WARC notes that “Procter & Gamble, the FMCG giant, is combining consumer insights and its global reach to pursue ‘purpose-driven branding’ around the world.”

After reading Rachel Botsman’s book regarding collaborative consumption, I wrote this back in November 2010:

“And, when it comes to external change, the world Botsman paints suggests some extreme levels of change in product innovation (crowdsourced), branding (from status to purpose and me to we), product usage (shared) and product lifecycle (longer). It’s no exageration to say that the future she paints would turn marketing and marketing research upside down.

If she’s right, brands will become much more about shared purpose and passion. And, they will be built or destroyed by a corporation’s reputation. But, this reputation element will no longer be ethereal. As I’ve noted before and as Botsman states in her book, by the end of the decade we are likely to have a kind of online reputational currency for both people and corporations (she calls these “reputation bank accounts”).”

I now think it is clearer than ever that brands as we know them will evolve much more toward a shared purpose model, for several reasons:

1. Social media and crowdsourcing will, over time, habituate consumers to thinking more about “we” rather than “me” when it comes to brands and products.

2. As the top-down, broadcast-driven brand model collapses marketers and consumers will join together more closely to jointly define brands and products.

3. Marketing in the developing world will take on a greater development focus by attaching a brand’s purpose to the social aspirations of the target country. In this instance, I think education-literacy, clean water, and equal rights for women are strong candidates for purpose connection.

And, ultimately, it wouldn’t suprise me if brand migrates entirely to purpose and reputation.

As one might expect, the speech was heavily future and trends focused. So much of what he discussed (especially America’s hyperfocus on the future and “future tense”) was reminiscent of David Brooks’ book “On Paradise Drive.”

Although the audience was treated to a number of wonderfully funny nuggets, like “social notworking” (time wasted at work refreshing our social media presence), Tchong outlined several useful “ubertrends”:

1. Our digital lifestyle (merger of humans with their technology)
2. Time compression
3. Technology-created control freaks (eg expecting immediate responses to email)

From this presentation, there were several interesting learnings.

The first is that this emerging peer to peer world where information is abundant will create a highly transparent society and market. Bad customer service will haunt companies much more in the future.

The second is that while these are ubertrends, there are always countertrends in reaction. For example, there is significant time compression today, but profitable opportunities in slower experiences, products and services (eg yoga).

The next is augmented reality. One early example of this phenomenon is layar. Now imagine this technology enhancing our context of more than just physical locations. Imagine this technology giving us additional context about people, the salesperson on the shop floor, a product in our hands (using RFID) etc. This will take transparency to the next level.

Finally, a great question to ask in the course of this discussion of the future and change is what doesn’t change. For example, rituals are culture conservers. How can marketers embed their product within timeless (or emerging rituals)? How can marketers create new rituals that resist change and support their product? Sometimes we can lose sight of things that don’t change when we focus on trends too closely.

It was all strategic foresight.

Tom, with his focus on the trends driving our futures, represents one aspect of where I believe market research is headed.

Luckily, I had the opportunity to talk with Tom before his presentation and as luck would have it he is heavily involved in strategic foresight and the Institute for the Future.

One discipline or methodology that Tom utilizes is tracking macroforces by meta analysis of books. Some of the more interesting trends he sees from the meta analysis are a reappraisal of capitalism along ecological and social justice lines, the rise of creativity as a key force (see Daniel Pink’s “A Whole New Mind”), and a better understanding of the consumer (via behavioral economics and positive psychology).

One of Tom’s more provocative questions was what business rules are or will replace Michael Porter’s famed five forces. I think we’re already seeing an opposing paradigm emerge along mesh business lines utilizing ad hoc collaboration, open networks, shared purpose and community engagement based on transparent reputation. On this last point Tom presented what Coca-Cola is doing with community and environmental groups to reduce waste (energy and water) and shrink environmental footprint while increasing profits.

Tom closed with something many of us have been mulling for a while now.

What will a brand be in the future?

My contention is that brands will change dramatically from “me” to “we”, from status to purpose, and from consumption to particpation. Tom argues along the same lines – that the emergent brand is based on “societal construction.” It’s the “should brand.”

We know from research released by Pew today that 4% of online Americans and 8% of online Americans under 29 years old are already using these services. Pew is now tracking this trend. And, while we know from the research that there hasn’t been much increase in reported adoption since May, we can reasonably expect that (a) access to these services will be ubiquitous in a few years as consumers upgrade their mobile phones-devices and (b) this technology is utilized by the tech savvy Millenials.

