Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

{audio:0:00:01} Joe, can you share some background to when you first joined YouGov?

{audio:0:00:07} I joined YouGov in 2000, over 20 years ago. The work that I had previously been doing was as a graduate trainee and then, latterly, as a research executive at what, at the time, was called Ipsos-Rsl. It had previously been Research Services Limited; it was then Ipsos UK and it is now part of Ipsos MORI. That was a traditional research agency that specialized in all the kind of work that a traditional agency specializes in. It did a lot of face-to-face and as well as a lot of telephone surveys.

{audio:0:00:48} At the end of the 1990s, however, the internet was seen, by many people over a number of industries, but particularly in research, as the next big thing. Ipsos had a reputation for innovation in the area of technology. It had done a lot of interesting things with laptops, back in the 1980s and adapted those for face-to-face research. It wanted to get into the world of internet research. But, as is so often the case, the next big thing is not particularly well understood by a lot of people. Various people at Ipsos wanted to do internet research but didn’t know what internet research looked like.

{audio:0:01:30} I was involved with developing internet-based research, at Ipsos. Initially, that focused on a whole range of different subjects – everything under the sun – except political work. It was political work that I was particularly interested in, having graduated in politics. The work that Ipsos was doing, crucially, was not nationally representative. They were doing a survey, for instance, of washing powder, among a specific group of users of that particular washing powder who had been recruited, rather than the national picture, to find out what they thought of it. It was really dipping a toe in.

{audio:0:02:17} Ipsos didn’t really take it particularly seriously, at least not at that time. One of the reasons for that was that they had an awful lot of work that was done via face-to-face and the telephone so they had vested interests in those areas. They weren’t willing to sacrifice a lot of that work, on the altar of online research, just as an experiment. That’s why someone, fresh out of university, as I was, but with a knowledge of the internet, was placed really at the forefront of their work.

{audio:0:02:54} When YouGov was being thought about, before it existed as any kind of actual entity, part of the offering that YouGov would provide was a polling element. I was contacted by the two guys, Stephan and Nadhim, who were setting YouGov up, to come on board from the very beginning and head up that polling side of YouGov. Back in those days, YouGov covered a whole host of different things and it presented itself as an e-democracy website, focusing on politics with various different elements; everything from an online bookshop to a recruitment consultancy for government jobs. Polling was just one aspect of YouGov at that stage and that’s the bit that I was involved in.

{audio:0:03:39} My role was to build up the company’s technical infrastructure, essentially to get it into a position where it could use the internet to conduct, not just research, but representative research; representative of Great Britain and the UK, for their adult population. Not just for elections, but for everything else.

{audio:0:04:01} Can we walk through how you would, typically, work with a client for custom research at, let’s say, YouGov, in the early days? Let’s say I am a big brand, like Pepsi, and I want to know more about my UK consumers and their habits, what is the process of conducting and organizing that online market research?

{audio:0:04:25} It’s really difficult to summarize things in terms of a typical survey because these things are so different. It would be like going to a car dealership and saying, I’d like a car please; there are lots of different cars that are available that suit different purposes, at different times. It’s exactly the same with research. We tended to work in terms of general approaches. We had our own proprietary technical infrastructure, which allowed us to conduct surveys among different populations. But there were key questions that we would always ask of a new client. Who did they want to speak to? What type of people did they want to speak to? How many people did they want to speak to? What questions did they want to ask? How many questions did they want to ask? What kind of output were they looking for? Were they looking just for a set of results tables or were they looking for us to explain those results? Were they just looking for a data file? It’s hugely variable. One client may want one thing, at one time and it may be very different another time.

{audio:0:05:29} We, as researchers, would work with the clients to really try and answer those questions. Some clients will have very clear and specific answers to those questions. You can ask them and they will be able to run through the answers very quickly. Other clients – sometimes even the same clients but at different times – would need much more guidance. The whole process would become much more of a discussion, an ongoing discussion in many cases, with the client, about what their overall aims of the survey were and how that could then be achieved through a series of questions and the type of analysis and the type of people that you go to. It really does cover a full range.

{audio:0:06:10} In some instances, you will have people come to you with an entire, oven-ready questionnaire, all ready to go, knowing exactly who they want to speak to and they just want to run it through our service. On other occasions, you will have clients come to us with just the vaguest of questions and we deal with everything in between. It’s all about providing the most appropriate response for those clients.

