Large companies innovate more slowly than smaller companies and startups due to bureaucratic processes. Smaller companies have one big idea driving their innovation and can iterate more rapidly. While large companies do innovate internally, they acquire most new products and technologies from smaller startups. Examples are given of large research firms acquiring smaller innovative companies. The combination of available capital, new ideas promoted in popular books, and advancing internet and social media technologies has created the most productive time ever for innovation outside of large companies. Large firms will eventually copy or acquire these innovations to bring them into the mainstream. Many innovations will profoundly change the field of market research.

1. Innovation at the
Margins
Simon Chadwick
AMAI Annual Conference
Mexico City, September 2009

2. Innovation
successful introduction of something
► “The
new and useful”
► Change, departure, introduction, invention,
novelty

3. “Innovation comes from the margins”
Shari Morwood, IBM
October, 2006

4. How easy is it to innovate?

5. The difference between larger and
smaller companies
► Larger companies:
 Innovation requires process
► Business plans, research, approvals, committees, testing, RoI
 Many ideas battling for resources
 Capital access is a competition with all the other needs of the
business
 Often easier to acquire a successful start-up
► Smaller companies:
 Often start-ups
 Innovation is the reason for being – one BIG IDEA!
 Access to capital (private equity or venture capital)
 Rapid iteration in the market
 Failure baked in as a necessity for success

6. Do large MR companies innovate?
► Yes!
 Research International: MicroTest
 Millward Brown: BrandZ, Link
 GfK: Outdoor media monitoring
 Arbitron: PPM
► BUT:the majority of large company new
products come from acquisition

7. Examples of acquired innovation
Acquiring Acquired Acquired
Company Company Innovation
Kantar MaPS Brand Tracking
IPSOS Livra Communities
GfK Arbor Brand Tracking
Nielsen Buzzback WOM
Passive
TNS Compete
measurement

8. Why do large companies acquire
innovation?
► Because innovation is occurring on a larger
scale and at a faster pace than at any time
in our industry’s history
► Larger companies innovate at a slower pace
– therefore risk being overtaken by
“disruptive technologies”
► “If you can’t beat them, eat them”

9. Disruptive Technology

10. Why so much disruptive innovation
today?
► Technology
 Internet
 Social Media
► Popular “new ideas” books
 E.g. “Wisdom of Crowds”, “Tipping Point”,
“Freakonomics”
► Pre-recession availability of capital

11. Some examples

12. Technology: Qualitative

17. Technology: Integrated Qual/Quant
Research>!mpact
Optimum!nsight

18. Technology: Shopper Insights

19. 3d C-Store

21. Technology: Online Sample
Providing online sample direct from Social Media

24. Technology: Communities
Researcher
Listening Surveying
Participant Participant
Observing

25. New Ideas: Wisdom of Crowds

26. Galton’s surprise findings
collective actual
guess weight
= =
1197 lbs 1198 lbs

27. IEM - The original Predictive Market
X 656
Polls ¾
(1988 -
2008)

28. Use of Predictive Markets
► Concept Testing
► Political polling
► Integrated product testing
► Ad testing
More accurate than probability-based tests

29. New Ideas: Integrated Research

32. Summary
► Availability
of capital + popular new ideas +
technology = the most productive era ever
in research for “Innovation at the Margins”
► Large companies will copy and will acquire
these innovations so that they enter the
mainstream
► Many will result in profound changes to
what we today regard as “market research”

33. Thank you!