The past few years have seen a great deal of change to Scotland’s more high-profile marketing disciplines. Advertising, media, design and new media agencies North of the Border have clearly been feeling the winds of change in recent years with clients demanding more for their budgets, business migrating South and a number of agencies in all disciplines going to the wall.
On the surface, then, the market research sector would appear to have been comparatively tame. The smaller number of agencies operating in Scotland appear, at first glance, to be motoring away below the radar as if there wasn’t a care in the world. However, a quick glance beneath the surface reveals that this too is an industry that has been undergoing changes.
The first is that, according to those within the Scottish market research sector, the research process is now being taken much more seriously by clients. Mark Cuthbert, managing director of Progressive Research, said: “I think there has been a change recently. Over the last few years – and I don’t think that this is just me being industry-loyal – I think that the Scottish industry has really moved forward and is being taken more seriously. For us that’s great, because we truly believe that this is an invaluable service for clients.
“We are being seen more as a key strategic partner, in the same way that advertising and PR agencies are. It also makes our jobs easier to do, through being an integral part of a client’s business.”
“I think it is definitely being taken more seriously,” agrees Jo Fawcett, managing director of George Street Research. “In days gone by there were occasions where people were just looking to buy a yard of research. I don’t think that happens anymore. It’s taken much more seriously and the clients are looking very hard at who they hire, and looking to get a lot more value returned.”
This increase in scrutiny from clients has coincided with a decrease in private sector contracts, something that will be more than familiar to those working within the advertising, design and new media sectors.
Chris Eynon, managing director of TNS Public services, remarked: “Over the last couple of years the marketplace has seen a marked decrease in private sector business. Mergers and acquisitions have had an effect. One of the major ones being Bank of Scotland, who shifted its entire research department down South when it became part of Halifax.
“My view is that that are a lot fewer private sector contracts now than there used to be. To an extent this has been counterbalanced by an increase in public sector work.
“It’s very difficult to say that the public sector work accounts for what we’ve lost, but I wouldn’t want to say that it totally does.”
This increase in public sector research contracts has come largely from the Scottish Executive, which is now spending more money on researching its marketing campaigns. Jim Law, managing director of MRUK, said: “There’s been a significant increase in marketing and communications research from the government. There’s always been big government surveys, but there’s been a large increase in recent years in researching public sector marketing campaigns.”
Another development familiar to many in the marketing services sectors is an increased interest in Scotland from Southern-based companies – something the Scottish market research industry has also been facing.
“I suppose there’s two things that have been happening in Scotland in the last few years,” said Fawcett. “We have seen a big growth in public sector research and my perception is that Scottish-based agencies have become much wider UK-players. We’ve also seen much more London-based players encroaching on our market.
“I think they have recognised Scotland as a strong market, but none of us just focuses on the Scottish market and I think that’s a good thing for everybody.”
“I think the market has increased a little but it has become much more competitive.”
One of the ways that agencies North of the Border have reacted to this increase in competition has been to specialise in niche sectors, offering clients in those sectors experienced, strategic thinkers who know a particular marketplace well.
“I believe that it is important to specialise in specific sectors,” said Eynon. “Because I believe that clients don’t want to buy research specialists, they want people who understand their company and understand their business.”
Law commented: “We have been widening the sectors that we are involved in. For example, in the last couple of years we have become heavily involved in local police force work. We have expanded into the social sector and developed niche expertise.”
Cuthbert points out that specialising in several different niche sectors can be of benefit to an agency’s clients. He said: “It’s important from our perspective because it keeps the job fascinating. We get ideas and thoughts from completely different industries that can help our clients. But from a completely selfish point of view it’s just interesting for us. We like it.”
Another way to combat the decrease in private sector contracts and the increase in competition from English research agencies is, of course, to expand outside of Scotland for business. Law maintains that this is essential for Scottish companies who wish to continue growing. He remarked: “There’s definitely a change in the structure of the industry, where a number of indigenous Scottish market research agencies can no longer survive solely on the business that is here so some of them have looked at expanding their business activities throughout the UK.
“There comes a point where, if you don’t restructure or realign your company to where the opportunities lie then, what you do is just fight over a continually diminishing market. It’s not that there are a lot of companies sitting here that used to spend a lot of money on research and now don’t, it’s that those companies have either gone out of business or have shifted their research-buying departments down South.”
Eynon agrees, stating: “I think that the Scottish market is fairly finite. It’s difficult to know how this will be sustained. I don’t know how many market research companies that Scotland can support. I think there’s a parallel with the advertising sector, where companies are being forced to look outside Scotland for business. It’s the same with the market research industry.”
Certainly the sector faces challenges from various sources, but they are challenges that the Scottish research houses are meeting head-on. And with increased specialism in a range of niche areas, strong proven track records and increasing presence outside of Scotland’s borders, the industry seems in a strong position to move forward, whatever the winds of change may bring.