{audio:0:06:33} At the heart of the process, however, is this idea of active sampling. Internet research has been around for a lot longer than representative internet research has been around. The early days of internet research had pop-up ads and things like that simply saying, do you purchase socks? Do you wear socks? Come onto our survey and answer questions about socks. You would get tens or hundreds or thousands or tens of thousands, hundreds of thousands of people replying to these surveys. But they themselves were replying because they were interested or because they wished to take part. Sometimes, they could take part as many times as they liked and anyone could take part. That’s what is called passive sampling. That kind of passive sampling does not give you the kind of controls that active sampling provides.

{audio:0:07:26} Active sampling is the basis for all representative internet research. Active sampling means that you can contact only the people that you want to take part in a survey and only those people are allowed to take part and, crucially, they are only allowed to take part once. It means that you contact the right number of old people, young people, men, women to be representative of the country, as a whole, rather than just have people pile in. That forms the basis of all of the work that we do, even if the precise nature of the work then varies along a big spectrum.

{audio:0:08:02} Is that the advantage for YouGov that they can actively sample from the panel, to serve those clients?

{audio:0:08:11} The advantage that a company like YouGov has is the size of its panel that’s available. YouGov are not, by any means, alone in being able to offer a large panel. Various other companies, such as Toluna, Donato, Civic, can all provide a panel of British respondents but the particular advantage that YouGov has is that its panel is, firstly extremely large but also and crucially, the amount of data that they hold on some respondents goes back a very long way. As I said, YouGov started in 2000 and, from the very first day, we were collecting data on respondents and then putting that in our database, so that it could be queried, as any data in a database could be. What that means in practice is that you, for instance, are the British Election Study, the largest academic, political study of its type in the UK. They first ran a survey, with YouGov, and I was instrumental in working with them on this, so I remember it very clearly, back in 2001; the 2001 General Election.

{audio:0:09:19} YouGov collected a small sample of around about 3,000 respondents, who took part in the 2001 General Election and they voted and that data was recorded. Since then, we’ve had an awful lot of political events such as local elections, national elections, General Elections, as well as referenda. As time has gone on, all that data has been collected and we’re now at a stage where, I believe, 30,000 take part in the British Election Study, not just at elections, but at regular times in between elections. All that data can be linked together and, for some of those respondents who are still taking part, you can link data going back to 2001; 20 years’ worth of individual level, tracked data. That kind of offering cannot be provided by anyone else because the Ipsoses of this world only started getting their panels together and in order in the late 2000s. Even in those cases, in some instances, for some companies, they didn’t link the data up and they don’t have that historical data. A company like YouGov does have an advantage in that respect, because they have so much historical data. That’s not always going to be essential for a lot of clients but, in some cases, it can be very useful.

{audio:0:10:45} How do the likes of Kantar or Nielsen – with the TV or consumer data that they collect – approach active sampling versus what YouGov would do?

{audio:0:10:56} Essentially, everyone now approaches the sampling of surveys in, fundamentally, the same way. They all have access to panels. Sometimes, that will be their own panel. At my own company, Deltapoll, we don’t have our own panel; instead, we use proprietary panels for other companies. We will go out to specific panel companies, be it in the UK, Europe, America or, indeed, anywhere in the world, and we will use their panelists to drive respondents to our surveys. In the case of a company like YouGov, they have their own panel. Kantar has a small panel and they supplement that with other panelists from third parties. But, essentially, it’s the same process. You access panelists and you offer targets for quotas; in other words, the number of people in different groups that you want to survey, be it based on gender, age or a whole combination of different things. Those people are then contacted.

{audio:0:11:57} In the old days, they would be contacted simply via email. Nowadays, it can be via email, via push notifications on mobile phone apps or a whole host of different things. They are then invited to take part in the survey, in a given period of time. They take part in that survey; their data is collected. Sometimes, that data will be linked up to previous data they have given. On other occasions, it won’t be. Those respondents are usually – although not always – incentivized for taking part in that survey. The incentive varies from panel to panel but it’s usually cash-based in some respect. It might be vouchers; it might be a prize draw but certainly, it will be something you can spend.

{audio:0:12:41} In terms of how the likes of Kantar or Nielsen versus YouGov would collect the data, obviously, YouGov has the panel which is somewhat constantly engaged and they can use, as you said, push notifications or online. Does Kantar and the other big players use the same method or are they still using a more offline, either face-to-face or phone, to collect the active samples?

{audio:0:13:07} What you’re asking there is a fundamental question about the way that these different companies operate. A company like YouGov is committed to a particular survey methodology; specifically, online surveys. 99.9% of the surveys that YouGov conducts are conducted online, be that in the UK or in other countries. Most of the time – although not always – they will use their own panel to do that. A company like Kantar or Ipsos or many others, or even a company like Deltapoll, my own company, is instead methodologically neutral. That means we are not wedded to a particular survey methodology. Instead, what we do is choose the most appropriate methodology for the client’s requirements.

