Kathy Joe
Matthias Hartmann, newly appointed CEO of GfK. Talks to Research World editor Kathy Joe on transforming the market research and information sector.
Tell us about your background at IBM Services and what it was that attracted you to join GfK?
I worked at IBM for more than 25 years, most recently as global head of strategy and industries for IBM’s consulting business. Over the years, I held various positions in the services business of IBM in Frankfurt, Dublin, Brussels and the USA.
Market research always fascinated me, because it utilises technology at its best to provide consultancy services. Market research needs to cope with massive amounts of data. There is a real explosion of data volume ahead of us. But pure data is of no value to clients; from it market research derives answers and generates real insights. The opportunity to lead a strong, successful company into a new future really appealed to me. With a new strategy focusing on the needs of a digital world and an almost unparalleled global reach, I felt that GfK was a perfect fit for doing what I love and applying my skills and experiences.
What are the three biggest changes that you see impacting the market research sector?
Globalisation, digitalisation and increased consumer diversity. Let me address these with some background.
Globalisation: Today’s world is an interconnected global marketplace. Our clients have the opportunity to reach consumers with their brands worldwide. This brings enormous potential, but at the same time it is a huge challenge. More than ever, our clients are required to think globally and act locally. As market researchers, we also need to operate both locally and on a global scale. We must deliver integrated and harmonised data and services, offer global expertise, but utilise local knowledge and add local value.
Digitalisation: Digitalisation, especially the internet, changed the world we live in dramatically. It changed the way we work, communicate, shop and organise our daily lives. As market researchers, we need to cover all these new communication and sales channels. Digitalisation generates massive amounts of data for us and I believe we are just at the beginning of this data explosion. While having so much data is a huge benefit, it challenges us to extract relevant and actionable insights for our clients. I also believe that we in market research can be the ‘trusted source’ for both consumers and our clients as we can truly demonstrate that we handle the growing concerns on data privacy with full integrity.
Increased consumer diversity: It is becoming more and more complex for our clients to reach their target groups in terms of advertising and sales channels. Market research needs to offer tools and services which are able to draw a holistic picture of the consumer, despite the vast number of new channels and their interdependencies. This means that, more than ever, we need to combine data from various sources. For example, GfK does a lot of research in the area of mobile data and we will integrate across the various channels that our clients need. Social media is another example.
How will GfK be responding to these changes?
In response to these trends, GfK has introduced a new business strategy. We call it ‘Own the Future’ because this is what it is all about: the future, our clients as well as ours. We are responding to the global, digital age and the trends I described but we want to go beyond this. Our goal is to be able to offer the services our clients need to make their businesses ready and fit for the future and actually shape it too. To achieve this we are concentrating our energy on one clear target: the consumer.
In concrete terms, this means we are creating a more consumer-driven organisation. We have structured our services into two new sectors. The Consumer Choices sector focuses on market sizing, media currency and converging media and sales channels. So it involves detailed, accurate and timely data on media and the product choices of consumers. Our second new sector is Consumer Experiences, which is exploring consumers’ attitudes through highly creative, robust and flexible methods. The name Consumer Experiences refers to consumers’ perceptions of the world and the way they experience it.
To make these aims actionable, we are reviewing our entire product portfolio to ultimately create one global suite with unique, global, harmonised products. We will meet the growth needs of our global clients by strengthening our presence in the important growth regions of Asia and Latin America.
We are also investing heavily in the digital space, as demonstrated by our recent acquisition of Knowledge Networks in the US. And, of course, we invest in new service offerings, especially for the mobile internet, eg, with our exciting initiative GfK NIS (Network Intelligence Solution).
Last but not least, we are redefining the way we work together to ensure a more integrated, harmonised service for our clients. Under the “One GfK” roof we want to ensure that our clients will recognise “GfK DNA” wherever they work with us.
Commentators have said that asking consumers questions cannot accurately predict their preferences or behavior? Do you agree?
It might be true that in some cases asking questions is not the best, or only, way to predict preferences and behavior, but fortunately market research is so much more than questionnaires. It is our core competence to consult our clients on the best way to get answers and solutions for their business needs. We have a whole range of both passive and active methods in place, including ethnography, observation, focus groups and psychological interviews. We track what people buy, which media they consume, what advertising they are exposed to and what they do on the internet. And we have a wide set of statistical methods to predict behavior. Of course we are constantly working on new ways to understand the consumer and also introduce innovative tools like facial coding, a system that automatically explores the sentiment of a person.
In a recent survey of corporate researchers, 20% said that they expected either Google or Facebook to be the leading research company by 2020. Would you agree?
Companies like Google and Facebook might have a wealth of data, but they are not able to draw a complete picture of the consumer. Market research is much more than simply data. It’s about understanding how to put together a representative and projectionable view of the consumer so that clients understand not only the “what?” but the “what now?”.
