Market research firms look to standardize industry practices

One of the most often heard complaints in the industry is that firms blow up their sales figures to gain a higher ranking on a variety of different industry listings, such as the WBJ's list. That gives customers a skewed view of which firms are the most active and reliable, the companies said. (See also The List, page 13)
"Some customers look at this list and check the position of a company before they order a study," said Jan Garlicki, vice president of the Polish Society of Market and Opinion Researchers (PTBRiO).
To stop that, one trade group - the Organization of Firms of Opinion and Market Research (OFBOR) - wants to hire an outside auditor to go through each of its 11 member firms and sign off on the sales figures they disclose, said Wlodzimierz Daab, chairman of the OFBOR Professional Responsibility committee.
"My feeling is that, yes, there are one or two items (companies) that might change" its ranking within the top 10, he said.
The audit will verify if reported sales from member companies include only figures from market research and that companies do not include subcontracted work handed out to their own subsidiaries. The audit will be distributed to publications which rank market research firms.
"I think it's a great idea because to build rankings on the self-declaration of agencies is unreliable," OFBOR member Krzysztof Kruszewski said, adding that agencies can easily enlarge or decrease numbers to boost their ranking. "If we want to present the industry as trustworthy, it's good to present information which is audited."
At the same time PTBRiO and its 30 members plan to put together a study on the prices charged by different firms for market research and make recommendations on what constitutes a "safe price" for research.
Instead of bringing down prices, PTBRiO is actually trying to show clients that low-cost studies often result in inferior quality, said Andrzej Ludek, the society's president. He said that such studies often turn potential clients off from market research in general.
To solve that, PTBRiO has introduced several regulations including codes governing the organization of research and methodology, presenting results and interviewing techniques.
The firms active in both groups are eager to be seen as "quality" outfits - those with good reputations are most likely to reap the millions of dollars in market research business that is coming from media here.
"The main purpose is to formulate, to establish, some ethical standards, quality standards, for marketing research," said Slawomir Nowotny, President of the OFBOR board.
Market research firms have watched their sales soar in the last few years as a number of new television stations launched operations and were hungry for information on how viewers were reacting to their programming. Two of the highest profile stations, Nasza and tvn, did not begin broadcasting until last year.
The new stations helped market research firms' revenue jump 74% to zl. 157 million ($45.50 million) in 1997, according to PTBRiO.
While the firms themselves may be on a quest for "quality," their customers see little problem with the accuracy of the research distributed. What they see lacking is a diversity in the kinds of services market research companies offer.
Marek Janicki, general manager of McCann Erickson Poland, does not see a need for further regulation of the industry. Instead he thinks the industry should focus on introducing more advanced techniques, particularly studies which provide sociological profiles of groups instead of just demographics.
Market research firms "are quite good at relatively simple techniques," Janicki said. "I don't think they're able to use sophisticated techniques that are available in the West."
Malgorzata Grzyb, media director of Leo Burnett, said the main problem her agency has with market research firms is timing. She said she sometimes finds it difficult to quickly obtain data after research is completed.
Overall, though, she said she finds the media research industry acceptable and does not see a need for further regulation, at least within the television industry. "Generally speaking, I think it's improving," Grzyb said. "As the market is developing so is media research."
That development may take longer, particulary with regards to OFBOR's auditor. Nowotny said the organization has had a difficult time finding a company that would be willing to do the job, which requires certifying sales from a variety of invoice forms.
According to Kruszewski an audit was started by the group earlier this year but was stopped after reviewing only two organizations, SMG/KRC Poland Media and IQS. He was told that the organization needed to establish further regulations before continuing the audit.
The group may have to wait for its auditor, but in the meantime it plans to push its way further into the daily life of market research companies. In addition to establishing guidelines for conducting research activities, OFBOR also wants to serve as a potential arbiter for complaints filed against member companies, said Katarzyna Staszynska, OFBOR board member.
"We don't want to replace the court but we want to open another option which is less conflicting," she said.