{audio:0:13:58} In a lot of cases, particularly in the UK, Western Europe and North America, in the case of representative research, that will be online research so we will conduct it via the internet. But in certain circumstances – and there are a number of good circumstances where this will be more appropriate – we will use telephone or face-to-face research, in order to conduct the surveys.

{audio:0:14:23} The principle of asking a representative sample to take part in a survey is the same whether it’s face-to-face, telephone or online. But the method to achieve that representative sample is very different and, indeed, can vary from survey to survey and from company to company, when it comes to the different methodologies. Active sampling, versus passive sampling, is very important in online research. When it comes to face-to-face research, it doesn’t really work that way. If you are knocking on somebody’s door, then that is, by definition, active sampling. Alternatively, if you’re just standing on the corner, in a shopping mall, and waiting for people to come to you, then that’s passive sampling. That type of research – just standing and waiting for people to come to you – is very, very rare in face-to-face research. Similarly, for telephone research, it’s very, very unusual for any reputable company to ask people to just phone in and give answers. The only people who do that are scammers.

{audio:0:15:33} When does it make sense to not use the proprietary panel that YouGov has versus you guys, for example, at Deltapoll or maybe Kantar, that use other panels?

{audio:0:15:51} In terms of advantages and disadvantages, it really depends on the specific survey that you are conducting. It may be, for instance, that you are interested in a lot of respondents who have not taken part in many surveys before; essentially, fresh respondents. In which case, there are various panel providers out there who have a high turnover of respondents. That may be more appropriate for the particular survey you are working on.

{audio:0:16:13} Alternatively, you may want people who have taken part in a lot of similar surveys previously so you have their tracking data. Therefore, the survey approach of YouGov may be more appropriate. It may be that you are operating in a country where your own proprietary panel, if you are YouGov, isn’t particularly large and then you would use a local panel provider to provide more information. It does vary on the specific circumstances. But the aim will always be to have the most representative sample that you can achieve.

{audio:0:16:49} Does that mean that YouGov can actually offer a lower cost of active sampling for a representative population than the likes of Kantar or those businesses that might not use purely online and purely their own panel?

{audio:0:17:06} When it comes to online research, at somewhere like YouGov, it is likely to be of a similar cost to online research at Kantar or Ipsos. But it’s very difficult to compare the precise costs because the specification changes. Let’s look at something like an omnibus survey which is the standardized, productized output that most research agencies offer. In the UK, most of those are conducted online and the price for an omnibus question, whether it’s at YouGov, Deltapoll or Kantar, is pretty much consistent. Deltapoll happens to be the cheaper; I just thought I’d throw that in there. But they are pretty close to one another.

{audio:0:17:52} What’s the price per question, in the market, on average?

{audio:0:17:57} At Deltapoll, prices start at £250 per question, plus VAT. At YouGov, I believe it is £300 per question, plus VAT and Kantar would be similar. You can see that the price for online research is very similar. If you’re talking about face-to-face research or telephone research, then the price is more expensive because, as a methodology, online research is, in most cases, like-for-like comparison, cheaper than the equivalent telephone and certainly cheaper than the equivalent face-to-face.

{audio:0:18:33} In terms of serving that customer research, let’s say £250 per question and a client has 10 questions, would there then be a small research team at YouGov or at Deltapoll that has to run the survey on the system, via the panel and collect that active sample?

{audio:0:18:54} It really depends on the specifics of the survey and what’s involved. At the most basic level – and the most basic level is good for a lot of companies and a lot of surveys that are conducted, but by no means all – you would work with a research team at YouGov. In the case of specialist subjects, such as things like media research and, certainly, political research, technology research, consumer research and public sector research, you would work with a subject specialist in that area, who might work for an entire team of political researchers, for instance. They would work with you to develop those 10 questions and field those questions accordingly. In some circumstances it may be that, actually, simply 10 questions is not enough and a series of additional questions need to be asked. As I say, it’s all about responding to the client’s requirements, but that’s the basic approach that is taken.

{audio:0:19:56} It seems as if YouGov’s margin for customer research is much higher than other competitors, such as Kantar or Nielsen. Is that purely because of the online element of YouGov?

{audio:0:20:08} Online research will have higher margins, will be cheaper, will be more cost effective than face-to-face and telephone research. For instance, if a large part of your business is face-to-face and/or telephone research, the margins on that will be lower. The reason for that is very simple. Online research requires far fewer people to be involved. If you think about a typical telephone survey, that will be conducted using a large number of people – 20, 30, 40 people – in a telephone center, in front of telephones, making those calls. Each one of those calls costs money. You have to make an awful lot of calls, in order to find one person who is willing to actually sit and answer all of the questions and you have to employ and pay the person who is making the calls and asking the questions, so there are a lot of costs associated with that.

