Report by Eric Salama (below) Chairman and chief executive officer
In 2010 we held our annual management meeting in Boston. There were many good reasons for our location – not least that a number of our most entrepreneurial businesses are based there, employing a disproportionate number of sector gurus, PhDs and young ‘digerati’ – connected, future-focused, smart, creative, entrepreneurial – in sum, what we aspire to be across the whole of the Kantar world.
As a bonus we visited the JFK Presidential Library and were reminded of the power of storytelling. Fifty years on from JFK’s inauguration, the world is crowded by greater complexity and information than ever before. Political events in the Arab world, volcanic eruptions, floods and earthquakes and the explosion of data and views facilitated by companies such as Google, Facebook and Twitter make the need for interpretation, for painting pictures of our times and our futures, for stories which tell the truth of human attitudes and behaviour ever more important, but ever harder.
In uncertain times, our goal remains to use insights into people – as citizens, customers, consumers, influencers – to inspire our clients to make better decisions for the future. Our destinations are clear and it is against these destinations that we measure our progress in 2010.
A house of brands with deeply-connected experts and thought leaders
Clients want deep expertise; people want to work in environments in which what they do is central to the business. Uniquely amongst our competitive set we are structured in a way which facilitates that and in 2010 we began to see the value and impact of this expertise and thought leadership.
...our goal remains to use insights into people – as citizens, customers, consumers, influencers – to inspire our clients to make better decisions for the future
In an area such as retail and shopper, Giles Quick and Paul Murphy of Kantar Worldpanel have been educating clients that 80% of all incremental grocery sales for a brand come from new users and that changing usage occasions has a bigger impact on long-term sales than any promotions; and Bryan Gildenberg and colleagues from Kantar Retail have developed 5 shares – an innovative way of looking at what advertisers need to do to succeed by increasing share of growth, share of wallet, share of consumer decisions, share of solutions and share of engagement.
In operations, our teams from Kantar Operations and Lightspeed have responded superbly to the seriousness with which we take data quality by passing ISO standards and developing InTouch as a way of improving engagement in taking surveys, carrying out ethnographically-based usability studies on questionnaires and developing relationships across the industry with ‘competitors’ such as GfK and Market Tools to set industry standards. As James Sallows of Lightspeed said at a recent industry conference, “Your data is ultimately the victim of a survey that does not engage respondents.”
In understanding the way that the recession has changed consumer attitudes and behaviours, The Futures Company has worked with clients to incorporate those learnings into the way they position their products and services.
And across issues as diverse as the use of neuroscience in advertising testing, the role of social media in forecasting sales of new products, and the way in which segmentation can drive effective product development and engagement strategies – expert teams from across Millward Brown, TNS and Added Value have made much progress this year.
We had many pieces of work which had extensive press coverage, none more so than a groundbreaking global 46-country study of consumers’ digital behaviour by TNS; a study carried out by Millward Brown for WPP on the strongest brands in China; a study on ‘the new Muslim consumer’ conducted by TNS across a number of markets in conjunction with Ogilvy; and a study of teens in the Middle East carried out by IMRB.
And we were recognised for the quality of our work and thought leadership in numerous forums around the world with Millward Brown winning special recognition and a host of Ogilvy effectiveness awards from ARF, Kantar Worldpanel and TNS winning Agency of the Year in Mexico and India respectively, and TNS South Africa scooping all of the prizes for best papers in South Africa.
Connecting the insights
Above, left to right:
David Geiger, CEO, Center Partners, Sharon Potter, CEO, Kantar Operations, Josep Montserrat, CEO, Kantar Worldpanel, Thomas Puliyel, CEO/president, IMRB, Janine Hawkins, CEO, Added Value, David Day, CEO, Lightspeed Research
Central to our strategy going forward is the desire and ability to connect insights and data, not just collect them. We know that clients are frustrated with too much of their ‘data’ sitting in silos and we share that frustration. It is inefficient, costly and militates against an holistic understanding of the marketplace and of the link between cause and effect.
We are passionate about our desire to connect insights and are open to working with competitor, client and third-party data to maximise our impact. To do so successfully requires an attitude of mind, technology and an infrastructure which facilitates connecting and people with the appropriate skills. During 2010 we made notable progress in connecting, in each case adding value to clients. Our efforts have been concentrated in four areas:
- Connecting expertise – Under a program we dubbed ‘Catalyst’ we bring together smart, young experts from across our companies to tackle individual client questions, resolve brand issues, or develop growth strategies based around existing expertise and knowledge – all without collecting or commissioning any new research. It is an approach we have taken on numerous occasions in 2010, to great effect.
- Connecting tools which we are already providing to clients, e.g. incorporating TNS Needscope segmentation into Millward Brown Link copy testing so that clients who use both can get the benefits of their segmentation approach in the way they evaluate and develop advertising, or the Kantar Media MARS study which linked sufferers offline and online behaviour and segmented the population by disease and stage of condition.