Among our core competencies is consulting our clients in market research issues and delivering actionable insights. I don’t believe that Google or Facebook aim to tap into this field. Another principal competency is data fusion, the combination of internet usage data with on- and offline purchase data, which we collect via our household and retail panels. But of course there might be areas where we will face increasing competition from new providers and free-of-charge data. Here it is our job to prove that market research guarantees high qualitative information and a holistic picture of the consumer. By the way, Google is a major client and we work together on very interesting projects, helping Google to understand their customers and the potential of their search-based advertising. With regard to social media platforms like Facebook, I definitely agree that they offer a very interesting environment for certain types of market research projects with great potential for high involvement of the participants.
Many companies are struggling to incorporate social media and other data into their customer knowledge. What role do you think market research should play in helping companies to incorporate such information?
The “online buzz” coming from social media platforms, blogs and rating portals has the potential to provide marketers with very valuable information. What do people think about a brand? Do they complain about it or recommend it? Are there ideas for optimizing a product?
You need intelligent solutions to extract the relevant information for a client and you need to bring this information into context. Not every negative comment about a brand has a real impact, but if it goes viral, spread by opinion leaders, it can have profound consequences. And there is still a world outside the web, so for many products it is essential to bring results into a broader, representative context. Market researcher companies can play both a role in improving the gathering and analysis of this data as well as adopting a consulting role, especially when it comes to judging relevance and fusing data with other information. We should aim to deliver actionable insights, for brand communications and new product developments and more.
Do you expect a faster take-up of mobile research in the next few years?
Mobile technologies are definitely among the most exciting topics for market research. The mobile internet has huge potential in terms of innovative research methods and new demand from the client side. Smartphones integrate ever more functions into our daily lives, such as communication, information, entertainment, and they will potentially be our wallets and passports in the future. The number of people using them will rise tremendously within the next few years, so I am convinced that mobile research will also take up fast.
From a market research perspective, smartphones are a perfect tool for context-related research and, with the help of GPS data, we can develop completely new service offerings. There is of course huge demand for information on the usage of the mobile internet itself from clients in the media, advertising and telecoms sphere. This includes which pages people visit from their mobile phone, what ads they see and what products they buy on the move. And demand will increase further from the mobile marketing and location-based services that our clients will use in the near future.
Some say that asking consumers questions cannot accurately predict their preferences? Do you agree?
Despite my enthusiasm for all the exciting things we can do online, mobile and in the social media context, there is still room and a need for classic face-to-face and questionnaire interviews as we have yet to develop passive ways of reading people minds and understanding why they do what they do!
And while we are definitely facing participation challenges in developed countries, they are still very viable in the growth regions and these countries are becoming more and more attractive sales markets for our clients. In the more saturated markets the use of face-to-face interviews is declining and it is becoming more of a challenge to win participants for our surveys. We have to be creative and think of new ways to make participating in market research projects easier (mobile research may provide fresh air here) enjoyable and entertaining.
It is often said that large, global companies are slower to innovate than smaller ones and that they can better do so by acquiring innovative companies. Would you agree?
Innovation is less a matter of company size, and more a question of company culture. You have to live innovation in a company; it must be part of the company values. This is not a top-down process, every employee must feel that progress and trying out new things is part of their job. And you have to install channels and mechanisms to develop ideas for realizing innovations. At GfK, we have established Future Teams to accomplish exactly this and each of our sectors has a dedicated Global Head of Innovation and Digital. It is also important to give small ideas space and time to grow. Smaller companies are more targeted and very specialised, so they can develop good products and ideas for specific solutions. Acquiring such companies or partnering with them can of course help both sides to make a very good idea successful on a large scale.
With the continuing concentration of the global market research companies taking a larger proportion of market research spend, how do you see the landscape in say five years?
Consolidation in our industry will continue, as the demand for integrated and global information from our client side is rising. There will be room for smaller companies as well, offering specialised services or serving niche markets. But in light of the digital revolution, the demand for large investments in new product offerings and tools will foster the concentration process. It is hard to predict the landscape of our industry in five years time, but one thing I know is that we at GfK are actively responding to the constant worldwide changes and this will enable us to play a key role in the global market research landscape.
What do you see as the most beneficial role for associations to play with the market research industry?
Market research depends in large part on the willingness of people to participate in our surveys. Therefore it is vital that consumers have trust in our profession and our high ethical and professional standards. Associations like ESOMAR are essential for promoting and securing these standards. In addition, they play a central role in fostering our image to the general public and securing our interests concerning legislation. And associations of course provide a variety of platforms for dialogue and knowledge transfer within our industry. They will play an important role in the upcoming battle for talent, where we have to compete against other industries to attract top-level candidates for market research and to help us develop this young talent.
When your time with GfK comes to an end, what is the single most important accomplishment you would like to be remembered for?
Forming a globally integrated GfK with a market research portfolio that has truly made a difference for the future business of our clients.
Matthias Hartmann is the CEO of GFK