{audio:0:21:03} A similar thing applies to face-to-face research. If you are conducting a survey and you’re sending out 10, 20, 30 people to walk up and down the streets, knocking on doors, that takes time and you are paying those people for their time. That means that the cost increases significantly, in a lot of cases.

{audio:0:21:21} Online research doesn’t have that fixed cost, so it’s able to pass on the savings to the client. Also, online research can benefit from a far greater degree of productized, standardized and harmonized offerings, in terms of research products that are available. Those products can be significantly cheaper because the survey only needs to be conducted once and the data collected once for it to then be sold again and again and again. Of course, you can do that with face-to-face and telephone research and a company like Kantar, with TGI, has made a very profitable business out of that, over the years. But you can do it at far greater scale with online research.

{audio:0:22:04} Have you seen the willingness of clients to engage more in online increase over the years versus offline methods?

{audio:0:22:13} Yes, of course. I’ve been doing this for 20 years and, at the very beginning, there was a great deal of hesitancy towards online research. That was something that YouGov had to deal with and I, personally, had to deal with, for really the first decade of our operations. For the first couple of years, people were very, very hesitant and it was difficult to convince many people at all to take part in online research. After five or six years, where we had grown as a company and we’d become successful, but we had also proved consistently that our surveys were accurate compared to real life examples, whether that is compared to General Election results or compared to, for instance, reality TV results, it consistently proved that the method was accurate. But even with that, we still had to battle against vested interest and entrenched opinions.

{audio:0:23:11} It was really only in the latter half of the 2000s that companies started, increasingly, to do more of their work online. We saw a movement by other companies and it got to the stage where, really, that was increasingly the only offer that was available in a lot of cases. You might want to still do something face-to-face, but when you saw that the cost was, in some cases, 10 times what it was to do online, you would certainly give online a chance.

{audio:0:23:43} There were a lot of things, more and more, that you couldn’t do via face-to-face and telephone that you could do online, so it became more attractive. I think I’m right in saying that, in 2010, there was a General Election where there was still a mix of online and offline surveys but, by 2014 and the European election that was conducted in that year, I believe that was the first time that all of the published polling for that election was conducted online. That was the sign that polling had really moved online, but it took 14 years for that to be achieved.

{audio:0:24:33} Even nowadays, you still get people saying, not everyone is on the internet. Yes, while not everyone is on the internet, far more people are on the internet than were back in previous years. It’s got to the stage now where those people who aren’t are very unusual, in many respects, and certainly not representative of the general population.

{audio:0:24:55} Just going back to the commercial client, like Pepsi or even one of the big TV brands or media agencies, if I’m choosing a market research partner, why would I choose YouGov for customer research, versus a bigger player like Kantar or Nielsen?

{audio:0:25:17} It depends entirely on what you want out of the research. It may be that you would choose a company like YouGov or, indeed, a company like Deltapoll, simply because it’s cheaper and you would get more for your money. You could get more respondents; you could ask more questions. Firstly, there is that consideration. Secondly, particularly with a company like Deltapoll, it might be that you are particularly interested in subject expertise. Rather than, in a large company, speaking to a research executive with, perhaps, 18 months experience, at a Deltapoll, you can speak to a research director with 18 years’ worth of experience. Specific subject experience can be hugely helpful in particular areas.

{audio:0:26:04} But also, experience of conducting online research, generally, is important. With a company like Deltapoll or YouGov, online research is not a string to our bow; it’s not something that we added later on. It is fundamental to who we are, as a company, and how we operate. We understand, better than anyone, the advantages and disadvantages, the things to look out for, the traps that could be lying in wait, when it comes to conducting online research. We know how to get truly representative samples, rather than just things that may look representative. All of this is hugely important.

{audio:0:26:45} Then you may want the huge amount of additional data that can be provided by a company like YouGov, or you may prefer their subscription offering to allow you to access data in a way that is separate from the traditional conducting research and getting results back. All of these things depend on the type of research that you are conducting and how you wish to conduct it. Ultimately, the answer to that question will depend on what type of research it is and what questions you are looking to answer.

{audio:0:27:15} How important is that syndicated data that comes behind the custom research for clients, typically?

{audio:0:27:24} Again, it varies hugely. To use the car analogy, that’s like saying, how important is having a convertible to clients?