- Connecting our data with our own, client or third-party data to help provide a more holistic and dynamic view of the marketplace. Good examples are overlaying our second-by-second TV audience behaviour with purchase data from JDPower; linking our attitudinal segmentation with MTS’s customer records to provide a more actionable brand strategy for Eastern Europe’s largest mobile telecoms provider; linking Dynamic Logic’s online advertising effectiveness data with social media insights from Cymfony; putting our Compete software onto Kantar Worldpanel in the UK, France, Spain and linking online and TV viewing data with frequent shopper card data in our Kantar Retail ShopComm practice so that clients can understand the impact which different types of media behaviour have on consumption, or the sales effectiveness of different ads; linking TGI media consumption with Worldpanel purchase data.
- Connecting digital content – 2010 saw us launching KTags as an industry-wide solution, allowing clients to tag all of their digital content and link it to our various databases so as to allow an understanding of who consumes what content and where.
Our ability to connect is unprecedented and the impact we can have on clients equally so.
Greater usability of our work, with insights used to drive better decisions
We all want our work to have impact, to be used by our clients to make better decisions. To achieve this consistently and as a matter of routine requires two things: developing genuine insights with a clear sense of the implications for clients and an ability to communicate those insights/implications in an inspiring way.
As 2010 developed we became increasingly focused on two factors, real-time insights and data visualisation
As 2010 developed we became increasingly focused on two factors, real-time insights and data visualisation:
- Real-time insights – We recognise that some data and insights are of value only if they are provided in real-time and that for some types of insights, being 80% correct now is more important than being 100% correct in six months' time. Clients who are launching new products or new marketing campaigns want to be able to adapt and correct them as they happen. So, with clients as diverse as BAT and Procter & Gamble, our cross-Kantar teams have developed ways of monitoring the impact of launches through analysis of social media, brand tracking data, purchase data and, crucially, of synthesising that analysis and providing it to the client and its agencies in a way which allows them to adapt its media and creative campaigns early enough to make a difference.
- Data visualisation – Our ability to inspire and communicate depends on the way we visualise our insights. Many insights come alive this way.
Across our group, we are making good progress in this regard. Millward Brown and Added Value have teamed up with outside creative agencies and with internal operational and IT teams to redesign the way in which key outputs will be delivered to clients; TNS’s Digital Life allows users to interact with the data in novel ways; Kantar Worldpanel and Kantar Media are delivering monthly data and video through iPad/iPhone applications. And just weeks ago we announced a three-year tie-up with David McCandless, the recognised guru of data visualisation, designed to bring in thinking from around the world and help us team up with an extended talent pool. Have a look at www.informationisbeautifulawards.com to see what we have in mind.
A reputation for innovation
A running theme through much of what has been discussed above is that of innovation. It is no coincidence. As the world speeds up, as the media world fragments and as the ability to capture human attitudes and behaviours becomes more complex we have to innovate at an increasing pace to be able to serve our clients’ needs and to retain their respect and our relevance.
The ways we are connecting data and insights, the investments we are making to innovate and roll out cross-media measurement techniques, the development of new tools such as Added Value’s Character Lab to understand brand character and Millward Brown Firefly to scale qualitative research and develop talent, the development by Center Partners of at-home agents to deal with customer relationships, the use of mobile phone text services to collect data in Africa, and the successful setting up of a fully electronic 40,000 person Kantar Worldpanel in China are all examples of our commitment to innovation.
We measure our success in innovating by directly asking our clients and quantifying our progress. But we can also measure progress by the company we keep. We are proud of all of our clients but when clients such as Ford and Levi Strauss work with Added Value around innovation issues; when Google and Microsoft have become large Kantar Media clients working to understand online behaviour and the impact it has on offline purchase; when Walmart works with Millward Brown on issues relating to store-level customer satisfaction, when PayPal and RIM work with TNS in understanding how to segment their customer groups; and when a host of leading retailers and manufacturers adopt Red Dot Square as their virtual reality shopping technology of choice, we know we are on the right track.
A culture which is more client- and talent-centric
Above, left to right:
Wayne Levings, CEO, Kantar Retail, Lynnette Cooke, CEO, Kantar Health, Masanori Miyajima, CEO, Kantar Japan, Eileen Campbell, CEO, Millward Brown, Jean-Michel Portier, CEO, Kantar Media, Will Galgey, CEO, The Futures Company, Pedro Ros, CEO, TNS
Our client and talent agendas are inseparable. We cannot succeed with as ambitious a client and business agenda as we have without having engaged, talented people. And it is in the area of talent that we have made some of our biggest progress during 2010.
