The MetrixLab/Macromill Merger Is A Massive Shakeup Of The Market Research Industry
Today it was announced that Netherlands-based global research firm MetrixLab and Asia-Pac research technology behemoth Macromill are merging. The combined company will be the largest new-generation research organization in the world.
Here is an excerpt from the press release with the details and an outline of their vision, which should make everyone sit up and take notice:
The new business will operate under the Macromill brand, and be led by global CEO Han de Groot, former CEO of MetrixLab, and Japan/Asia CEO Katsumi Konishi. Former MetrixLab COO/CFO Jan Willem Gerritsen will become Executive Officer managing the US, European and Latin American businesses, partnering with Naoya Sugiyama responsible for people development and general administration and Naofumi Nishi responsible for corporate development. Financial terms of the transaction are not disclosed.
“MetrixLab and Macromill are both known for pioneering survey research technologies on the Internet. Together we will revolutionize market research for the second time in 15 years. In 2000, we brought market research from paper and telephone to the internet by innovating field work and data collection. Now we are evolving the front end of market research and innovating what we actually deliver to our clients.” says Han de Groot, Global CEO.
He adds, “we are working hard to address four challenges faced by our clients: First, market research is highly dependent on survey data. Second, market research output is difficult for decision makers to interpret and activate. Third, market research is slow. Fourth, market research is expensive. With our global scale, technology DNA, vast talent pool, and financial resources, we are uniquely positioned to address these challenges and shift the paradigm of how consumer insights are sourced, delivered and priced. Here’s how:
- Market research is highly dependent on survey data. There are many new data sources for consumer insights development, such as social media data, data streams from mobile devices, and transactional data stored in enterprise databases and CRM systems. Integrating data from additional sources alongside surveys will improve the quality of insights and information. Our solution: integrate survey data with other data for superior, holistic insights development.
- Market research output is difficult for decision makers to interpret and activate. Marketing insights are often delivered in a way that is difficult to interpret and act upon by decision makers outside the market research function. Internal research teams spend more time uncovering and explaining the insights than supporting their activation. Today, with the availability of immersive video games, apps, Skype and FaceTime, converting tables and graphs into valuable business information and actionable insights should not be so intensive or difficult. Our solution: develop engaging, intuitive result delivery experiences.
- Market research is slow. We are in an era that embraces self-service for straightforward tasks, freeing professionals to engage in higher value activities. Even while you can instantly order a video from Netflix, the simplest insights projects require multiple phone calls and emails to specify and initiate the study. Our solution: an online market research app store featuring a wizard interface, 24X7 availability, and connectivity to a delivery portal for real-time results.
- Market research is expensive. Consumer data is abundant and often publicly available. Data collection and analysis tools are continuously becoming less costly. In contrast, global survey research is still very expensive as traditional market research companies operate a patchwork of legacy systems. They struggle to deliver at a lower price point because they are not efficient. Our solution: an integrated, global research infrastructure built on proprietary survey and data management software, global consumer access panels and ultra-efficient business processes, allowing us to realize and share the benefits of efficiency and global scale with our clients, making research less expensive.
Han de Groot adds, “The new combination of Macromill and MetrixLab will continue to expand its global presence organically and through selective acquisitions. We will accelerate our ability to meet our clients’ need for business information and consumer insights on a global basis. We are planning new offices in Southeast Asia, the Middle East and Russia.”
“This transaction creates a market research technology leader that is differentiated by its ability to deliver ground-breaking digital, mobile, social and big data solutions for consumer understanding.” adds Bain Capital Managing Director and Macromill board member David Gross-Loh.
“Macromill and MetrixLab have been leaders in many of the industry’s important innovations over the last 15 years and this merger will accelerate the pace of that innovation. The MetrixLab team has built an industry-leading data management and insights platform and an extensive portfolio of innovative solutions. We are excited to combine our research technologies and deliver them to more global companies. Both organizations share a vision for helping clients uncover consumer insights that lead to better business decisions, and share a passion for data quality and innovation.” says Japan/Asia CEO Katsumi Konishi.
He adds, “We are excited to deliver MetrixLab’s cutting-edge marketing research solutions to our Japanese clients. The new Macromill organization will deliver multi-country online research faster and more economically and this will help our Japanese clients expand into international markets.”
