Will client insight functions survive the recession?

In the heady days of late summer last year, before the world as we knew it collapsed, I was very happy to give my opinion that client side 'insight' functions were here to stay.

These new 'insight' functions had steadily been established in client companies since the late 1990s for the same reason that account planning grew up 30 years ago in advertising agencies – management was fed up with the old-fashioned market research departments adding impenetrable data to the process rather than any useful implications that would drive the business.

So in the 1970s, the old advertising agency quantitative researchers were replaced by more qualitative thinkers whose role was to to inspire the creative teams and nurture the creative work forward. This role was adding value to the agency business of producing ads and so caught on rapidly.

On the client side, things were much slower to change. In advertising agencies the solution was relatively simple: replace the old left-brain number crunchers with right-brain creative thinkers ('planners') But on the client side, a more difficult to find 'hybrid' thinker was needed. Client 'insight planners' need to use not only quantitative skills to derive market positioning, set brand objectives and measure performance, but then need to switch to a more qualitative mode to uncover deep-seated consumer insights and the implications for marketing and brand communication.

But now, as the economic downturn forces companies to revise their structures to minimise costs, what is the future of client 'insight' functions? Will they be seen as an unnecessary indulgence or will they be able to weather the storm of the bad times?

The first major recession to hit the new account planning departments in advertising came in the late 1980s, by which time the function was well established. The number of account planners dropped from 676 in 1989, the year the recession hit, to 483 in 1993 – a severe cut-back in numbers, but not annihilation.

What probably saved the agency planners was that they had very quickly managed to create a common understanding of what the function delivered to agencies and had created a trade body – the Account Planning Group – to nurture the function. Furthermore, planners were seen as the primary authors of the IPA

Effectiveness Awards (introduced in 1980), which allowed agencies to demonstrate that they were not only 'creative' but also instrumental in sales growth.

The situation at the present time for the client 'insight' functions is somewhat different. The function does not have cohesion: clients have insight functions that vary on a spectrum from traditional research departments who have simply rebranded themselves to, at the other end of the spectrum, those who have genuinely changed their role and recruited different sorts of people. Diageo believes that it has genuinely transformed the function.

DIAGEO PLAYS FOOTBALL

I use a simple football analogy to describe the journey we have been on from the traditional research function to a more modern consumer planning function. If Diageo were a football team, the strikers, the ones who score the goals, would be the sales and marketing people. The traditional researcher is a bit like the goalkeeper – a valuable role but fundamentally a reactive one that waits for the game to come to it and is not part of the process of winning. What we've done is to move the function from being goalkeeper to a midfield player, constantly passing the right balls (understanding and insight) to allow the strikers to score.

We define the role of consumer planning in Diageo as 'ensuring insights inspire big ideas that drive growth' – not merely conducting 'world class research studies' or mining the data to uncover important insights. Diageo is a very commercially oriented operation and it was apparent that we needed to ensure our insights were connected to commercial success, that our insights inspired big creative marketing ideas and that these were clearly correlated with growing the brand – a much bigger and more strategically important role.

So will 'insight' functions survive the economic downturn or will companies take this opportunity to put the function back in the 'back room' from where it came and revert to oldfashioned research departments?

Although some short-sighted companies will take the opportunity to 'slash & burn' anything, they can to save money including cutting the 'insight' department as a 'luxury', the more farsighted ones, and the ones that will exit the recession being stronger than when they went in, are those that realise that consumer insights are even more important in an economic downturn. Far from being an expensive luxury, the 'insight' department is one of the key ways to ensure that the company thrives in these challenging times. The simple truth is that consumers' behaviour and attitudes are changing fast and companies need to be on top of that,

However, this does demand that the 'insight' function adapts to the new environment. And this means maintaining the focus on consumer understanding and key insights but working to a shorter timescale.

FAST KNOWLEDGE

To deliver this, Diageo's marketing leaders tasked consumer planning to take the lead in a new 'fast knowledge' programme for the business defined as, 'the rapid understanding of what's going on with our consumers in our industry during the economic downturn and the rapid connection of that understanding to our strategy and activities'.

This has demanded that we rethink our ways of working. In the current economic downturn, we simply don't have time for the kind of research we would normally conduct: things are moving too fast. So, instead, our consumer planners around the world are dialling up their usage of the following:

• observing consumer behaviour in the on and off trade
• relying on judgement far more as opposed to waiting for research confirmation
• asking questions at the end of scheduled focus groups
• going into the trade with Sales to interview our retailers (on and off trade)
• tapping into the collective knowledge of our agency planners
• trawling the internet and other published sources for 'fast knowledge'.

I'm sure our competitors are not slow in accessing the wealth of published reports on how consumers are responding to the economic downturn – there have been at least 50 different reports produced by various organistions. However, we feel that very few of those gave any sense of the practical, on the ground implications for our particular business So we've really encouraged our consumer planners to use every opportunity possible to identify actionable implications that can be implemented quickly.

SOME EXAMPLES OF 'FAST KNOWLEDGE'

An example of this in action is an initiative by our consumer planners in the USA. They created a 'consumer planning challenge' (with a prize) where the function in the USA was divided into four competing teams. Each team was given an issue and required to head out into the on trade and take a look at what accounts or brands were doing to compete effectively in the current environment and come back with ideas that could be used quickly. Each team was given a budget of only $200 and encouraged to also use its networks, connections and existing data sources to complete the assignment. It produced fast, insightful and actionable results.

In Great Britain, we have another example. 'Pub of the Month' gets consumer planners and category development managers out into the on trade to get real-time information, insights and implications. The focus is on pubs that are performing well in the economic downturn to understand why and how we can capitalise on these insights. These visits allow one-to-one conversations with pub managers, which are always interesting and insightful as well as providing an opportunity to see competitor activity and execution. Again, the key with this initiative is to ensure we generate actionable implications that can be implemented quickly.

So my advice to any company with an 'insight' function wondering whether it has invested in an indulgent luxury which should be culled is to ask this simple question: was the 'insight' function really having an impact on the quality of the marketing ideas during the good times? If it was, then you need those people more than ever now in the bad times.

If, on the other hand, you invested in changing the name and logo of the old research function into 'insights' but, hand on heart, did not see any real change in your brand's marketing programmes (any 'big ideas') or any growth attributable to consumer insight, then send them back to the back room and throw away the key – they were of no value to you in the good times and certainly have nothing to offer in the bad times!

Michael Harvey is Global Consumer Planning Director Diageo Plc

[email protected]