Our infrastructure has improved. We are in the process of setting up and rolling out a web-based human resources information system which will enable us to track and develop compensation, talent interactions and needs and free up the time of our talent professionals. We have significantly upgraded the quality of our talent/HR professionals with new people coming in as chief talent officers at Kantar HQ, TNS, Added Value and Kantar Media as well as in senior regional roles in Millward Brown and elsewhere.
Most importantly, our management teams have reacted to the disappointing feedback we received from employees in 2009 and have focused on putting in place consistent and forward-looking HR practices and ways of stretching and developing our people. The result has been a significant improvement in employee satisfaction scores during 2010 across many of our businesses and markets and a base on which to build.
Passionate about diversity and our impact on society
We are part of the communities in which we work and live and our work is all about understanding their attitudes and behaviours. As such it is important that we have a talent pool which is representative of our communities and draws on the talent which is available. We have good representation across the business but we are not yet sufficiently diverse at the most senior levels and are determined to be so (e.g. the majority of our employees are women but only 30% of our top management are women).
More broadly we strive to have a positive impact on our society. Partly this comes through our charitable activity which has increased this year with the expansion of our centrally-coordinated UNICEF activity to cover projects in Bolivia, Malawi and Bangladesh and with local activity such as Millward Brown’s Habitat for Humanity program. Partly it comes through pro bono work that the likes of Added Value carried out for The MTN Foundation to help it develop a strategy for the introduction of a topical solution to reduce the risk of HIV infection.
But even more importantly it comes from the fact that we have a large stream of business where our clients are governments and NGOs and where the issues we are addressing are ones of societal change and behaviour. Through businesses such as TNS, IMRB and Kantar Worldpanel we have had an exceptional year carrying out high quality work such as the British Crime Survey and winning assignments such as the Out Of Employment Survey in Canada, the primary study of social behaviour in Germany, work for the Ministry of Human Resources in India on the reasons behind the number of out-of-school children and a world first for the French Government, tracking the carbon footprint of packaged goods purchased in France on a continuous basis.
Above-market growth, leading industry margins, more revenue from emerging markets, digital and syndicated work
Our results are laid out elsewhere in this report. We are pleased with the progress we made on margins and in integrating the TNS businesses with resulting efficiencies. Virtually all of our businesses made their budgets in 2010 and we captured the synergy efficiencies we had promised in 2008.
Some, notably Millward Brown, Center Partners, IMRB, Kantar Worldpanel and Kantar Japan, had strong market-share-gaining revenue growth whilst others had new business wins in 2010 that bode well for future years. In the case of Kantar Media, special mention must be made of the four-year EU news monitoring contract, the largest ever awarded in Europe, and of TV audience measurement wins in the United Arab Emirates, Turkey and Romania. Overall, we had too many places where our revenue growth was not what it should have been and we are not satisfied with our overall level of revenue growth, which was lower than that of some of our competitors.
The shape of our revenues changed in the way we wanted it to. Our specialist digital companies such as Dynamic Logic, Compete and Cymfony grew strongly and extended their reach into European and Asian markets. We had some regions such as Latin America which grew fast organically and consistently ahead of peers.
We made some good acquisitions such as Spring to enhance our digital measurement capabilities, and Nigeria-based RMS with a footprint across Africa, which has been integrated into TNS. Millward Brown opened in Peru, Ghana and Vietnam and The Futures Company set up in Latin America.
We extended our syndicated studies in areas such as oncology, health outcomes, media intelligence and futures, into many more markets in Asia and Latin America. To that end we also laid the groundwork for extending our key platforms – media, purchase, digital, internet access – into key markets around the world so that clients will be able to benefit from Kantar Media Compete and Kantar Media Cymfony services in the UK and France, and from Kantar Worldpanel insights in Indonesia in 2011.
As Boston’s most famous son said, “Change is the law of life.” I’m proud of the way Kantar people have adapted to enormous change and are shaping our future. Two years on from the transformational acquisition of TNS we have a clear sense of ambition. We have a framework against which to judge our progress – in creating a more client- and talent-centric culture, in connecting our insights and our expertise and in outperforming our competitors in financial terms.
[As a result of our work] we see media plans and creative executions changed, products and services created, developed or repositioned, retail layouts and pricing plans modified in-store, government campaigns to change behaviours, employee and customer engagement programs which address issues we have identified
Unlike other parts of the marketing services industry, our work is rarely made public and it is hard to publicly demonstrate the impact we are having. But privately, we see the growing number of media plans and creative executions which have been changed as a result of our work, of products and services which have been created, developed or repositioned, of retail layouts assortments and pricing plans which have been modified in-store, of government campaigns which seek to change certain behaviours, of employee and customer engagement programs which address issues we have identified. The list is long.
Our success will be in continuing to change but above all, in explaining to our clients the opportunities that change brings for them and helping them benefit from it. Last year I described myself as “pleased but not satisfied” with our progress. This year I am even more pleased and even less satisfied.