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The best connections

When today‘s researchers map out our future, it is only natural for them to touch upon all manner of concepts and pioneering technology. However, when they turn their attention towards how we will go about our business in the future, one key word in particular is almost guaranteed to come to mind: connectivity.

Transport researchers define this as technology that will enable cars to connect with other cars, road users, weather services, control centers and entertainment services in real time. By using this connectivity technology when on the move, drivers will be able to avoid collisions, evade icy roads and receive traffic jam alerts (as well as automatically warning others about congestion). One day, this technology will even enable them to travel by car for hours without having to touch the steering wheel at all.

Connectivity is therefore simply the art of combining technology and knowledge to create considerable benefits for us all. It allows us to take things a step further by thinking beyond traditional limits and by stepping out of our silos. It involves building connections between elements that belong together (even when these connections are sometimes extremely difficult to recognize), and ultimately finding even more effective and efficient ways of meeting objectives that previously seemed unobtainable. In other words, connectivity is exactly what GfK is currently putting into action on all levels.

“Using meaningful connections to create value is an essential basis of our business model,” explains Matthias Hartmann, CEO of GfK. “We can only develop forecasting models that help our clients to generate the largest possible return on investment if we are able to recognize relationships and patterns – for example between marketing and technology, media usage and buying behavior or the way in which consumers express their preferences.” Or, to put it another way, connectivity is the engine that dynamically drives GfK’s business model – and that of its clients.

GfK’s various levels, research disciplines and approaches contain a host of examples of the highly dynamic way in which the company builds connections. These include unprecedented combinations of technology that open surprisingly new horizons. Connections between strong brands and their (potential) followers, who can be reached in new and significantly more effective ways. Between knowledge gained in the past and future potential. Between data from a range of sources which GfK can combine intelligently to help gain unexpected insights into how consumers think and act – always under the condition that all data protection requirements are observed rigorously and that consumers‘ anonymity is protected. Virtually none of this would be possible without the connections GfK is making between its many different competencies. 

We listen carefully

GfK MarketBuilder Voice is an impressive example of the way in which new technologies can be combined with conventional skills to create completely new possibilities. First introduced by GfK in autumn 2015, this innovative analysis tool is based on the insight that, although a good survey encourages consumers to reveal a great deal about whether and how much they like a product, the way in which they give their answers has not been considered until now. As the proverb goes, “It‘s not what you say, but how you say it.“ However, although the way in which something is said is highly relevant, it has never been systematically recorded until now. This is why, together with scientists from Imperial College London, GfK has developed the first software to record parameters such as the pitch, intensity or intonation of consumer statements empirically. This immediately adds a new and highly informative dimension to consumer research.

To find out exactly how GfK MarketBuilder Voice works, click here

We unlock potential

GfK follows this approach to systematically expand its clients‘ business potential. It not only intelligently combines knowledge and information to uncover sources of revenue and business fields, but often even succeeds in discovering brand-new markets. Every successfully operating market environment is built on a reliable currency in which the value of its goods can be calculated and negotiated. 

While it is relatively easy to determine the price of tangible goods such as coffee, computers or cars, calculating intangible values such as the impact of a YouTube or TV spot or online ad is far more complicated. How can you work out the price of an advertising campaign if nobody knows how many consumers it will reach? What can and what must advertising time on specific channels cost if the price is to be fair? How many and which customers will not only receive but also register the message? And how many of these customers will be inspired to make a purchase? What is the expected impact on the brand?

“We are one of the leading market researchers that have single-source panels to answer these questions,“ explains Friedrich Thoma, Global Head of Strategy at GfK. “By simultaneously mea­suring consumers‘ buying behavior and media usage, we can, for example, measure the actual influence of mobile or TV ads on buying behavior or model the optimum marketing mix.“ 

„We are one of the leading market researchers that have single-source panels.“

Friedrich Thoma // Global Head Strategy GfK

We recognize patterns

This ability is all the more important given the growing amount of information, which is making the situation more and more confusing. If you make the wrong connections because you are unsure about how to read the coordinates, then you will almost certainly fail to meet your objective. These days, data analysis is becoming more and more like a process of lining up ever growing haystacks in which extremely valuable needles are hidden. The trick is therefore not only to be able to collect and process vast amounts of data, but – more importantly – to be capable of identifying the key pieces of information from these huge mountains of data and of creating links between them. One person with this rare skill is Dr. Roland Werner, Global Head of Data and Technology at GfK.

“We are confronted with a world where almost everything is interconnected,“ explains Werner, who has a PhD in computer science. “Rigid and one-dimensional relationships are being replaced by multilayered, flexible and ambiguous connections that are nevertheless relevant.“ Examples of this phenomenon include social networks such as Facebook and the many-sided, constantly changing connections that are difficult to identify but have an enormous influence on consumer preferences and purchase decisions. According to Dr. Werner, the ability to decipher the relevant patterns from the seemingly never-ending jumble of data is key. “Black-and-white distinctions were yesterday. Today is characterized by shades of gray. Only companies that can decode these gray tones will be able to continue supporting decision-making processes.“

To name just one example, these countless shades of gray include rainfall data collected in the Brazilian state of Minas Gerais. At first glance, it appears that this data has nothing whatsoever to do with Christmas in Western Europe and the buzz created in certain Facebook groups. Similarly, the different consumer preferences found in Northern and Southern Germany seem to have little in common with the price of coffee capsules. And what role could climate change campaigners and environmental activists possibly play in this confusing mishmash of information? But, more importantly, what does all this say about the sales potential of coffee capsules?

