Research World November/December

David Murphy talks to Synovate CEO, Robert Philpott

After an extremely tough couple of years Synovate returned to profit in the first half of 2010. Helping to boost parent company Aegis’ operating profit by 19.6% to UK £61.1m (€73.3m). Synovate CEO Robert Philpott says that after the recent turbulent times the industry has endured he is feeling increasingly confident that a corner has been turned, with growth evident in a whole range of markets.

“It’s not quite as ‘spotty’ as it was six months ago,” he says. “We are starting to see some consistency in the way clients are commissioning work again. Some projects that were mothballed for a while are beginning to see the light of day. I’m still cautious, scared somewhat by what happened over the last couple of years, but I have got more of a smile on my face.”

Philpott says that, geographically he is seeing growth from the usual suspects, such as Russia, Brazil and China, but he has also been impressed by the strength of the bounce back in North America, which he attributes partly to the natural American optimism and ‘can-do’ attitude. In China, meanwhile, Philpott says he has seen a significant change of focus: “Traditionally, the focus in China has been on helping international companies to penetrate the Chinese market, so it’s been about offering insight into the 1.3 – 1.4bn people who live there. But now when you talk to significant Chinese companies, they want to know how we can take their brand to the rest of the world. That’s a big change; it requires the teams in China to have an outward-looking view of the world, and not just be happy with a detailed knowledge of their own domestic market.”

According to Philpott, this trend applies across many sectors, from automotive to the brewing industry.  Of course, after the recent economic traumas, any kind of growth is to be welcomed. Synovate’s attitude to growth has been influenced by the difficulties of the past couple of years, Philpott says, “We are now firmly focused on managed growth. This means that when we look at a market and at how we are going to grow, we take a more considered approach. So even in a place like China, where we see continued double digit growth, it’s about making sure we have an eye on the return on investment, that we invest in infrastructure and talent to make sure that we are better cushioned against any other ups and downs in the market.”

Loss of talent
The issue of talent is clearly one that’s close to Philpott’s heart. He says that for him, one of the biggest tragedies of the downturn in commercial terms was not so much the loss of revenue, but the loss of talent: “The industry has lost a significant amount of talent over last 18 months; people who, through no fault of their own, became victims of the economic downturn, and the impact of that will be felt for some time to come.”

He adds that in faster-growing markets, such as Brazil, India and China, the effects are already being felt, as Synovate and its peers face up to the challenge of finding good researchers who understand the local market and culture.

In fact, says Philpott, the need for local talent has never been greater, as clients are increasingly looking for research partners who can provide a global solution.

“Big clients are trying desperately to leverage the strength of their research buy, and looking to research organisations to help them implement methodologies or systems on a global basis,” he says. “They want an ongoing relationship, rather than working with someone on a project-by-project basis, and to be honest, that’s the way we like to work too.”

With this in mind, Synovate looks to create teams that are dedicated to just one client. “It’s interesting,” says Philpott, “that during 2009, while the rest of the industry was suffering, our key accounts were either continuing to grow, or declining much less significantly.”

New platforms
While the last few years have seen a rapid rise of new research methodologies that harness the power of modern technology, such as online and more recently, mobile research, Philpott is not about to get carried away with any of it.

“I think we are past the stage where what are essentially new platforms for data collection are considered as things that will revolutionise the industry,” he says. “The question I ask myself is whether, if I had fallen asleep in 2000 and woke up today, I could still do the job? My feeling is that I probably could. We might be surprised at some of the places where we are collecting data, but the basics have not changed. Online, mobile, social media, are all interesting platforms for gathering information, but not something that has fundamentally changed the industry.

He says he’s pleased to see the focus of online research moving back to quality issues.

“There are some significant initiatives being promoted by several large manufacturers to make sure that alongside speed and the other advantages online research offers, we do not lose sight of the basic requirement for quality and I applaud these efforts.”

In the mobile space, Philpott believes the pace of adoption will be largely driven by consumer uptake of Smartphone’s and other connected devices, not just in mature territories, but in emerging markets too. He says: “On continents like Africa, we are seeing a tremendous number of handsets from brands we don’t recognise, the majority from Asian markets, particularly China.  These are fully tricked-out phones with big colour screens and lots of features. They could present an opportunity to bypass lots of conventional methods and go straight to mobile in these countries.”

Cautious optimism
Looking to the future, Philpott says he has learned his lesson about making forecasts. But he admits to some cautious optimism. “I’m more confident both about the economy as a whole, and the market research industry in particular for 2011,” he says. “The ESOMAR report released in September suggesting a market growth figure for 2010 of roughly at 3 percent looks solid, possibly even a little on the safe side. I have heard some of my senior colleagues in this industry from larger agencies in France and Germany being rather more bullish than that, so I am feeling quite positive about 2011.”

Nevertheless, a CEO would not be a CEO if there were not a few big changes he would like to see in his industry, and Philpott is no exception. We asked him for three. The first, not surprisingly, concerns talent: “I would like to see a real commitment to finding and developing talent in our industry,” he says. “I saw a report recently about graduates applying for jobs in call centres. If I was running a call centre, I’d be delighted. But when I look at our own business, and the market research industry as a whole, I am dismayed at the level of investment in talent.

“It gives me great pleasure when I see people who came in to the business as graduates taking senior management positions. Yet when I look at our graduate intake programmes, I feel we are slow to upgrade and modernise them. We have to demonstrate far greater pride in what we do, and this will only come when we, who work in the industry, begin to really value the work we do.” Philpott adds that Synovate is actively looking to recruit more opinionated, self-assured characters to its graduate scheme. “We are on a crusade to find people who provoke and challenge traditional ways of thinking,” he says.

Philpott’s second issue is with some of the language used in the market research business. He says: “The use of the word ‘insight’ should be licensed only to those who know what it means and who can prove they can deliver. It is so widely used as a term that the whole concept has become devalued in the eyes of the client.”

‘Consultant’ is another term that irks Philpott, especially when used by someone who does not have the necessary experience and expertise to truly consult to a company.

Philpott’s final beef with the modern-day market research business seems a strange one at first glance.  “At times, I would say we employ too many researchers, particularly at a senior level,” he says. Instead of all these highly-qualified research specialists, Philpott would prefer to see more business leaders.

“We get this a lot from clients when they are challenging us to deliver value,” he says. “This doesn’t mean coming up with increasingly complex or new methodologies. What they want is someone who understands how business in general, and their business in particular, operates, who can take away the information that the research delivers and set it in a business context for them. That’s what we need to deliver as an industry.”

Roger Philpott is CEO of Synovate