Harris Interactive, Inc. (NASDAQ: HPOL) CEO Interview

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Harris Interactive, Inc
(NASDAQ: HPOL)
Kimberly Till, CEO
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[display_podcast]
Harris Interactive Inc. provides market research and polling services, which include ad-hoc or customized qualitative and quantitative research, service bureau research (conducted for other market research firms) and long-term tracking studies. The products and services provided by the Company include custom research, tracking study research and service bureau research. The Company conducts a portion of its market research using online data collection. It also conducts computer-assisted telephone interviewing in telephone data collection centers in the United Kingdom, Canada, Hong Kong and Singapore.

TRANSCRIPT

WSR: Can you to us about the ASL?

Kimberly Till: Advanced Strategy Lab is a qualitative technique. In market research, you either have quantitative studies that you do or qualitative, where you are interviewing a smaller number of people. And this one really leverages cutting-edge technology. So, instead of running a focus group, where you had everybody in a room, and member or the clients used to be behind the mirror and would look in as the people were talking about their products or their advertising, this technique leverages computers. So, you can either be sitting in the same room or be anywhere in the world, and everybody responds and post up on a bulletin board. So, you protect kind of the views of what everybody is saying because they all just appear on the bulletin board, but it’s a much, much more advanced way to do brainstorming and to collect people’s views. So we’re really excited. We’ve had it in the US, we’ve had it in Europe and we’re just now rolling it out in Asia.

WSR: Talk to us about some of your — the company’s main products and services, and where we may be able to find them?

Kimberly Till: We’re one of the largest global market research companies. So, that means that you do individual market research studies for largely the Fortune 500 type of clients. So, any kind of consumer or business-to-business research, like I said either quantitative or qualitative, we would do on a global basis.

And one of the interesting things about Harris is when the whole Internet kind of broke in the US, we were one of the first firms to leverage the Internet to do the surveying. It used to be they went door-to-door and knocked on people’s doors and then they would call people on the telephone and oftentimes catch them at dinnertime or whatever. So, we were one of the pioneers of inviting people to join our panel, filling out the survey responses on their own time and then sending those back to us. So, that was a huge leap forward in market research.

WSR: Talk about some of the emerging trends right now in market research, and how well positioned is Harris Interactive to capitalize on them?

Kimberly Till: One of the major issues in market research is how you communicate with consumers and business respondents, as what we call them. And it is this issue that as the marketplace has changed and a lot of people don’t even have a landline anymore in their home, so if you’re trying to reach a younger demographic to get their views, you would better reach them via Internet or cell phone. So, one of the new trends is developing new platforms for interviewing people. As most people know, when you’ve been on the web, sometime there will be a pop-up survey, where they’re trying to get a spontaneous reaction to a smaller number of questions. But, the area that we think is extremely interesting is the whole cell phone PDA surveying opportunity, and one of the wrinkles on that is adding in the GPS component, so not only would your respondent be answering the questions but you could also know where they are. So, for example, if they had just walked out of a McDonald’s food store or they had walked out of a Wal-Mart or a hotel chain, you would be able to ask them specific questions related to the experience they had just had.

WSR: What would you say makes the company unique from — number one, who are your key competitors and what makes you unique from some of the other players in your sector?

Kimberly Till: We really view as the key competitors the other global custom market research firms. So it would be companies like WPP, which owns Millward Brown and TNS Ipsos, which is a French headquartered company, Synovate — the other large custom market research companies. And I think there are a couple of things that differentiate Harris. I mean first and foremost is our capability to leverage technology. Leveraging it for new methodologies like I was just mentioning Internet, cell phone adding in GPS, but also leveraging technology on the internal workings of the company because market research is one of those very mature industries, highly fragmented with a lot of consolidation, you’ve ended up with a handful of players that are really rollups of rollups of a number of different smaller players and they end up not having highly automated workflow. So, one of the innovations that we have is leveraging technology to completely streamline and automate to the maximum extent possible the workflow. And that gives you couple of different advantages; it’s higher quality because a lot of the work is automated, it’s lower cost and it’s a quicker turnaround.

WSR: You recently took over as CEO about a year back. So, can you walk us through your background and experience, as well as that of some of the key management team over at Harris?

Kimberly Till: My background is largely media and entertainment. I was with Disney in Europe and was Head of Business Planning, which is the strategy function for the Euro Disney turnaround, which was a lot fun doing that in the European market. And then I worked with Howard Stringer at Sony. At that time, he was running the Sony US businesses; so Sony Music, Pictures and Electronics, and I ran the Strategic Planning and Marketing. Also was co-number two of AOL International, where we rolled out the AOL service in 16 countries outside of the US. And then, right before coming into market research, I ran Microsoft’s Media & Entertainment vertical worldwide in the communications sector, and we basically leveraged Microsoft technology for the large media and entertainment companies worldwide.

One of the things that have been a part of our strategy here at Harris is to leverage best practices and techniques and consumer focus that we learned in places like media and entertainment and technology, and bring that into the market research industry. And that’s a fundamental part of our strategy. Because that is our strategy, I’ve also recruited a number of people that are outside of market research. For example, Enzo Micali now runs our IT Operations and Panel. He was CIO of 1-800-FLOWERS. We’ve recruited others — a lot of other people that bring both outside industry experience as well as inside.

WSR: What are some of the specific goals and milestones that the management team hopes to accomplish here over the course of the next year?

Kimberly Till: I think the key thing is if you look at the market research industry, particularly in the US market, given the severe recession that we had, market research, marketing, all of those expenditures are discretionary. So, there is a huge contraction in the market research market in this past year. So, a very proactive activity that we did quite a number of months ago was to realign our cost base. We took quite a bit of costs out of the US business. And since that time, we’ve been really focusing on the revenue rebuild; because one you’ve got that really proper cost structure, the key is rebuilding the revenue. And we’ve been pleased with the results that we’re starting to get because I’m seeing clients and again, particularly the Fortune 500, starting to free up budgets again, starting to re-engage with market research and collecting the market information. So that’s — a big focus for us is growing the topline as well as the bottom line.

WSR: In terms of investors, do you believe that company’s financial — investment story and upside potential are completely understood and appreciated by the financial community?

Kimberly Till: We’ve definitely been trying to communicate our story in the quarterly calls. But, if you look at the financials of the company and look at the stock price, you can see that there is still tremendous upside. As I said, I think we have a very, very strong strategy, one that leverages a deeper insight for our customers, it leverages technology in a number of different ways. We have a global play. I just returned from China. That is a huge developing market research market. And again, we hope to exploit our advantage of being the technology innovator to introduce more differentiated, more cutting edge products into some of the Asian markets, which are faster growing. So I think — and also, we’ve recruited incredible talent in the last year. So, I think if you put all of that together, strong strategy, strong talent to execute on that, highly differentiated and value-oriented, that should deliver great results on the topline and the bottom line in the future.

WSR: What do you think are some of the key reasons that investors should consider the company as a good long-term investment opportunity?

Kimberly Till: One of the best things Harris has going for it is the Harris brand name. As you know, we run the Harris Poll, it’s one of the longest standing public opinion polls, started way back with Lou Harris in John F. Kennedy political elections. So we have –.

WSR: I saw on College Football.

Kimberly Till: Exactly. If you’re a sports fan, you would know it from the College Football Poll, and we’re taking that plus this new technology spin, which has always been the heritage of Harris Interactive and moving it to new platform. And then, I think the global expansion because if you look at a market that’s somewhat mature like the US, having a company that’s going to be taking advantage of the rapidly growing large markets on an international basis is attractive as well.

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