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| Fees on results for mkt research |
| Viveat Susan Pinto / Mumbai Oct 06, 2010, 00:21 IST |
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Coca-Cola wants to try it; experts say devil in detail.
Recent calls for aligning market research to a performance-linked model may not be easy to implement, say advertising industry experts.
The practice is common on the creative and media sides of the Rs 23,000-crore Indian advertising industry. Yet, market research, an important component of the business, has been largely kept out of this, due to the inability of advertisers to guage what is effective.
“Research agencies, typically, are remunerated on a project basis in India,” says Praveen Tripathi, veteran researcher and media planner, who was earlier with ad agency RK Swamy/BBDO’s Hansa Consultancy. He currently runs his own consumer insight and knowledge firm in Mumbai.
“Agencies,” he says, “Work to a brief, providing the necessary qualitative or quantitative inputs required.”
Coke wants change
But with the Atlanta-based The Coca-Cola Company mooting a pay-for-performance model for its research agencies, including Nielsen and Kantar, both WPP-group firms, research agencies in India, say industry experts, may be compelled to take a hard look at this model, as advertisers increasingly push for accountability in research.
“The ball has been set rolling,” says A Mahendran, managing director, Godrej Consumer Products Ltd. “We moved to a performance-linked model on the creative and media sides about a year ago. Why should research be kept out of this? It is a good model to have.”
Coca-Cola India, in a written statement, has said the firm will begin discussions with Nielsen and Kantar on the pay-for-performance model in the near future. It did not specify a timeline, saying India will be among the first few countries where the model will be rolled out. The firm did, however, indicate that the metrics to measure performance were still in development.
Advertising agency heads say therein lies the challenge. "Market research cannot predict consumer behaviour. It can, at best, predict possible behaviour based on the field work a market research firm does. So, measuring effectiveness can be tricky," says M G Parmeswaran, executiive director & chief executive officer, Mumbai, Draftfcb Ulka Advertising.
This is corroborated by a senior executive at market research firm IMRB, part of WPP's Kantar Group. "Accountability and return on investment is a reality on the media buying side of the business. Nobody denies that. Even the creative process is evaluated from time to time to guage how effective a campaign has been. But how do you assess research?” he asks.
Incentives
Typically, media and creative agencies are given a yearly or annual bonus, if an advertising or media campaign has contributed to an increase in sales for the advertiser's brands, says Tripathi. Companies, he says, use various ways to measure effectiveness, both before and after a campaign or product launch.
“If researchers are made stakeholders in the process by telling them that they, too, will be incentivised if their suggestions or ideas or fieldwork result in a tangible benefit for the brand, then maybe the performance-linked model can work,” he says.
Correction:
Nielsen is a part of the VNU group, and not as stated in the article. The error is regretted.
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