Who Are You? How GeoPoll Does Market Research In Africa

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Written by Dana Sanchez

Denver-based market research company GeoPoll figured out the best way to survey hard-to-reach African populations — not with the traditional pen and paper, but with text messages and SMS.

Text and SMS are cheaper, faster, and the mobile technology helps GeoPoll’s customers learn anything from consumer preferences to aid needs.

AFKInsider spoke with Steve Gutterman, CEO of GeoPoll, about how GeoPoll does market research in Africa. Its customers include the U.N. World Food Program, USAID, World Bank, African Development Bank, soft drink and consumer electronics firms, and other market research firms.

And who is GeoPoll competing with? Companies with names far better known than GeoPoll’s, including Nielsen, Ipsos and GFK, the world’s No. 1, No. 3 and No. 4-largest market research organisations.

Mobile Accord, the parent company of GeoPoll, is also the company behind mGive, which handles 80 percent of text-based donations.

GeoPoll’s first African survey was conducted in 2011 in the Democratic Republic of Congo for World Bank.

“(World Bank) came to us and said it was going to cost them $3.5 million to survey 1,500 people. That was crazy,” Gutterman said. “In the DRC, you can have two villages separated by a river and you can’t get from A to B. The bank said, ‘Can you do better?’ We said ‘Yes.'”

GeoPoll sent a survey to 350,000 people in DRC on a single day at a cost of about $10 per respondent, which is significantly lower than average, Gutterman said — the average price in the industry begins at around $50 per respondent.

GeoPoll respondents may not have landlines, Internet access or even permanent addresses, but they do have cell phones, Gutterman said. GeoPoll uses a multimodal platform that he says is flexible, and is key to its success.

The company now has 100 million people in its database, and expects to have 400 million by the end of 2014.

“That will make us one of the larger repositories for hard-to-understand people,” Gutterman said. “We can send out polls in every country except North Korea.”

There’s an incredible need for market information by governments, banks, organizations that want to evaluate the general conditions of their citizens and businesses that want
to understand markets, Gutterman said. “When we looked in total at the money being spent on market information, it’s well into the billions. But a highly inefficient set of market participants are using pen and paper-style surveys like in the 1950s — there are real limitations to that.”

In Africa there’s about 10-to-15 percent Internet penetration, 5-to-10-percent permanent home ownership and 75 percent cell phone penetration, Gutterman said, “So cell phones are the de facto form of infrastructure.”

GeoPoll conducted its first survey in the DRC with cell phones. The company spent the next two years honing its platform, which can connect to people with SMS, voice and Internet.

“What we’ve found however is that it doesnt make sense to do Internet polls in areas with low Internet penetration,” Gutterman said. “By reaching out with a variety of channels but partly SMS, we are getting a cohort of respondents more representative of the population than any of our competitors were previously able to reach.”

GeoPoll works closely with telecommunications providers and claims to produce more text messages than anyone else. But potential respondents can always say “no,” Gutterman said.

“We work to identify people interested in joining our survey,” Gutterman said. “We’re very cognizant of privacy laws and not harassing people. Sometimes we pay (respondents). In all cases we ask people if they’d like to opt in. Some customers like to be paid by airtime credit. Others, like the U.N., prefer we don’t pay. We apply European Union privacy standards in everything we do, even in countries where the regulations fall way short of that standard. E.U. privacy standards for marketing on mobile are more stringent than the U.S.”

On a recent visit to Nigeria, Ghana and South Africa, Gutterman said he received validation that “there’s a real need for what we do.”

“It’s exciting,” he said. “I dont know if there’s any place in the world that has quite so large a disjunction between the economic activity on one hand and lack of customer information on the other. Its astounding how unanimously we hear, ‘God we wish we knew more about the people in X — and we just don’t.'”

Gutterman earned a law degree from Columbia University and a bachelor of arts from Tufts. “I only practiced law for three months,” he said. “I like building things and law didn’t let me do that as directly.”

His experience includes six years at E*TRADE Financial, where he served as chief operating officer of E*TRADE Bank, a $35 billion federally regulated thrift. From 2005 to 2011, Gutterman was president of MBH Enterprises, a holding company that buys controlling interest in financial service companies. He serves on the board of the State of Colorado Venture Capital Authority at the appointment of Gov. Bill Ritter. He was also a founder of Solera National Bank, a nationally-chartered bank that focuses on serving the needs of underserved retail banking customers.

GeoPoll has 52 employees worldwide with offices in Washington, D.C. and Nairobi. Gutterman expects to add staff in Lagos, Nigeria, and Johannesburg, South Africa.

The company has raised about $11 million in financing. James Eberhard — the first person to do mobile ring tones, according to Gutterman — founded the company. “I hesitate to use the word genius, but he really is a visionary,” Gutterman said. “Were a tightly knit team here and having Jimmy and his uncanny ability to understand what’s next in the mobile market has been a real advantage for us.”

At GeoPoll, Gutterman said, “what inspires all of us here – we see an enormous opportunity to help transform lives on the ground, to provide some momentum to economies, to increase the level of understanding of countries we’re operating in in a way that’s profitable for all our shareholders.”

Doing surveys in South Africa

South Africa is different from any other country on the continent. It has a much more advanced infrastructure so its easier to take surveys there, Gutterman said. All the large market research companies — Nielsen, Gallup — do an OK job in South Africa, he said.

“But even in a country like South Africa there are large areas where its hard to get into and even companies that have a presence there are struggling.”

Who’s doing well gathering information in the rest of Africa?

“Nobody,” Gutterman said. “Nigeria is a burgeoning economy and I would say it’s an economic force right now. In 20 years Lagos will be mentioned with other alpha cities around the world. But from an infrastructure standpoint, it’s not an easy place to gather information, and that’s in Lagos. If you move outside (Lagos) it becomes even more difficult. Nigeria (is like at least) two different countries split by religion. It’s hard to get information. No-one’s doing a great job. You’d expect there’d be more advanced methods of information-gathering.

“Kenya, Uganda, Rwanda — not great information gathering. Theres’ a real need for what we do.”

What is GeoPoll doing differently from its competition?

“We are actually reaching people because we are…communicating with them really in the only practical way of communicating with people in rural areas disconnected from urban centers.

“Across Africa there’s about 75-percent cell phone penetration. In sub-Saharan Africa, cell phones are often one of the first purchases.

“We’re not talking about iPhone 5. We’re talking about much cheaper flip phones but they can still respond to a poll.

“In addition to paying (respondents) with airtime credit, we zero-rate the message: we pay the telecoms for them.”

If mobile customers in Africa say they have no option to opt out of receiving unsolicited text requests to respond to a poll they’re wrong, Gutterman said, adding, “I can’t comment on the whole industry.”

(GeoPoll) is competing in Africa with traditional market research firms like Nielsen, GFK, iPsos, and local polling companies that do the same thing.

All are still using pen and paper technology, Gutterman said. A handful offer Internet-based polling. “It’s cheaper and faster than traditional methods but produces a skewed sample,” he said.

The future of market research in developing countries

“We have a window of opportunity and the market will eventually move this way,” Gutterberg said. “I think the pace of change in developing countries is often slower than we might have originally thought. I remember 18 years ago I had a business school professor who said, ‘They’ve gotta sell Blockbuster (Video) – it’s doomed.’ He was right but he was 16 years early.

“I think in time there will be more Internet penetration in the developing world and traditional survey companies will adopt alternate forms of reaching people.

“These markets we’re talking about and the demand for information is so vast that there is going to be a need for multiple participants.”