Against their will, ad agencies dabble in research - for now

The move is a response to what is considered a lack of deep enough research on the still developing market here. But agencies stressed that this new activity will only be a sideline that will exist until outside research meets their needs.
Such a lack of detailed information about consumers prompted advertising agency J. Walter Thompson/Parintex to invest in an extensive consumer profile, said Frederic Winckler, the agency's general manager.
"There was never a truthful look at consumers," he said. "There was a complete lack of information."
As a result, the agency teamed up with research firm Consumer Attitudes and Social Enquiry (CASE) as well as two of its clients, Kraft Jacobs Suchard and Unilever, to pool $70,000 for the project, said Winckler. He would not disclose how much the agency itself ponied up for the project.
The research for the project lasted six months and was based on interviews with 2,000 people, Winckler said.
J. Walter Thompson and its clients decided to invest in their own research because there was no in-depth survey of consumer segmentation and purchasing behavior in Poland at the time, Winckler said. But the agency would have preferred to simply buy the information from an outside source.
"If something had existed, we would have used that," Winckler said.
This is a complaint heard in other ad agencies as well, which said Poland continues to lack enough detailed information about consumer preferences. And the lack of information has pushed other agencies to conduct their own research projects.
Young & Rubicam, for example, borrowed a cross-cultural survey designed in the U.K. for a project in Poland, said Agnieszka Grynkiewicz, research director with the firm.
Still, this doesn't mean that ad agencies are going to try and compete with research houses. Generally, agencies purchase about 95% of their information from outside research firms, Grynkiewicz said.
And research agencies don't see survey efforts by ad agencies as a new competitor.
"It's not a threat to us," said Marek Biskup, client service director with SMG/KRC Poland-Media. "Usually agencies don't do that and hire research firms." He added that even when agencies do their own research, they often subcontract part of the work to research agencies.
If agencies decide to do their own research, it's usually "because they want a unique product," Biskup said. This could be because the research must be tailored to a particular product, or because the agency wants to show a client that it has unique information to offer.
"For agencies (own research) is added value," he said.
But this value comes at a cost in both time and money that for an agency often isn't worth it.
Research companies "do that cheaper, better and more professionally," said Roman Fedorczuk, president of ABK & Company, a small advertising agency. "To do that on your own, it increases costs terribly."
Ad agencies that do their own research from time to time can try and make it pay, but that's not an easy task.
"Ad agencies don't sell the reports," said Young & Rubicam's Grynkiewicz. "If they do that, it's a side activity."
Biskup went even further than this, saying that for ad agencies to take on extensive research projects amounts to a waste of money. "It doesn't pay back," he added.
But some agencies will be forced to do research until the depth of information available from outside companies is sufficient to meet their needs, Winckler said. He added that in the case of the survey undertaken by J. Walter Thompson, research firms had not done such a survey because it was too expensive and they weren't sure if they could sell it.
"No one wanted to break the ice," Winckler said. "This was a shot in the dark."
Because of the high cost of doing the research, J. Walter Thompson is trying to sell the report to recoup some of its investment. The agency is selling the report to all comers for $10,000.
Winckler would not say how many copies of the report the agency has managed to sell. But he added that the agency doesn't see the report as a separate source of income.
"It's not our intention to be a research company, however, it's our intention to get the information we need," said Winckler. "This is the tool we wanted; we are able to demonstrate that we understand consumers. Marketing departments cry for that; nobody was able to give them that before."
But while J. Walter Thompson could swallow the cost of such research, most smaller firms don't want to or can't. ABK said it could buy fairly precise research from a firm like SMG/KRC for about $2,000 and that this made better sense. The company certainly doesn't intend to purchase the J. Walter Thompson report.
"$10,000 is terribly expensive," the agency's Fedorczuk said. "We cannot afford that."