{audio:0:27:35} Take a media agency or a big consumer company; the majority of clients of a company like YouGov are consumer companies, media agencies, brands. Do they care a lot either about the panel size or is it the syndicated data or is the cost? What do they really care about when they are choosing?

{audio:0:27:54} Some large agencies, some large media brands, some large consumer brands care an awful lot about the depth of data that is available. Others simply concern themselves with price. It’s not really possible to generalize because you will inevitably be surprised that companies that you thought would be more interested in a particular offering that a YouGov or Deltapoll has available might turn around and say, no, actually, all we are interested in is this. I can say that, generally speaking, those people with less money to spend – particularly things like PR companies – who are just looking to conduct one, two or three questions as part of a PR campaign, for a client, it’s unlikely that they are going to be interested in all the other bells and whistles and the huge treasure trove of data that’s available on respondents, via a YouGov. Instead, they are likely to just want the most basic offering, if they’re just wanting those two or three questions.

{audio:0:29:00} That doesn’t mean that if you’ve got significantly more to spend, you don’t still just want that. In a lot of cases, they do still just want that. It varies hugely and it’s very difficult to predict.

{audio:0:29:15} Let’s say that I commission custom research with you or YouGov, you conduct a survey, collect the data. Do I own that data or do you own the data and, when I combine it with the syndicated data, does that mean that everyone else can see the data you collected for my survey? How does that work?

{audio:0:29:36} It really depends on the specifics for the survey. In the case of a basic ad hoc survey or, indeed, the questions on an omnibus, if you are asking those questions and you’re the client receiving the data, then you own that data. You can do whatever you like with that data. If you want to publish it, then it’s entirely up to you how much you publish, when you publish, where you publish it. The only obligations that a YouGov or Deltapoll has are under the British Polling Council. Under the rules of the British Polling Council, all members are obliged to publish the data on their website – the full question wording and answer options and all of the full percentages – once and only once that data has been published elsewhere. That’s a reactive response to data that is available. That kind of publishing is important but, again, the client is the owner of the data.

{audio:0:30:46} When it comes to a syndicated product, then that data is collected by YouGov, internally, for its own purposes and so it owns that data. You can buy into that syndicated product and you can buy data from that but it will still be YouGov’s data and they can publish it in different ways. You get to see it and you can use it in whichever way you wish to use it, but what you can’t do is stop YouGov from using it themselves.

{audio:0:31:13} If I’m Pepsi and I collect some data points, on a survey, about my brand or a specific country, that would be my bespoke data and I could then amplify that with the syndicated data, but other clients from YouGov wouldn’t see my specific data points from that survey?

{audio:0:31:30} No; they wouldn’t see your data but how precisely the data was used and stored in the wider profiles depends on the specific terms and conditions of the survey. Essentially, the way to think about it is, it’s your data to do with what you wish.

{audio:0:31:48} What is the biggest challenge in scaling the custom research service, for a company like YouGov, in terms of rolling out different geographies, different client bases, different sectors?

{audio:0:32:09} I would say the main issue is panel availability. Panelists and respondents are like the fuel for the engine and, without that, you can’t do anything. If you’re looking to conduct research in a new country, for instance, and if you don’t have a panel in that country and if another panel provider doesn’t have access to panels in that country, that means you have to build your own panel. That can take time – a great deal of time in some cases – and it will certainly mean a lot of investment. It’s really only appropriate for very specific studies which will tend to be very large and very expensive and so without those panelists, it’s a problem.

{audio:0:33:00} Similarly, scaling up your operation to be able to fulfil the needs of clients is dependent on those panelists, wherever you operate. If you’ve only got a small panel in the UK, for instance, and you are conducting a lot of research, it may be that you need more panelists in order to fuel that research. Or it may be that the type of research you are doing requires more specialist panels in which case, again, you need larger access to more people, in order to scale up.

{audio:0:33:36} How much of a competitive advantage do you think the scale and level of engagement of the panel is, for YouGov?

{audio:0:33:49} There is no doubt that, in certain circumstances, it is a huge competitive advantage. But in others, it is largely meaningless and it depends on the client. There is no doubt that a lot of people are interested in the type of research that YouGov – not uniquely, but certainly overwhelmingly – can provide, that others cannot. There is clearly a lot of advantage there. But for all clients, is that offset, for instance, by the expertise that another company could bring in or the lower cost in a lot of cases? No. Yes, it’s a competitive advantage but I would see it more as added value, in a lot of cases, rather than being mission critical to a lot of projects.

{audio:0:34:39} How important do you think the Cube and the Crunch and the way that they can analyze that data is?