This reads like a manifesto for the research company of the future, doesn’t it? It shouldn’t be a surprise. Last year I interviewed Han de Groot here on the blog, and this is in line with the vision he was outlining then. I’ve had the privilege of working closely with Han on a variety of fronts this year, and I’ve learned that he’s an incredibly astute straight shooter who knows how to build a world class business.
This is a big deal, not just in terms of the rankings of top global MR firms, but also because of the clear signal it sends of the emergence of a truly “next generation” insight organization.
First let’s look at what this does to the pecking order in MR.
According to the AMA Gold Global 25 (based on 2013 numbers) Macromill was number 17 at $184M in revenue and 884 employees. Founded in 2000, Macromill pioneered online research in Japan. Since then, they have actively expanded into foreign markets and established branches in China and South Korea. Through an extensive global network, they conduct studies in over 90 countries around the world.
At the end of last year Bain Capital acquired Macromill for over $500M and the company was refocused on future success by increasing topline revenue and decreasing expenses, putting them on track for 2014 performance of roughly $200M. Macromill has several operating units that make up the parent company:
- M-CUBE, INC.
- M-PROMO, INC.
- DENTSU MACROMILL INSIGHT, INC.
- MACROMILL EMBRAIN CO., LTD.
- MACROMILL China, INC.
- misecolle, INC.
According to the most recent AMA Gold Top 50 (US Focused and 2013 data) MetrixLab was ranked at 31 with $65M. The company was launched in 1999 and has grown phenomenally from inception. Headquartered in Rotterdam and San Francisco with 17 offices across the US, Europe, Brazil and Asia, MetrixLab provides analytics and insights solutions in more than 50 countries.
They have also been on a bit of a buying spree in support of their global expansion plan and without the Macromill deal they will top $100M in 2014.
Their recent deals include acquisitions, investments and JVs with:
- CRM Metrix
- Precision Sample
- Raw Data
- Big Data Analytics with Edwin Kooge and Natasha Walk
This transaction establishes a premiere market research technology company with global reach and first class expertise from a global team of more than 1500 professionals in the Americas, Europe and Asia. The combined company serves over 2500 clients in more than 80 countries, operates 27 offices and generates annual revenues of $300 million.
This is also a highly strategic deal. Both companies were at the perfect points in their development to make this happen. Each company is young with visionary and entrepreneurial leadership that believe strongly in changing the status quo. It’s a position that may be very challenging for the Big 4 to compete against and one that won’t be easy to duplicate for other younger companies in our space looking to vault to the top of the heap.
The new company is now among the Top 10 largest global research companies, ahead of Comscore and the NPD Group. If you remove specialty providers like dunhumby, Westat, IMS Health and IRI and Asia Pacific specific powerhouse Intage from the Top 10 list, MetrixLab will now be the fourth largest global full service firm in the world, behind GfK, Ipsos, Kantar and Nielsen.
And make no mistake, they have those companies in their sights and will become a major competitor to them. I expect The Big 4 will be none too pleased by the exponentially increased competitive pressure this will apply on them.
Let’s take those four points in the press release and think about the implications from a competitive perspective.
They will control the full value chain within their organization, from ‘respondent to report’, including one of the largest DIY survey platforms in Asia – with a new global footprint to expand it and continue to increase it’s capabilities.
Both companies have significant data assets outside of traditional MR including shopper behavioral information, media metering, social media, and web analytics. Combined with the full run of traditional capabilities and a burgeoning data synthesis/analysis framework and it’s easy to see how they can achieve the vision.
This will be a consolidated company aligned along a singular vision: to redefine what a marketing insights organization is in the modern era. With increased competition from tech giants, analytics companies, and consultancies I suspect the new company will look very much like a hybrid of those companies, with a focus on owning data channels through both traditional MR and emerging sources combined with “data agnostic” advanced analytics and world class consulting. And since they do own much of the value chain, including sample access and technology, they will be able to out perform many existing and new companies through greater internal efficiencies, significant cost competitive advantages, and much faster execution and delivery than others.
Truly, the new company has the potential to go toe-to-toe not only with the Big 4 full service firms, but also large niche players like IRI, Comscore, Vision Critical, Qualtrics, Survey Monkey and Research Now as well as leaders in the data analytics, consulting, and visualization spaces. I’m not saying they will expressly target all of those markets, but once the integration is done and the technology within both companies is globally ramped up the potential exists to do so. No matter what, those companies and others like them are likely to feel the heat from the new giant in various ways.
This is a big deal to close out a big year of change for the MR space, and I can’t wait to see how it will play out in 2015!