Social Market Lessons in J.D. Power's Analytics Deals

J.D. Power and Associates, a marketing-information provider, this week announced "agreements with social-media technology companies Clarabridge and NetBase to further expand and enhance its capabilities in digital research," according to a company press release. Yet the company, a business unit of the McGraw-Hill Companies, had acquired social-analytics start-up Umbria just 30 months ago for pretty much the same purpose, for "voice-of-the-customer based studies on quality and customer satisfaction," including from online communities. This week's announcement, then, is a significant change in product-development strategy for JDPA, and it illustrates new directions for the larger social-analytics/VOC market.NetBase and Clarabridge are very capable companies. Both apply text analytics technologies, including advanced sentiment analysis, to online sources and, in the case of Clarabridge, to enterprise feedback from surveys and contact centers. NetBase creates domain-specific knowledgebases -- for health, consumer, and scientific and technical information -- and provides information-access and analysis tools. Clarabridge sells exploratory data-analysis tools and services adapted for customer-experience applications and social-CRM, especially for travel and hospitality, online commerce, and a variety of other B2C domains.

If JDPA were starting from scratch, it would make eminent sense to contract with companies like NetBase and Clarabridge. So what do the deals mean for the former-Umbria staff, technology, and intellectual property? According to Bill Tuohig, senior director at JDPA's Web Intelligence Research Group, JDPA will retain the best of the Umbria technology, with specifics yet to be decided.

According to Tuohig, "Umbria has a strong core base from a technical perspective, but to try to keep pace [with evolving market requirements] is probably too much for any one company," particularly for a company that focuses, as JDPA does, on information services and not on technology solutions. Tuohig says the new platform direction "gives us a better opportunity to tie social media to other forms of voice-of-the-customer analysis... We have IP from Umbria and now we have other capabilities."

JDPA has had the technical talent; the decision was rooted in business realities. That JDPA Senior Director Nicolas Nicolov, former Umbria chief scientist, reportedly earlier this month left JDPA for Microsoft suggests that the Umbria technology will not henceforth significantly evolve.

As for the choice of both Clarabridge and NetBase, an executive at a competing text analytics vendor, whom I asked for his reaction, did wonder about technology short-comings that led to contracts with 'two, similar vendors' and noted, 'it will be tough for JDPA to work effectively with two vendors that openly compete with one another.' Complementary or competing, his observation rings true, then there's the added, very significant complication that JDPA will likely need to rework interfaces, data acquisition and preparation processes, and support as part of transition from Umbria based capabilites.

Yet I believe JDPA's basic decision, to go outside, was sound, and as Bill Tuohig says "it's clear there's no one platform that can do it all," that can comprehensively cover the spectrum of voice-of-the-customer, social/media analysis needs.

Tuohig cited as JDPA choice criteria the vendors' abilities to crawl and assimilate Web/social information and their ease of use. Other platforms are better adapted to other business domains. J.D. Power and Associates is a McGraw-Hill company; other McGraw-Hill units also work with external text-technology vendors, for example with TEMIS for the media and publishing and life-sciences applications that are TEMIS strengths.

The go-outside lesson has been learned by other social/scientific/media-information providers. I know of two firms that are currently doing just that, both very prominent agencies, one of which offers social/media monitoring and measurement tools that are very well know but which, in my opinion, have not kept up with technology advances. The other is a consulting prospect that is looking to build from initial success with narrowly focused social-media analysis tools into a broader business solutions. Taking this route, they are emulating other agencies such as Edelman StrategyOne that are benefiting from their decisions to go outside for analytical technologies in order to focus their efforts on delivering business value to customers. (Natasha Fogel, StrategyOne EVP, Media Analytics & Measurement, addressed this point as a panelist at the Smart Content conference earlier this week.)

They recognize a reality. In the words of Clarabridge CEO Sid Banerjee, "I think if you scrape much below the surface, you'll find that MANY of the social media companies would admit that they are not doing 'sentiment' as well as they'd like. Also, many struggle with the quality of the feed, how to separate trash from real content," and clearly also, I believe, with analytics and information delivery.

So the path toward competitive social-media analytics becomes clearer. The market is speaking: Agencies and information firms will rely on specialized technology platform vendors for their build-out of domain adapted social/VOC services. These specialized platforms are most efficiently developed by best-of-category providers. Those providers can effectively leverage focused technical skills and develop-once/sell-many-times economies to deliver capabilities beyond the reach of in-house dev teams. J.D. Power has made a wise decision that will allow them to best respond to customer needs, showing the way forward for the larger social-analytics/VOC market.Marketing-information provider J.D. Power this week announced agreements with social-media technology companies Clarabridge and NetBase, yet the company had acquired social-analytics start-up Umbria just 30 months ago for pretty much the same need. This week's announcement illustrates new directions for the larger social/voice-of-the-customer analytics market.