{audio:0:35:00} It depends on how you conceptualize these things. If you’re looking at the idea of collecting a lot of data, on panelists, and then being able to provide the opportunity for clients to analyze that themselves, online, that technical infrastructure is in no way unique. There are lots of companies in Western Europe, in Britain and in the United States that have data on panelists and allow you to go in and interrogate that data. The technical infrastructure underpinning that and the opportunities that provides to clients is, in no way, unique.

{audio:0:35:39} But what makes YouGov different and, certainly in the UK, what places it well ahead of other competitors in the same field, is the amount of data and the number of respondents that it holds. If you like, it’s not the fact that it has a Cube, it’s the size of that Cube. Conceptually, the Cube can be replicated and is replicated by lots of other companies. But the size of YouGov’s Cube is what makes the difference. In certain circumstances, but by no means all, that will, for some clients, be the winning approach.

{audio:0:36:19} Clearly, they have an advantage in the UK but what about in the US? How difficult is it for YouGov to scale their Cube or become competitive, versus the big players in the US?

{audio:0:36:29} They’re still growing in the US, in the way that they are in other countries. In a lot of cases, they are further ahead of competitors in the US than they are in other countries but, similarly, they are further ahead in Britain than they are in the US. It’s all about the competitive landscape.

{audio:0:36:48} In the US, there are lots more research agencies to be competing against and YouGov has not been operating the US for nearly as long as it’s been operating in the UK. Certainly, the building of Cube data has not been taking place in the same way in the US as it has in the UK. But it has been taking place, now, for a number of years. So yes, they do still have a sizeable Cube, it’s just that in the US there are other people with Cubes that are approaching the same size as well.

{audio:0:37:21} Then it becomes either a cost game or expertise or added value, beyond that?

{audio:0:37:26} Yes; then all those other things come into play. It’s worth pointing out that, in the UK, YouGov is extremely well-known. It’s not quite a household name but, certainly, lots and lots of people have heard of it as a result of, for instance, all of the work that it did around politics and reality TV in those early years of the 2000s and then, latterly, a whole host of consumer areas, where it’s become very well-known, as well. In the US, it’s not nearly as well-known. In fact, you’d probably struggle to find any ‘normal’ person in the US who had heard of YouGov, whereas in the UK, you can speak to people and most people have heard of it, if they work in any kind of related industry.

{audio:0:38:13} How would you look to break into the US? Is it scaling the Cube or making panelists more engaged, by paying them more?

{audio:0:38:26} It’s all of these things. It’s not one thing. At its core, is building up a panel; it doesn’t matter whether it is the US or any other country. When you move into a country, the first priority is to build that panel. That doesn’t mean that you just go for a crazy numbers grab. You want to build a panel that will then serve the client base that you have in place. You don’t want to recruit too many people so that people are never invited to take part in surveys. You don’t to recruit too few people so that people are asked to do surveys again and again and again. Instead, you want to strike the correct balance for the type of work that is coming in and then, most importantly, for longer term implications, you want to correctly structure that data so that it can be stored and interrogated, at an individual level. That means you can start building up that Cube and building up things like the way that panelists engage with the process; it’s all part of that process. It all feeds into fueling surveys via respondents registered to the panel.

{audio:0:39:39} Take Nielsen, for example, and their TV data; I think they have roughly 70% to 75% market share. I would assume that they have some kind of Cube or scaled panel, to collect data on what people are watching and streaming. How could you even break into the US and compete with Nielsen, which seems to be the currency of the TV ratings landscape?

{audio:0:40:03} For TV ratings – and the same with radio audiences in this country – it’s a more complicated issue there because, as you quite rightly say, their way of doing things is very much the established currency. When it comes to things as niche and specific as TV or radio audiences, everything will be based on that figure. For instance, advertising rates, advertising spots, all that sort of thing will be based on that data. If you change that data, by going to a new provider, the new provider may be more accurate and it may be a better reflection of the true figure, but if there is a big change in the data, that’s going to cause a lot of disruption around advertising rates and spots and so it makes it more difficult.

{audio:0:40:52} The inertia of the status quo, around an established currency like a Nielsen rating, or a RAJAR rating in this country, is enormous. Breaking into that area is more difficult. That doesn’t mean that you can’t do media research but what it is difficult to do is to replicate that currency. Instead, what you have to offer is something different and something better but in a different area.

{audio:0:41:19} Which areas do you think are the most susceptible to change, in the US? Let’s say TV ratings are on the more difficult end, because of the currency of Nielsen. Are there any areas that you would look to target, in the commercial landscape?