So what are some of the implications?

At the social level I believe that we will see a great sorting out with some people adopting this and other technologies aggressively and others becoming the new off-gridders. It will be interesting to watch. Take the simplicity movement for example. Some in the simplicity movement would argue that they can make their lives simpler with new technologies. Others in this movement seem likely to reject many of the same technologies. The young, being socialized with this technology are unlikely to fit within this decision matrix. We can expect them to adopt this technology.

In addition to the simplicity reaction against location based services I expect a privacy-driven reaction. Again, most of the young may not view this technology as a privacy threat, but older people almost certainly will. Those folks will choose not to participate.

On the bright side, we have heard sociologists bemoan anomie and focus on “bowling alone.” Well, location-based social media certainly seems to be one tool that fights against a disconnected, socially atomized society. These services could bring people together in new ways. For example, consider interest swarming. People can now congregate with like-minded, or similarly interested peers. This kind of swarming is likely to lead to culture exchange and possibly collaboration. This strengthens civil society and threatenes repressive political regimes.

Things start to get very interesting when two additional advances are made:

1. When geolocation is used to help people make a connection based on their physical proximity to each other.
2. When geolocation is merged with augmented reality and social currency.

First, I expect that the geosocial trend will lead to an environment in which like-minded passengers on trains or like-minded pedestrains are introduced to each other by this technology when they come to within a pre-set distance from each other. Dating services watch out. You may have a new competitor.

But the true killer app is when geosocial merges with augmented reality and social currency. Augmented reality apps already exist. See Junaio. Now imagine that this app gives you additional context (such as social status or trust score) on people you meet as well as places you walk past. This will be like Angie’s List for humans and it will be accessed via AR glasses. In a way, it is startling how close we are to this now. Geosocial technology is expanding quickly. Augmented reality is doing the same. Social currency experiments like the Whuffie Bank are completely achievable. And, this exact future has been developed and explored by Cory Doctorow with his idea of “whuffie.”

The next question is how this might impact MR.

First, geosocial gives location-based businesses a way to interact with their biggest fans and customers. Research can be built into this relationship easily, as simple surveys could be triggered at check-in or check-out. In fact, promotions could be tied to top consumers and measured like a personalized groupon.

In addition to this, geosocial will only make a firm’s reputation more transparent, measurable and valuable. If there are is little consumer interest in “checking-in” to a restaurant, department store, dealership, etc., of if the comments are largely negative, then the downside of a negative reputation will begin to bite. Reputation research will become critical, and not just reputation tracking. The key will be finding actions that a firm can use to improve its reputation in a truly transparent marketplace. For example, what if any consumer can add information to a firm’s geotagged physical address so that any other consumer could read this information? The upside is vastly more consumer context about the world around them. A consumer might note that a startling number of people have tagged a certain QSR in their neighborhood with health-related complaints (like food poisoning). A jewelry chain’s decision to sell conflict diamonds or diamonds mined at slave wages could be tagged for all to see. I would imagine that business, in return, would want control of their own geographic coordinates. This will set up an interesting policy fight between free speech and property rights and who owns the geographic coordinates.

This is a noteworthy development.

The course will focus on social media, online communities and virtual research platforms.

Until now, the Burke Institute was fairly orthodox and conservative in its offerings. Their courses, all very solid, focused on surveys, focus groups and analytics – the traditional tools of the “Asking Epoch” of market research.

But, times change and most of market research is now behind advances of the wider insights industry. The market research industry may be struggling, but the wider insights industry is doing quite well and innovating rapidly.

The Burke Institute is a good proxy for tracking how traditional market research catches up.

I’m not criticizing them. They’re great folks that do great work. But they are playing catch up.

I anticipate that the Institute will roll out the following classes in the near future:

1. Mobile research tools and techniques
2. Insights Communities, UGC and Co-Creation (this deserves its own class)
3. Social media (again deserving its own class)
4. Neuromarketing or Biological Response Research
5. Eye Tracking in Ad, Packaging, Retail Environment and Menu Testing
6. Prediction Markets

Tracking the rapidity with which they roll out these new classes will be a good gauge of industry adoption.