We plan ahead

Actually, it says a great deal, as Dr. Werner and his team have demonstrated. In a pilot project, the data scientists proved that the sale of coffee capsules can be predicted relatively reliable provided that you are able to identify, understand and combine the relevant data. In this instance, among other things, “relevant“ means the lack of rainfall and the resulting poor harvest in Brazil (the most important coffee exporter in the world), the Christmas season (which is normally accompanied by record sales of coffee capsules and coffee machines), and the announcement made by a coffee capsule manufacturer of its intention to raise its prices due to the drought in Brazil and increased purchase costs. Dr. Werner‘s graphs show very clearly how the very negative online responses to this from various groups of consumers resulted in coffee drinkers hoarding coffee capsules. Due to different geographic preferences among consumers, the effect varied from region to region. It is also obvious from Dr. Werner’s data sheets that the growing controversy surrounding the environmental impact of coffee capsules had a major influence on sales figures.

“It‘s all very confusing, isn‘t it?“ asks GfK‘s top technology expert with a smile. “It certainly seems that way at first. But if you know how to interpret the data, a very clear picture emerges.“ And, in actual fact, one of Dr. Werner‘s graphs shows how GfK can use the complex information available today with astonishing precision to make recommendations based on expected consumer decisions. All in all, a branched yet clear line could be drawn across countries and over several months between the drought in Minas Gerais and the retail sales.

As discovered by Dr. Werner‘s team, the crystal balls of our time are digital and interconnected, and they go by the name of data.

We master complex scenarios

The work conducted by the data scientist and his team on coffee capsule sales may only have been a pilot project, but in the future such investigations will become increasingly common in the daily lives of market researchers. They will be able to determine customers‘ wishes and future purchases more and more accurately, even if the customers themselves do not know what they want. The key term here is Big Data.

“From the very beginning, GfK has been a leader in the central processing of huge quantities of data,“ explains Werner confidently. “But now big data technology enables us to process a greater variety of data much quicker and more cost-effective than ever before.”

In order to capture and use this ongoing stream of data, Dr. Werner and his colleagues have been working flat out for the last few months on a project called “Data Lake“. In the future, this gigantic virtual lake, which is fed with data that GfK has collected from around the world, will form the shared reservoir of all its data sources. The data scientists of GfK will be able to select suitable information for their specific needs from this vast array of data, which will range from sales figures from virtually any industry to media usage data and studies from almost every group of consumers and region in the world. If you multiply the enormous spectrum of topics by GfK’s long-standing history of collecting data, you will appreciate what Dr. Werner means when he refers to the „hundreds of terabytes of data“ that will shortly be available in the Data Lake.

What is more, if required, the information from the GfK Data Lake can be enriched with publicly available data, social media feeds and information from our specific client. This is how GfK transforms Big Data into Smart Data, and raw data into valuable knowledge. And suddenly, by making the right connections, there is a clear, unmistakable picture from the unstructured and highly complicated masses of information. And it very quickly becomes clear where the clients‘ journeys may lead. 

We turn darkness into light

However, all this is just the beginning. The advance of the Internet of Things will give future market researchers access to even more relevant data to process and analyze. Ultimately, the ongoing process of digitalization is simply the powerful perpetual motion of data production, which is constantly producing new information. This torrent of data would be a curse for anyone trying to master it using yesterday‘s methods and means. GfK, on the other hand, sees it as an enormous treasure trove and is currently investing in expanding its data processing capacities so that these can be scaled up even more effectively in the future. The nucleus of this development can be found at the Nuremberg-based headquarters.

Here, an inconspicuous office with a dozen or so desks and computers houses the “Data Lab”, which was established in 2015. The team comprises data scientists from Poland, the US, Ukraine, Iran and Germany who are among the best in their field. Their task? To develop technology and methods to make GfK´s integrated data analysis even more effective. Their expertise? Unique. “Our tasks and the opportunities we provide attract high-caliber, talented professionals from around the world,“ says Dr. Werner with satisfaction. “This, in turn, broadens our horizons. After all, the scarcest resources are not storage capacity, but human creativity and skills.“

This means that, just as the world changes, GfK changes, too. The only difference is that GfK moves slightly quicker, more radically and purposefully. In other words, GfK never stops extending its lead. The increasingly close connections the company is building within itself play a major role in this.

„For each project, we combine the people with the best skills and most relevant experience to form a powerful team.“

Matthias Hartmann // Chief Executive Officer GfK

We combine competencies

“We come from a decentralized world,” says Matthias Hartmann, CEO of GfK. “In the past, many of our competencies were scattered about. Today, however, all our organization’s skills are available at any time on virtual internal market places. For each project, we combine the people with the best skills and most relevant experience to form a powerful team.”

From the Automotive and Consumer Goods industries to Media & Entertainment and Travel & Hospitality, GfK has experienced experts in almost every relevant field who are qualified to ask the right questions and help find the answers. GfK also boasts the relatively unique combination of expertise in both Consumer Experiences and Consumer Choices. While most of GfK’s competitors concentrate on just one of these domains, the company is able to draw links between the knowledge it gains from both panel-based consumer research and specific market research projects. GfK has around 13,000 experts in more than 100 countries who use digital data processing techniques to constantly generate new findings even more quickly and accurately than ever before.

We write the future

Already of huge importance, this skill will become invaluable in the future. If you know how to combine the right information in a large number of different disciplines and industries, you can use this data to foresee trends and make reliable forecasts. This approach transforms conventional re-search (which traditionally looks back to the past) into analytical pro-search, which uses well-founded predictions to help clients prepare for the future. It turns vague forecasts into precise foundations on which sounder, more successful decisions can be made.

This means that GfK provides brands and manufacturers with the most reliable way of connecting with both current and future customers. After all, in this age of excessive complexity, GfK’s ability to make meaningful connections is indispensable in order to predict the future in what is still the most reliable way: by shaping it for one’s self.

General