{audio:0:41:38} The obvious one is political research and I say this because of the aftermath of the recent Presidential election. In 2016, in the United States, the polls predicted, in a lot of cases, that Hillary Clinton would become President and that, of course, did not happen. In 2020, the polls pointed to a Joe Biden victory, but by a greater margin than he actually achieved. Of course, he did win and so, overall, the polls were correct. But in terms of their margin of error and their degree of accuracy which is what we are really interested in, as pollsters, we saw there that there was quite a big difference between reality and the actual results, compared to what the polling was showing.

{audio:0:42:43} Political polling in the US still, to this day, tends to be done, largely, through telephone research and so I think there is a big opportunity there for political research to embrace online polling. Having said that, YouGov has attempted that; I think 2004 was the first election that YouGov tried that. It’s been trying, for a number of years, to break into that area, and there are a lot of vested interests to do with the association between political consultants and pollsters and ad buyers, on particular campaigns, that you just don’t get in the UK. There is also a lot more political polling in the US because there are elections at State level and Federal level, but there are also elections for judges and coroners and school boards and all sorts of things. I think that is an area that is, and indeed will be, ripe for online moving in, in a greater number, but I think it will take time and it certainly won’t be easy.

{audio:0:43:56} That’s just because of the inertia and the relationships existing in the US that makes it difficult for a UK company to break in and offer some kind of new way to poll?

{audio:0:44:07} Not just for a UK company, though I think that does make the situation even more difficult, but indeed, for any American company that wanted to do that. There are well-established links. In the US, you have a Democrat pollster, a Republican pollster, who will work with specific campaigns or, even more often, specific candidates. Those kind of partnerships don’t really exist in this country in anything like the same way.

{audio:0:44:33} Is the concept of a Cube and the structuring of the data and integrating some kind of syndicated stream of data, with the custom research, not really unique to YouGov? Has it been adopted by all the major players and it really depends on the depth and engagement of your panel, in that region or geography?

{audio:0:44:58} The way to think about the Cube is as a three-dimensional shape and think about the way that data is arranged. If I had an animation that I could insert into the video at this point, it would make things easier, but you’ll just have to bear with me and try and visualize it. There are three dimensions to the Cube. Along the x-axis, goes the number of respondents. You have 100,000, 200,000, 300,000 respondents and each of those is along the x-axis.

{audio:0:45:30} Along the y-axis, you have the questions that they answer. In a typical survey of 1,000 people, you will have 1,000 people running across the bottom and they answer 10 questions each, so you would have 10 data points going up the y-axis. That is a two-dimensional space.

{audio:0:45:53} But then you have the z-axis, this third dimension, which is time. Imagine those 10 questions, for those 1,000 people, updated every day. Those 1,000 people are asked the same questions, every day, for 10 days. That means that the third axis, time, will mean that the two-dimensional space is replicated 10 times and you can see how things vary, at an individual level, across time. That’s the very basic three dimensions of the Cube – time, respondent number and number of questions.

{audio:0:46:27} Then all of the data that is collected via surveys, but also via lot of other products and systems that YouGov has in place, all of that goes into the Cube. So we’re not talking about 1,000 people, answering 10 questions; we’re talking about hundreds of thousands of people answering hundreds of thousands of questions, across time. That’s where the three dimensions of YouGov’s Cube comes from. It is the scale of those dimensions that is larger for a YouGov in this country than it is for a Kantar or equivalent.

{audio:0:47:01} Do the Kantars or Nielsens or equivalent have their own Cube in the US, of equivalent scale?

{audio:0:47:09} Yes; they will have variations of that. They almost certainly won’t call it a Cube, but they will have their own servers and their own databases that store all this information. It may not be as easy to interrogate as YouGov’s Cube; it may, in fact, be easier, depending on the way that the data is organized. But that data will be in there. It may be kept in lots of separate Cubes that have to be joined together. But the fundamental principle, if you’re doing online research, unless you are deleting all of the data the moment you get it and never speaking to the same people twice – which might conceivably be the case in some cases, but certainly isn’t the case for the Kantars of this world – if you are collecting that data then, inevitably, you will have your own Cube, even though you don’t call it that.

{audio:0:47:56} Obviously, Kantar and Nielsen and maybe the other players, have more telephone or offline research that could make it difficult to integrate it into a Cube?

{audio:0:48:08} Integrating telephone and face-to-face research, whilst not impossible is, in most cases, simply inefficient and the costs outweigh the benefits of doing that.

{audio:0:48:24} What do you think is the biggest challenge for YouGov to scale and leverage their Cube?

