40 — A Year In Review

Lenny: 00:00:10

Hello, everybody, and welcome to the _GreenBook Podcast_. This is a special edition. It has been one year since we launched this adventure. And what a year it’s been watching this grow, watching our audience engage with us, our sponsors, and all of our partners. It’s just been fantastic. So, before we even dive into this special edition, I want to give a shout-out to our internal team, to our producer, Natalie, to our audio tech, James—and editor—to our sponsors, and most of all, to all of our listeners. Without you, we wouldn’t be doing this.

Simon: 00:02:27

Well, thank you, Lenny. And I’m very flattered and honored that you should think of me in that way. The bus is not as bad as you might think. So, I am the managing partner and co-founder of a company called Cambiar Consulting, which is a change management consulting company that is totally focused on the insights industry and everything within that. So agencies, clients, ResTech, you name it, we’re involved.

Lenny: 00:04:05

Thank you, but you were being too modest. So, you’ve also been influential within trade organizations, within [SMR 00:04:11], within the Insights Association, CASRO back in the day. You were the editor of _Research World_, I believe for—

Simon: 00:05:48

Well, I think, as you’ve heard me say before, Lenny, clearly technology is an enabler of change, but I don’t see it as the driver of change. We’ve had immense enablement of things that we’ve always wanted to do. I always look to what client needs are and how they’re evolving and the place of insights and analytics within corporations or government or wherever it may be. And those client needs have been changing, and I’m not just talking about the insights functions, but corporate needs as a whole. And we’ve seen this in the raw during the pandemic.

Lenny: 00:09:12

I could not agree more. It’s a wonderful summary. So, we put on our own foresight hat, right, so what does that look like as we move forward? And I think one interesting component of that, and recently, it’s come up an awful lot in different conversations with the technology, the quote-unquote ResTech sector on, “Well, what’s going to happen in a recession?” And my take has been that we certainly will see budget pressures applied on the client side, but that should be good for those technology-enabled or even technology-driven companies because the assumption is that technology will drive efficiencies from a cost and speed standpoint, so there should be a long tail there.

Simon: 00:11:18

Well, I think that’s very true. And I think one very interesting statistic would tend to back up what we're both saying, which was that from 2020 to 2021, according to the ARF, insourcing of projects grew from 37% of all projects in a given year to 49% in one year. It’s probably over 50%, by 2022. And a lot of that is, A, in response to greater demand but not hugely increased budgets, the need for speed in many, many circumstances, and as you say, the arrival of technologies that are doing things that enable us either to have an always-on grip of what’s happening in the markets or indeed in the political ecosystem, or whatever or to get to that [unintelligible 00:12:16]. So, where we’re seeing a lot of investment right now is certainly in some of those, you know, implicit testing, neuro, all of that, but also in areas such as that are occupied by Morning Consult, for example, we’re seeing an enormous amount of investment in the risk management area, which involves massive amounts of data collection and data integration at humongous speed, to be able to feed in real-time to senior managements or corporations who are having to manage risk and prepare for it.

Lenny: 00:15:36

It does. And we watched that in 2020, via the _GRIT Report_. So, couldn’t agree more, and I use 2020 as a great example of that as well, that we saw that initial influx of insourcing, folks taking the—using technology to get cheap answers, fast answers, really quickly. But the more they insourced, the more they realized, “Wait, we can’t do all of this ourselves and we need external help.” And some of that could have been from a project standpoint, but often it was, “Gosh, we don’t have anybody on site that understands segmentation and we need to perform whole new segmentations.”

Simon: 00:19:05

Well, to the third, I think it is a fascinating development. I mean, obviously, we’ve had some of that in the past, you know, with Dunnhumby, 84.51°. Same idea, but obviously, when you come to something like Walmart or Amazon, you’re now talking in a totally different ballpark. I think Walmart claims to have 260 million customers in the US. Obviously, some of those are not as prolific as others, but nonetheless, they’re there.

Lenny: 00:22:02

Yeah. Again, could not agree more, and it’s interesting times. I mean, there are, from an M&A standpoint, now there’s active—I’m sure you’re aware of similar conversations where there are platform companies looking for that level where they’re looking for an exit, a few, and having conversations with Walmart, with Amazon. They’re now you know, potential acquisition targets, which was not necessarily the case a few years ago. Or 84.51° as well.

Simon: 00:22:50

Yeah, that’s a really good question. I don’t think there’s been anything that has been a massive surprise. You know, I think you’ve talked about the Walmarts and the Amazons. I saw that coming. I think the change in brand tracking, I think that’s, you know, been glaring at us for a couple of years, maybe three years now.

Lenny: 00:24:38

Oh, hence why you’re the guru of—

Simon: 00:24:49

Wow. I’ve got to write that down somewhere.

Lenny: 00:24:54

[laugh]. We’ll start calling you Mr. Chadwick-Buffet.

