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Interview of OMI CEO Alexander Shashkin about the ESOMAR Congress 2009

“Researchers started using Internet more and more often”, - says Alexander  Shashkin, CEO at Online Market Intelligence.

Russian researchers have different impressions of the annual ESOMAR congress. Some people think it is more important to keep working in the office, others think that participating in this congress is mandatory. Among the last group is Alexander Shashkin, CEO at Online Market Intelligence. In his exclusive interview to R&T he shared his observations of the ESOMAR congress (Montreux, Switzerland).

You have just come back from the congress. What was the most important?

The brightest impression of this trip as well as the previous ones was communications with people. It allows you to understand what really happens within the research business, better than presentations that usually describe only certain cases. Communication shows the state of business from real people, and allows us to put together the pieces of the puzzle and see the whole picture of the industry.

You went to the congress last year. What has been changed?

Russian market researchers have become more active. For example, last year our company was the only one exhibiting Russian company; this year there were two more Russian companies – COMCON and MarketSence.

Another observation is related to the progress of using Internet in market research. Most likely, this is connected with the participants urge to adapt to the new situation. Many European fieldwork agencies are facing a choice: to stay where they are or to extend their capabilities using online sample providers. For example, companies that have its own CATI-studios and interviewers for face-2-face studies experience issues due to the increasing use of online research. Currently they are thinking of keeping their competitive advantages, and probably they will soon introduce their own interactive online. It allows using many interesting possibilities, like analyzing social networks, blogs, using media resources on the Internet. Using web-cameras also makes it easy to follow people’s everyday life.

Are those technologies already popular in Europe?

These are still only ad hoc projects.

Has social network research been discussed a lot at the congress?

Social networks were discussed actively, mostly because of their wide targeting capabilities. If we sum up all the personal data shared on the net, if we learn that he/she is a real or potential consumer of one or the other product or service, and ask questions about the product to this particular customer, then the quality of the research will significantly rise.

So, is it possible to talk about the extension of a company’s range of services by using interactive-online as a trend?

You cannot say certainly. There are people who try to keep their traditional specialization. I have spoken to people from a British company that conducts only in-house interviews. Their amount of work is going down but they are planning to keep their specialization because they are sure that their positions on the British “in-house” market are quite strong and the clients will keep coming no matter what.

How did the recession affect the consolidation of the research market?

The trend of market concentration rise is obvious. Let’s take well known American company Greenfield. At first they acquired European company Ciao!, then Microsoft bought them out. Now French company Toluna bought Greenfield research business from Microsoft on the crisis wave and became the biggest international player. During the past year a lot of important local companies have been sold, for instance in Latin America and Africa.  As a whole, the industry growth rate is not very large, only 3-4 %, but the growth of the big companies is much higher as they make three to five M&A deals annually.

To what extent do you think companies are ready for different types of partnership, for example, for panel consolidation?

Consolidations and unions are usually profitable for weak players. Strong players do not need that. At the same time, there are still conditions for alliances. One of the results of our visit to ESOMAR Congress is that we started negotiations with Proximity Panels. Currently this company is doing online research in Belgium and Poland and initiated the idea of the community of local players – a centre where the information about best local players and their online panels will be kept. This centre would process the requests and forward them to appropriate local companies. Also, they are planning to monitor the quality of all local panel suppliers on a permanent basis.

Such a union is quite reasonable. Being global company, it is about impossible to utilize local panels in different countries effectively. In our business, many things really depend on how well you know local market, culture etc. For example, on the panel websites of some global panel conferences texts and profiling questionnaires are translated without social and cultural specifics of each country they work in. In Russia, it is hard to use such incentives as air miles or online store cheques, those stores just do not deliver purchased goods to Russia or charge extra for such deliveries!

How did the worldwide recession affect the infrastructure of the market?

While talking to people who are responsible for international business we discussed this subject and found out that many end clients now try to build as short ‘chains’ as possible. They hire a person who finds local partners and works with them directly, without any brokers in between. This is one of the instruments for cutting expenses.

The same tendency we can see among global researchers. Global players like TNS and Nielsen now pay more attention to the expertise of the local market. However there are some countries that declare they are global. I have personally seen a giant showcase of an Indian company with a list of countries and the panel size in each. In fact it appeared they actually do not have panels in Russia, but this was shown there! And this fact did not make them feel uncomfortable, they just said: ‘We work with partners and we do not know who they are’.

Should not the crisis have cleared the market of such companies though?

Unfortunately, it has not. I saw a few more new similar companies. I have to admit that in Russia everyone traditionally does everything. However, I think that the effect is better when people concentrate on one thing and improve their work in that field.

How do you evaluate the interest to the Russian market?

The interest practically has not changed, if there is some increase it is very small. Let’s say, Japanese clients are increasing the amount of projects but the number of requests remain the same and the real number of projects has even lowered. We face a real crisis of default payments or payment delays, there is even ‘black list’ of companies which are on the bankruptcy level and researchers avoid working with them.

Are you planning to attend ESOMAR congress in future?

This is a must. For us it is like air: all our international contracts (their share is about 40%) were signed as a result of such trips. This year the delegation from Russia was about 40 people, including big end clients. On the other hand, many large and well known research companies were not there.

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