In the meantime, market research professionals should support Burke’s evolution and attend the Sep. 30 – Oct. 1 class or send their junior staff. Send the market a signal. If the class oversubscribes dramatically, then the Burke Institute will react to the signal, offering more classes in this area andexpanding their new offerings.

There was such a great response to his question (Are the kids alright?) that he revised and extended his remarks.

It is worth reading the comments.

I maintain that there is plenty of young talent in the industry, but that these talented folks in their 20s are in fields that are not (and may never be) associated with “market research”, even though these fields may ultimately replace what we call “market research” today. The next generation of market research may never think of themselves as “market researchers.”

This leads me to a much wider point.

If the industry were my client, I would advocate that they rename and rebrand. For a LOT more detail on this, see pages 7 and 8 of my white paper on the future of market research.

Highlights:

1. Only 35% of executives describe their in-house MR function as “best in class.” (see page 4)

2. Although corporations should strive to move their MR departments from “order takers” to a “source of competitive advantage”, “almost 90% of the companies…follow a more traditional approach to market research” (Translation: 90% are stuck in “order taker” mode.) (see page 4)

3. “On average, only 20 to 35 percent of a company’s market-research budget is devoted to strategic studies.” (see page 5)

4. There is a CLEAR need for what I have described as “Insight Management” – getting the most out of past research and mining it for synthesized insights. From the report: “Money is spent on research reports that languish on dusty shelves because the data rarely yield actionable plans. Many companies accumulate such a quantity of research and data that quality is inevitably elusive, each study providing a limited, tactical perspective on the consumer, with little integration of synthesis.” (see page 6)

5. Answering the “So What?” Question. While 73% of MR staff said they consistently answer the question “so what?” about the data they provide, only 34% of the business staff thought they closed the loop and answered this question. (see page 14)

6. Tactical, Not Strategic. Unfortunately, 59% of market researchers agree with the statement “we spend the majority of consumer insight time and effort on decisions with near-term impact.” This means that MR departments are completing numerous small studies and not given the time to explore the bigger picture. This also creates a low status cul-de-sac for MR departments as it is difficult to have solid strategic input when tactical, short term studies are the focus. (see #3 above)

7. The Rise of Polymaths. Interestingly, the report suggests that a desired “strategic foresight organization” (the final, 4th phase of an MR department’s evolution) will employ a more diverse range of researchers from statistics, anthropology, sociology, marketing etc.

In its entirety the BCG report paints a fairly stark picture of the current situation. It is true that market research needs to evolve, but corporate cultures will need to support this evolution as well.

1. “How long can a healthy industry operate on low margin with insufficient resources? The strain is already apparent as many shops have closed their doors since 2008.”

2. “What should be done to support a perception that research is a valuable resource that demands great expertise and experience and that investing in quality is smart business?”

Let’s take each question in sequence.

First, market research could, conceivably, operate on low margin and in a relatively cash starved environment for a long time, but it wouldn’t be much of a “healthy” business and the situation would only harm the industry’s image. After all, limited money for insights means limited brainpower and limited quality. In my view, this will force a rapid evolution in the industry (along with some extinction) that will redefine what we do and who does it. Already there are many new entrants that could be classified under “market research”, but don’t use the name. I expect this trend to continue. After all, the trend toward data-driven (or fact based) decisionmaking is strong and will only become stronger with time (see Ian Ayres’ SuperCrunchers).

But what should be done?

First, I believe that the entire industry needs to reposition itself away from the image of “masters of data collection methodologies” (even though this is a terribly important core competency) and towards a space that is closer to fact-based consulting, data-driven strategy, etc. It needs to embrace the fact that the industry itself is rapidly evolving and that this can be a very good thing. The deliverables that the industry generates need to become much sharper and more easily socialized with the client. And the market research community needs to do a much better job of touting its successes. This is always difficult because of confidentiality and for competitive reasons (ironically it is our best work that we can’t talk about), but where it can highlighted, it should be. Finally, as researchers we all need to play in a larger strategic sandbox. Everyone knows that it is much easier to simply execute on the study and deliver the report than engage strategically in an extended discussion. Often, the economics of the situation do not support this level of engagement, but we must try.

Although the reaction to this change is NOT generally binary, it is worth reviewing the positive and negative reactions to the changes swirling around the industry.