Simon: 00:25:15

Well, you know, it’s interesting. I think you and others have been expecting and talking about the rise of neuroscience in research. And, you know, I can remember how long ago was it that the ARF did a massive test of, you know, all these different forms of neuro—

Lenny: 00:25:38

2012. Twenty—

Simon: 00:25:41

Yeah. At least ten years. And it hasn’t happened. And you know, we work in the M&A arena; I think we’ve sold one neuro company in that time. We’re looking at things like implicit, yeah, that’s all good, but you know, that idea that we could read brains and understand what was happening and the why would come through all of that just hasn’t happened. And if you look at the investment side of the equation on that, it’s pretty much zero. At least [crosstalk 00:26:11]—

Lenny: 00:26:12

I’m going to push back on that. The last few months, there have been some significant investments in the—so I agree, the EEG-fMRI, they’re not scalable; it’s not there. But facial coding, implicit—even text analytics and voice analytics—but facial coding especially just in the past six months, we’ve seen some pretty significant investments occur in that arena. And those businesses, I know that they are growing fairly well.

Simon: 00:26:37

I think if you include that as a definition, yes, I would agree with you. I’m thinking about the EEG-fMRI, all of that sort of stuff. It was a huge, huge kerfuffle made about it for years and years and years. It just didn’t happen.

Lenny: 00:26:52

Yeah, well, all of had to do with Pradeep. He was a wonderful snake oil salesman. I shouldn’t say that. That’s not right. There’s a lot of technology that there is absolutely fantastic. It’s just not scalable. So, it was supplanted by other technologies.

Simon: 00:27:05

Now, do you think, Lenny—and sorry, I don’t mean to be the interviewer here—but facial coding in our industry, I think its reputation has slipped quite a lot over the last couple of years in terms of quality, and applicability. Do you think these new investments can turn that around?

Lenny: 00:27:32

I do. And like you, right, we work with a lot of brands. And there’s a large global pharmaceutical we’re working with right now that the Gen2 side of the equation that the—I mean, their focus is on applied behavioral science, and facial coding is at the very top of the list in terms of the technologies they can deploy to address their business need, their objectives. Now, I do think that—and it goes back to the ARF testing. You put ten of these companies together side by side, and all of them are going to claim to have a better metric for facial coding, and the reality is that they’re all about the same, right?

Simon: 00:29:41

Yeah. I agree. I actually sat through a demo of one of the later-stage visual coding platforms yesterday, and I have to admit, it was very, very impressive, so I’m cautiously optimistic. But the UK a shot across the bows as you say, came from an interesting angle because I think what really spurred it was the growth, particularly in central London in the shopping streets and Oxford Street, of billboards that facially code you as you’re going past and then put up an ad that they think will be relevant to you. And a lot of people found that very, very creepy. So, I think that’s where that came from.

Lenny: 00:30:22

The surveillance state. I mean, it h—data privacy, all of those things, you know, there are elements of… [laugh] you might remember this, I’m sure there’s some event that you’re at and I was up, I would often use the movie _Minority Report_ during talks back then, as you know, an example of the Nirvana. “Yes, this is fantastic. You’re walking through the mall and you’re getting targeted ads of ‘you need to buy new underwear.’ Yay, that’s wonderful.”

Simon: 00:31:08

Mm-hm. Yep, very much so. Very much so.

Lenny: 00:31:11

All right, so I want to be conscious of your time as well as the time of our listeners. So, I’m going to—all right, Mr. Buffett—

Simon: 00:31:37

Yeah. I think there’s going to be, let’s say, some sharpening of the knives in 2023, in as much as you know, I think if there is recession and particularly a global recession, that an increasing number of companies both on full service and on the platform side, will go out of business. I think that’s probably a healthy thing in the long run. I think we will see the continued rise of the integration of qual and quant. You know, I think it’s very interesting what’s going on in some arenas in terms of the use of chatbots and how those are developing at speed, and the use of personal assistants, you know the Alexas of this world, to conduct qualitative at scale.

Lenny: 00:34:25

You heard it here first, folks.

Simon: 00:35:06

That’s the key. That’s the real key. I think activation is going to be the big theme of next year.

Lenny: 00:35:14

Yeah. All right. So, last question. Before we let you get back to being the massive influencer that you are. Where do you look for inspiration nowadays, Simon, whatever it may be? What gets you excited, whether it’s within this space or outside of the space, but where’s inspiration tend to come from for you?

Simon: 00:35:31

Inspiration really comes from actually working with our clients. We, like you, I think, have increased dramatically the amount of work that we do with corporate insights and data analytics functions, and what inspires me is the determination that I see to be strategically significant and to achieve that activation, achieve that status of a strategic partner. And we’ve been helping stand up various insights functions, and some absolutely brand new in a variety of companies, and just seeing the way in which these professionals are so determined to do this is hugely inspiring. Because I grew up, and I don’t—well, you grew up, too, in the trough of the ’90s, at least in this country, where research was relegated to the basement. You know, it was tactical, there was nothing strategic about it whatsoever.

Lenny: 00:37:09

Very cool. Very cool. Simon, it is an honor and a privilege to talk to you, whenever that occurs or especially in this setting. For our audience, I really do—yeah, I get flowery with everybody, but I want to make sure that you hear very clearly that Simon is a gift to our industry. He has been for a very long time.

Simon: 00:37:49

Well, thank you very much. I’m very flattered. And congratulations on your one-year anniversary. I am a listener, and, you know, I enjoy them immensely.