help client organizations understand, engage, and deliver value to customers through the insight process win business and grow.

This partnership helps meet that need for clients in an instantly globally scalable way. It’s the type of integrated offering they have been clamoring for but has not been fully delivered on by agencies, consultancies, or MR players in a big way. Now all the pieces are there to give them what they want and I expect we’ll see a significant increase in client penetration and revenue  growth for Omnicom/Communispace/Promise as a result.

So what does all this mean for MR as a whole? Well, of course I have a point of view on that.

Last week I also had the chance to spend some time with numerous client-side leaders at an MRII Board meeting. I was asked to lead a panel discussion about Big Data and the implications for market research of this emerging model. In setting the stage for that conversation I used this quote from Marc Pritchard, Global Marketing and Brand Building Officer of P&G regarding the companies view on how technology (social and mobile especially) were changing the game for them:

“To address these [technology] forces, our vision is to build our brands through lifelong, one-to-one relationships in real time with every person in the world,” (emphasis added) Pritchard said. “The power of everyday people is driving monumental change and people power favors brands like ours. We have trusted brands that are part of everyday life. We genuinely care about serving people with superior benefits and doing good.”

“Technology will mean that people will increasingly expect brands to understand their unique needs and deliver,” Pritchard said. “We want P&G to be the first to create this trusted, indispensable relationship because it will create greater loyalty, more purchases across categories, and more sales at lower costs. Achieving this vision requires some fundamental shifts in how we operate.”

The article in Digiday I lifted that quote from goes on at some length to discuss how social and mobile technologies will be leveraged to drive engagement and understanding of consumers to increase business value and it’s a perfect validation for why the growth of a community-driven insight consultancy model, especially one that is focused on co-creation, is perfect for the new age of socialized branding. I used the quote to illustrate the role that Big Data would play in helping to inform a significant aspect of the “one-to-one” model by default and most folks at the MRII event agreed with me. During that conversation we also came back to the idea that although “Big Data” will be massively transformational for the research industry all along the value chain, it will force other changes that we are already seeing begin to play out, with the Communispace announcement being one such example.

To bring that idea full circle I believe that what we’ll see evolve over the next few years is a trifecta of broad insight approaches that collectively will fuel brand relationship development:

1. “Advanced analytics fueled by “Big Data” models that will tell the bulk of “who, what, where & how” concerning consumers. I include in this many different data channels including CRM, POS, search, social media, mobile, geolocation, video, facial scanning, media metering, and macro-polling/ratings. Panel companies that embrace social may fit here as well, as will social listening and text analytics. Not much of this will come from the MR space, although some MR skills will be appropriate for the data synthesis and analysis aspects of the model.
2. Traditional research (quant/qual) to fill in gaps of information among specific groups or on topics that a deeper dive is necessary to help get closer to the “why”. This may largely be delivered by companies like Google, Facebook, Twitter, and a variety of DIY applications. Companies that have proprietary data. specialized techniques or niche experience, or data currencies will also fit into this category.
3. The rise of the Insight Consultancies. These firms will be a mix of strategy consultancies for high level enterprise planning and more specialized organizations that will likely look an awful lot like Communispace/Promise and the other firms emerging that focus more on engagement, understanding, and creating business impact via insight-fueled consumer relationships. Ultimately these companies will answer the “why” informed by the Big Data and Research channels. They will be the true conduit of generating competitive advantage for brands and will hold a significant level of influence and prestige within client organizations.

The Communispace announcement is highly disruptive, but it will take a bit of time to see just how much. Look for similar efforts to follow in 2013 by others positioned well to leverage their organizational assets (WPP, Publicis, etc…) and deep pockets for acquisitions. I suspect it’s a good time to be a company like Insites, BrainJuicer, Face, KL Communications, etc.. or for any technology provider that helps brand engage and understand consumers on a deeper level than traditional quant and qua. Vision Critical, Gutcheck, Qualvu and Revelation are also probably pretty pleased with this development and are in good positions to capitalize on the change it signals.

We just saw a significant glimpse of the future of market research in the Communispace/Promise deal; I for one can’t wait to see how the rest of it unfolds. What do you think?