{audio:0:48:33} The biggest challenge that YouGov faces is the same challenge that all research agencies face and that is, increasingly – and when I say increasingly, I mean over the last 30 or 40 years – it has become more and more difficult to get people to take part in surveys. This has been true for telephone research, for a long time; it’s certainly been true of face-to-face research and, more and more, it’s difficult for online research, as well. Companies, like YouGov, like Deltapoll, like Kantar, will spend a large amount of money getting people to take part in their surveys, through various different means. But it is becoming more difficult all the time.

{audio:0:49:17} Back in the 1990s, telephone research had a response rate of 5%. That means, in practical terms, that you need to call 20 people in order for one person to respond. That was back in the 1990s. Fast forward to 2021 and we have a world that is dominated, not by the landlines of the 1990s, where you could guarantee that if someone answered they would be at home, but now it’s dominated by mobile phones. If you call someone and they have a caller ID and they are out and about and they don’t recognize the number, are they more likely to respond than they would be answering a landline at home? Almost certainly not. The response rates are even more difficult nowadays.

{audio:0:50:00} It applies to online research, as well. Getting people to sign up to panels; getting people to take part when they are on panels; getting people to stay on panels. These are all difficult questions that different companies address in different ways, but they certainly represent the biggest challenge for the research industry.

{audio:0:50:17} Would you expect that the rewards and the cost of engagement for panels to increase, over the next five to 10 years?

{audio:0:50:27} I imagine so, for rewards, but it’s difficult to know. What YouGov has shown consistently, at least up until now – and Deltapoll’s research backs this up – is that the greatest difference is between incentivizing someone and not incentivizing someone. The actual amount you incentivize people, in most circumstances, doesn’t make nearly as much of a difference. For instance, let’s say you are giving someone the equivalent of 50p for taking part in a survey. The fact that you are giving them the 50p is the big determinant of whether they will take part in the survey or not. If you put it up to 55p or 60p, it’s probably not going to make much difference at all. If you put it up to £1, that might make a difference, but then you are doubling your fixed costs for that survey. So the implications of such a large increase in incentives when you are conducting – literally, in the case of YouGov – millions of surveys a year, are enormous.

{audio:0:51:29} Are there any ways that they can try and reduce that cost of engaging the panel?

{audio:0:51:35} Different companies take different approaches. One way that people have tried to get respondents to engage in surveys is to offer a community feel to being on the panel and offering, for instance, additional prize draws or additional opportunities for people to take part; providing information back to the panelists about the work that they’ve done; giving them more control over their data; seeing other panelists and giving them the opportunity to interact with panelists. These are all ways of building up that community feel, in the hope that people will take part more often and be more engaged. But it’s by no means the solution.

{audio:0:52:35} In terms of how these businesses are evolving, it seems as if, effectively, you need to acquire new panelists, via online marketing, encourage and reward them to engage them in surveys to collect data and then package and monetize that data, not only on the syndicated side of things, but also for custom research for clients. Do you think these businesses are almost evolving from purely a market research business, more towards a data services and data platform, where you can spin off new products and use the Cube to monetize new products for clients?

{audio:0:53:19} For a number of years now, YouGov has presented itself as a data company – that’s how it stylizes itself – in the same way that, at Deltapoll, we style ourselves as a public opinion consultancy. In both cases, we do that because it is part of the marketing; it is how we want our clients to see us. It is putting our strengths forward and trying to focus on our competitive advantage. Of course, data companies, particularly the FANG’s of this world – Facebook, Amazon, Apple, Netflix and Google – those companies have really made a huge virtue, and been extremely profitable as a result of presenting their strengths in terms of data.

{audio:0:54:02} So it’s not surprising that a company like YouGov, which has aspirations for that sort of world domination, wants to present itself in the same way. But it’s certainly true that the days of simply conducting ad hoc research, on a one-off basis or, at most, in terms of tracking studies for clients, that is, in a lot of cases – but particularly for the YouGovs of this world – well behind us, as an industry. Increasingly, it’s about building in additional data on top of simply doing surveys and the strength of a company being driven, at least in part, from its ability to interrogate and analyze that great amount of data that it has.

{audio:0:54:48} That’s where the industry is changing and the people within research agencies who are most valued are no longer the highly specialized subject specialists and experts, around a particular area. It’s around the data scientists who can wrangle data, as the terms is sometimes used, and know their Hadoop Clusters from their multivariate regressions. Those are the people that, increasingly, are adding the most value to businesses, be they YouGov or Kantar.

YouGov & Online Market Research

Founding Director at YouGov

inpractise.com/articles/yougov-market-research

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Executive Bio

Joe Twyman

Founding Director at YouGov

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YouGov & Online Market Research(January 12, 2021)

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