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The Honomichl Global 25: Only A Part Of The MR Story

MRWeb reported today about the positive news contained within the Honomichl Report about the recovery of the Global 25, and as I pointed out previously the story is mixed at best, with some true organic growth but most recovering to 2009 levels, and a few declining further. I love the work that Jack and Larry do, but I am reminded once again that this is only a snapshot of a segment of the MR space and although helpful, it is incomplete.

MRWeb reported today on the positive news contained within the Honomichl Report about the recovery of the Global 25, and as I pointed out previously the story is mixed at best, with some true organic growth but most recovering to 2009 levels, and a few declining further. I love the work that Jack and Larry do, but I am reminded once again that this is only a snapshot of a segment of the MR space and although helpful, it is incomplete.  We’ll come back to that point in a minute, but first here is the MRWeb article on the results:

The world’s 25 largest research firms had revenues of $18.8 billion in 2010, up 4.9% on the previous ‘dismal’ year – a ‘very healthy turnaround’ according to industry authority Jack Honomichl. However, ‘real’ revenues were not quite back to their 2008 levels, and some companies continued to shrink.

Last September, Honomichl reported that the Top 25 had experienced a ‘dismal’ year’, with total revenues down by 3.1% to $17.4bn. This year’s rebound in revenue terms was matched by a 4.4% rise in headcount to 107,803 employees.

Taking into account inflation rates across the US, Japan and the 15 EU countries in Western Europe, overall revenues increased by 3.2%, having fallen by 4.5% in 2009. ‘Real’ revenue therefore remained below pre-recession levels, but should pass them this year.

Out of the total 25 firms included in the report, 15 are US-based, while the other 10 are headquartered in Japan (3), the UK (3), France (2), Brazil and Germany (1 apiece).

Honomichl sums up the overall figures: ‘…while the global research industry’s 2010 revenue growth was healthy – and most welcome – it was not enough to recover the downside of 2009. And, relatively, firms owned or managed in the US were laggards.’

As usual, the overall figures are only half the tale. Within the top 25 there are success stories and strugglers, and degrees of success from rapid or robust growth to mere recovery. Perennial top ten out-performers Ipsos and GfK maintained their good record, joined this year by a resurgent Nielsen; and there was rapid growth for some companies in the next rank including Abt SRBI Inc. (17.9% growth), Japan’s Macromill (16.4%) and Lieberman Research Worldwide (14.5%). Brazil’s IBOPE and online measurement pioneer comScore have also seen double digit growth.

Seven firms in this year’s Global Top 25 saw a decrease in revenue, or did not grow enough to cover inflation. Of these seven, six are based in the US. Those whose absolute revenues shrank were Westat, J.D. Power, Video Research Ltd., Harris Interactive and ORC International. Growth at IMS Health and Market Strategies International was less than the inflation rate. Arbitron’s figures for 2010, showing little growth in a very difficult year and conceding a ranking place to Japan’s Intage, already seem somewhat dated.

By these figures, a merged Ipsos-Synovate would have taken third place, overtaking GfK and edging out IMS Health. The world’s 25 largest research firms had revenues of $18.8 billion in 2010, up 4.9% on the previous ‘dismal’ year – a ‘very healthy turnaround’ according to industry authority Jack Honomichl. However, ‘real’ revenues were not quite back to their 2008 levels, and some companies continued to shrink.

The Honomichl Global Top 25 report is published by Marketing News, the flagship publication of the American Marketing Association. The full report can be accessed at www.marketingpower.com/marketingnews .

 

 

My primary concern with the Honomichl report is that it fails to give a complete picture of both the financial state of the industry and the dynamic ecosystem of MR today.  Now, lest I be called a hypocrite, it’s an error that I committed with my own GRIT study as well, as Kathryn Korostoff rightly points out in a recent blog post. Here is an excerpt:

Currently, two well-respected organizations are conducting research on the market research industry. An important effort, to be sure, and one many of us appreciate. Both the Marketing Research Association (MRA) and Greenbook are to be applauded for investing time and budget into these efforts. When the results are released, they will be widely read and quoted—as they are each time they are published.

But why, oh why, are these surveys effectively screening out the industry players who are influencing the most investment, touching the most actual projects, and in general, rapidly becoming the face of market research to the general population?

I am talking about the technology suppliers. Market research software and platform companies. Companies like ConfirmIt, MarketTools, SurveyMonkey, Vovici and many more.

Ouch. She is right, and to make matters worse I had publicly complained about the Honomichl report for the same reason just a few weeks before we wrote the latest GRIT questionnaire. Kettle, meet pot!

Kathryn goes on to sum it up well:

For all of the wailing and shouting that the industry is changing, why is it that many of us still act like it isn’t? Technology companies are fundamentally changing the research process by making it easier, less costly, and in some cases, more effective. Can industry surveys that screen out technology providers really be representative of industry trends?

I’ll do her one better: not only are we not including technology providers that sit squarely within the MR wheelhouse, but Honomichl, GRIT, etc.. are also not looking at sample providers (Research Now, Toluna, SSI, et al)  hybrid SaaS  solutions (uSamp, Cint, Survey Analytics, etc…), social media research platforms (Alterian, Netbase, and hundreds more), analytical solutions, text analytics, biometric research suppliers, EFM platforms, and… well, you get the picture. Each of those segments have firms in them that would easily be within the Honomichl 50 and in some cases would be on par with the Top 10.  Additionally, each of those groups deserve a category within GRIT, and you can bet that we’ll be making the needed changes to the next wave of the study later this year!

So why is this a big deal? Because you can’t see where you’re going if you don’t know where you are. I don’t think anyone with eyes doubts that the industry is undergoing massive changes, but if we can’t assess how and where those changes are occurring it’s awfully hard to do more than make educated guesses on what might happen next. We’re in the business of providing data to fuel decisions, but we’re denying ourselves the very value proposition we sell to others. It’s time for all of us to start taking a serious look at the state of the industry and find our place in the shifting paradigm: to do that we need data.

I’ll do my part to continue to revise GRIT to meet the needs of an expanding definition of what market research is. GRIT will only tell us a bit more of the story as well: we need the Honomichl report to broaden it’s scope too so we can look at the full picture of financial performance of the industry. Until we can get a  complete look at the full ecosystem, we just won’t know the full story of how we’re really doing.

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2 Responses to “The Honomichl Global 25: Only A Part Of The MR Story”

  1. Harry Henry says:

    August 24th, 2011 at 10:49 am

    Hi Leonard
    I just completed such an effort of sizing and estimating all aspects (I think) of the MR industry beyond what Larry produces and including the segment you and Kathryn noted … and afew others.

    Be glad to discuss

    Harry Henry

  2. Leonard Murphy says:

    August 25th, 2011 at 6:47 am

    I’d love to hear more Harry. Feel free to contact me at lmurphy@brandscan360.com. Thanks!

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