WPP is selling off Kantar. The global advertising juggernaut is looking to offload its market research division after missing earnings expectations in a disappointing Q3.
Despite making up 15% of WPPs sales, industry analysts view Kantar as underperforming.
WPP CEO Mark Read said that the company would look for ways to retain strategic links to Kantar in order to “ensure benefits to clients are realized."
On the surface, it may seem like Kantar’s sale is nothing more than collateral damage stemming from WPP’s former CEO and founder, Martin Sorrell, stepping down in April.
But if you look more closely, you might conclude that WPP might have just signaled the beginning of the end for traditional market research companies.
And that brings us to this week’s topic.
Market research is one areas of our industry that’s suffered greatly from the rise of digital marketing. Case in point, Greenbook’s 2018 Q1-Q2 Research Industry Trends Report picked Kantar as the research industry’s most innovative supplier.
If they’re the best at what they do and WPP has to sell them off because it’s the worst performing division in the business, what’s that say about the rest of the industry?
And if you look at Google Trends, worldwide interest in market research has declined by nearly 80% since 2004. Sadly, Kantar may just be one of the best brands in a dying category.
Today, we have dozens of cost-effective options that make classic market research seem like overkill. Why spend $100k when you can get 80% of the value for less than $20k?
While some research questions require more rigor, this scenario underscores the three major issues that market research companies will need to fix if they don’t want to be disrupted by new players in the space like Brandish Insights.
First, make no mistake that the fall of market research is absolutely a question of value.
Given the choice, most market research companies will err on the side of more is better. More questions. More respondents. More statistical confidence. More pages in the final powerpoint presentation. The thicker the binder, the more impressive the results.
And when you add it all up, it’s not uncommon to pay $1,000 per slide for a deep-dive study that can end up being a hundred pages or more.
Today’s marketers, especially ones who work at startups and fast-moving brands, are much more focused on the two or three things they needs to know to drive performance in the current or next fiscal periods. They simply just don’t need the $100k novel.
Second, technology is disrupting market research in two very profound ways.
And the industry isn’t necessarily rising to the challenge. Jon Puleston wrote on the Lightspeed blog, “Researchers must counter the organizational belief that “big data” can provide all the insights businesses need to be successful.”
Honestly? Good luck with that. Machine learning and AI are here to stay. Market researchers should be rushing to embrace automation in their processes, not starting a smear campaign against the robots in order to justify their prices.
And finally, and perhaps most importantly, market researchers will need to increase the actionability of their work if they’re to help their clients realize the financial benefits that come with the research insights.
The American Marketing Association’s Zach Brooke said it best in his article entitled, “The Market Research Industry Is Being Squeezed by Consultancies.” He said, “The concentration on tactical execution to the exclusion of strategic advice often relegates research companies to also-ran status if and when CMOs decide to seek help for answering the big-picture questions about their brands.”
You can be the best analyst in the world and find every insight possible, but insight without action is like strategy without tactics. Financially, it’s the investment without the return.
So what can you do? If you’re in the need of market research, make sure your partner delivers the right amount of value, utilizes technology to keep costs down, and provides actionable insights that lead to a measurable return on your investment.
And that’s how you can help fix marketing. We’ll see you next time.