As ICT vendors begin to focus more on the increasing proportion of enterprise technology spending which is not controlled by the CIO, Forrester Research has been quietly building out a program targeting the “new breed” of budget-owners in the Asia/Pacific region. Not surprisingly, China figures prominently.
While Forrester’s focus on delivering digital marketing & strategy services to line-of-business technology buyers in North America and Europe is well-known and now well-established, it has primarily concentrated on its mainstream technology services in APJ, particularly following the acquisition of Springboard Research in May 2011.
Although a long way behind Gartner, and despite only having a small number of buy-side analysts located in APJ, Forrester has been relatively successful in building up a client base among the IT departments of banks, retailers, government departments, FMCG suppliers and other large enterprises.
With the Springboard acquisition consolidated, Forrester is now eyeing the opportunity to tap into the wallets of large enterprises across the Asia/Pacific region that need help developing digital marketing strategies which will allow those organisations to more effectively sell their products & services to the world’s largest consumer markets.
Lead by a 12-year Forrester veteran, vice president Andrew Stockwell, the firm is well down the path of tailoring its services to meet the different needs of sales & marketing organisations in APJ. Stockwell relocated to Beijing in March 2012, a location which was chosen because “it’s the hardest place to find & recruit talent, it’s the hardest place to navigate the business, and it offers the biggest growth opportunity.”
“We did an analysis of our own research – what markets have the highest online population, the greatest levels of disposable income, the highest adoption of technology, the greatest opportunity for our clients? China came out number one in almost every one of these categories,” he said.
While cagey about revealing too much detail about headcount, Stockwell is actively recruiting local analysts, initially focusing on China and Australia – firstly to replace e-business analyst Steven Noble (no relation) who left to kick off his own tech start-up a few months ago, and potentially another Australian analyst. Singapore and India are also likely locations for marketing & strategy analysts, while Stockwell can also draw on existing resources in the US.
“We have been collecting data from consumers in APJ since 2007 – covering South Korea, Japan, China, Australia and India,” said Stockwell. “We have a good base of understanding about the customer, but the research we have been writing has been out of West, about the East, so we want to get a lot more localised about our strategy.”
While Stockwell doesn’t see Forrester replicating Ovum’s recent move to begin translating selected global research into Chinese, he does see local language capability as a key skill, with enquiries and consulting to be delivered by local staff to provide context around English research content.
“We can take a piece of research which has been written globally, spin it and add customer case studies and examples about what that means locally, and translate that piece if necessary,” he said.
“It goes back to who we are trying to serve – at the level we’re targeting, these people generally can read English .… Our focus in the short term is not selling to the local Chinese companies, but on developing the content, the insight, the data, the analysis and the consulting that we can use to help the local representatives of multinational companies, or the clients who are sitting in North America or Europe or Australia or Singapore who don’t know how to get into China.”
From one perspective, Forrester’s strategy is not that different to that of firms such as Gartner and IDC, which initially built their China – and some other APJ country – operations to support the market entry strategies of multinational IT vendors. Those operations have since broadened significantly, with Gartner generating growing revenue from the IT organisations of Chinese companies and IDC now boasting a full complement of analysts across all of its Insights vertical market research practices.
That Forrester will gain initial success in China with companies with which it already does business in North America and Europe is undoubted – it has a global reputation, if a more limited global presence. The number of prospects is considerable, but ultimately Forrester will need to turn its attention to local companies in China and other country markets, a long-term objective which Stockwell acknowledged.
It will also have to deepen its local research, and that is much closer on the horizon. Forrester currently surveys about 10,000 consumers in the top 10 to 12 cities in China (the largest cities known as Tier 1 & 2), but Stockwell wants to extend that research to Tiers 3 through 6 – there are more than 160 cities in China with populations of more than one million, which is why companies selling to consumers are so eager to invest in China. There are also plans to extend the consumer research into other countries in the region, including Indonesia – which has the third-largest population in the region after China & India, and a growing middle class.
That these companies are also buying technology outside of the conventional IT frameworks is also without doubt. Non-IT buyers have become a significant focus for vendors such as IBM and SAP over the past couple of years, a period which has also seen the emergence of specialist analyst firms focused on the digital marketing space, such as Altimeter and Constellation, which recently appointed Gavin Heaton to lead digital marketing research from Australia.
“Companies are now seeking competitive advantage from new areas, which means they need a better understanding of the customer, to provide a better customer experience. So we want to focus on where the decisions are being made, where the budgets are being held,” said Stockwell.
“We have been saying for a long time that you don’t want to choose your technology, then define your objectives. You figure out the people you want to target, then determine your business objectives, then work out your strategy, and then decide on the technology.”
That all of the key current technology trends – cloud, big data, mobility & social media – play directly to the marketing & strategy space adds another layer of interest around this gradual shift away from IT departments being the owners of all technology spending, and how analyst firms are dealing with that shift.
It is still early days, but it will be interesting to watch & see if Forrester’s foray is successful. And just as interesting to see who else follows…. What do you think?