The Concerned:
Some are frustrated and concerned about all the change that has been happening. They think that our technical ability to collect and crunch data has far surpassed our ability to pull insights from this ever growing data tide. They feel that the quickening pace of business decision making is demanding research turnaround times that cannot possibly deliver quality data, insights and strategic recommendations. They are disoriented by the rise of digital social networks and the decline of traditional advertising vehicles which challenges the control and assumptions of the traditionally vertical stimulus-response paradigm with a horizontal word of mouth or peer to peer paradigm. They are worried about the heightened privacy ethos of consumers and lower research participation rates. In tandem with this, they are concerned about the migration of consumers from landlines to mobile phones and the twilight of the traditional RDD phone survey. As much as they might like online research for its speed, lower expense and ease, they are frustrated with quality concerns ranging from panel quality to so called “speeder” or “driver” respondents who race through the survey instrument. And, they are surprised to find new people trying to play in their sandbox (uninvited!). These new entrants are bringing wonderful, but often disruptive, new technologies (remarkably simple web-based survey platforms, hosted online communities, online dial testing, eye tacking, online collaging tools, etc.), new tools (net promoter score), and new skills (management consulting). Add to this the economic anxiety from the 2008 economic meltdown and you have a toxic stew of stress, fear and worry.

The Optimistic:
On the other hand, some are more excited now than they have ever been about this business. At a macro level these individuals are excited by the trend toward data driven strategy best explained in Ian Ayres’ book “Super Crunchers.” They’ve complained for years about the flaws in emotional or intuitional decision making and are excited by the dawn of a new era in data based decision making. In addition, the technological explosion since the mid 1990’s has given many industries, but especially the market research industry, an amazing new array of research options. Powerful new text analytics and hosted online communities are giving us passive “listening posts” that provide unprompted insights. Besides delivering niche audiences that were at one time too expensive to be reached, online research is now delivering wonderful new simulated shelf test options, rapid cover testing for magazines, dial testing for speeches, commercials or debates and doing these things faster and cheaper than the previous alternatives. As one final example, eye tracking hardware is providing a level of behavioral insight heretofore unimagined. And it’s not all just high tech toys that send the pulse pounding. Old methodologies are getting new looks. Ethnographies certainly seem to be making a comeback, as do the kind of lengthy in-depth interviews needed for some of the newest collaging exercises. I call this trend “deep qual.” And finally, there are the advances in the field of behavioral economics and biometric research techniques (electroencephalographic measurement of brain waves, fMRI, galvanic skin response, heart rate, facial response, and pupil dilation) which call into question the traditional idea of the purely rational man and detail how emotional mechanisms in the brain bend decision making.

I place myself in the optimistic camp.

The industry has plenty of challenges, but there will always be a need to hear the voice of the customer, test the viability of new products and build communications campaigns based on solid data.

It is entirely possible that market research as we currently know it (the market structure, the name, etc.) will morph into something very different within the next five years. But, what the possible, probable and perferred futures look like is still fairly hazy.

Page 25 is the key page.

Here are the top 2 box responses (“a little problematic” and “a major problem”):

86% price or budget issues from current economy
73% research treated as a commodity
70% client demands for shorter timelines
68% surveys that are too long (and presumably reduce the pool of potential respondents)
63% non-research managers doing their own surveys (DIY)
53% “professional respondents”
45% Reduction in demand due to belief that data can be found online (free)
44% Procurement departments treated researh as a hard good
43% Difficulty in acquiring needed survey sample
42% Price pressure from offshore operators
40% Difficulty finding qualified staff
31% Demands for more visually appealing reports
27% Less interest in consulting, more interest in raw data (commodity)
23% More time needed to train employees
21% Research reports with a greater number of errors

The economic challenges (86%) are not a surprise, given the financial meltdown of 2008, and many of these are challenges that most professionals in this industry are discussing.

What is instructive is their ordering.

The fear of commoditzation clearly rises to the top (73%), and ties in with procurement departments treating research as a hard good (44%), offshore price pressure (42%) and less demand for consulting services (27%).

Of course, DIY (“non-research managers doing their own surveys on the internet” and “reduction in demand for primary research because non-research managers learn what they need from the web.”) is a clear reflection of a feeling (among some) that research is more of a commodity, than a business consulting service.

Speed is also a critical issue. Customers are clearly demanding faster delivery and shorter timelines (70%). This is related closely to something we’ve been discussing here at future of insight, which is globally distributed research teams that work the global (24-7) clock.