Co-Creation Consolidation – Communispace and Promise CEOs chat with IX

On November 28, 2012, Diversified Agency Services (DAS) announced the acquisition of Promise Corporation, a highly regarded private online community provider and co-creation consultancy based in London. So what’s the big deal? It’s this: DAS also owns Communispace, the Boston-based 800 lb. gorilla in the private online community (aka “MROC”) market. Oh, and DAS is owned by Omnicom, one of the so-called “big four” agency companies.

I had the opportunity to interview Communispace CEO Diane Hessan and Promise CEO Charles Trevail just one day after the acquisition announcement, and they shared some interesting perspectives on why the purchase made sense, how their clients will benefit, and the importance of co-creation as an innovation strategy.

If you don’t yet know Communispace, you should. Communispace brought innovation to the world of market research by developing the concept of an online community where brands could privately interact with consumers (either a broad group or a targeted segment). The goal wasn’t to simply use the web to obtain market research faster and cheaper: rather, it was to create a continuous connection to a brand’s consumers that can be leveraged in unique and creative ways. In effect, Communispace puts a brand’s consumers on speed dial.

Communispace isn’t alone in this market, but it got a head start and has developed a recognizable brand and sterling reputation as a full-service, managed community provider that delivers game-changing insights. As it turns out, that’s not enough, because corporations struggle with translating insights into innovation. CEO Diane Hessan noted that Communispace’s clients “are getting insights, but the world is so crazy that the insights are just sitting there. People need help. They’re saying, ‘Ok this is really interesting, or this is potentially breakthrough. Now what? How do I capture the imagination of our senior executives? How do I activate the insights? How do I take what we’ve learned from our consumers and bring it all to life in my organization, and do that with impact and speed.'”

Enter Promise. CEO Charles Trevail built an agency that started as an innovation consultancy and only added online capability in the form of private communities in the past 4-5 years. While the common ground shared by the two firms is important, Promise’s strength lies in its co-creation capabilities and its goal for infusing co-creation into corporations. According to Ms. Hessan,

“We saw Promise’s co-creation capability as a hugely powerful vehicle for taking insights and turning them into impacts.”

Promise does this via in-person co-creation engagements that take place with both internal and external stakeholders, sometimes over the course of multiple days. Promise also gets involved in the implementation of the new ideas.

Mr. Trevail was quick to point out that “there is no single way that our client assignments work. Sometimes it can start with a large intervention, a live intervention. Sometimes it can start with an online community and we run the larger live interventions as part of that process.” When it comes to putting the two firms together, he believes they will take an agile approach by “weaving these capabilities in ways that make the most sense for each of our clients.”

Of course, there are other benefits to the acquisition as well. Ms. Hessan stated that adding Promise allows Communispace to quadruple its presence in Europe, where the company had already been operating for several years. According to Mr. Trevail, Promise, although successful in Europe, lacked the capacity to globalize the company. That’s an increasingly important point, particularly when working with some of the most well-known brands on the planet who are now understanding that their global customers can have very different needs based on geography (among other things).

Ms. Hessan also has seen her company engaging more with Chief Innovation Officers, individuals that have been tasked with the goal of accelerating innovation. She sees the combined Communispace/Promise team as being able to create something really powerful for that audience. That’s an interesting perspective, in my view. Whether or not a corporation actually bestows a formal Chief Innovation Officer title on one person, the idea that a company would benefit from accelerated innovation is beyond reproach. How to enable that individual and how to devote resources to that effort is where companies often stumble.

While Communispace and Promise believe in the notion of building and sustaining a community for ongoing interaction with consumers, companies do have the option of using private communities (and co-creation in general) to target specific issues on a short-term basis. The argument from Communispace and Promise, though, is this: once you’ve developed a way to directly access the voice of the customer, why on earth would you want to dismantle it? Cost certainly plays a role here, but companies with private communities can often realize a net cost savings (as compared to funds spent on other market research projects) or avert disaster with a poorly designed product or advertising campaign, thus saving countless dollars.

But aren’t these just for large brands with deep pockets? Sort of. According to Ms. Hessan, everybody can benefit from such a community, and lately Communispace has been signing relatively small companies (those with about $100 million in sales). But she acknowledged that the smallest companies with fewer products probably don’t need a full-fledged managed private community. But that doesn’t mean that those companies can’t or shouldn’t co-create: they can just do it with other tools, such as a customer advisory board.

What it means:

Communispace and Promise have taken the first step toward consolidation in this developing yet crowded co-creation market. As co-creation emerges as a respected innovation discipline, this acquisition will spur further consolidation in the market, so that vendors can provide a full suite of co-creation engagements and services to meet their customer’s innovation needs. Mr. Trevail correctly noted vendors’ differing philosophies around co-creation and who best to interact with to deliver insights and results (regular customers, prosumers, experts, etc.). While that might prevent some partnerships from taking place, that doesn’t alter the fact that there are different platforms and methods for engaging with these external parties for purposes of co-creation, and that companies and brands will benefit by having access to all types of co-creation engagements. Consolidation will allow a single vendor to satisfy all of their clients’ co-creation needs. But it’ll take some time to get there. As noted by Mr. Trevail, “Is there an opportunity to create a much larger co-creation/communities business around the world, whether organically or with partners? Absolutely. I think we’re about 10 years into a 50 year change here, in my view.”

image credit: communispace.com; promisecommunities.com

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Doug Williams is the new Chief Research Officer for Innovation Excellence. A former Forrester Research Analyst, he launched and led Forrester’s innovation and co-creation practice for product strategy professionals. Doug is the highly-rated author of 36 Forrester Research reports on innovation, open innovation, and co-creation, and is the developer and primary author of Forrester’s Open Innovation playbook. You can follow Doug on Twitter: @DougWilliamsMHD.