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Thoughts on the 2012 Honomichl Report of Top 50 Market Research Companies

The estimable Larry Gold and Jack Honomichl of Inside Research just published the 2012 Honomichl Top 50 Report (the 39th edition!), which is the perennial benchmark that the research industry uses to measure financial success. What does it tell us about the possible future of the industry?

 

The esteemable Larry Gold and Jack Honomichl of Inside Research just published the 2012 Honomichl Top 50 Report (the 39th edition!), which is the perennial benchmark that the research industry uses to measure financial success. More than simply a snapshot of financial performance, Larry and Jack also go to great lengths to include an analysis of the state of the industry and uncover some of the macro forces impacting it. My hat is off to them, as always: what they do is hard work and is an invaluable service to the industry.

Before we dive into my take, congratulations are in order for every company that is on the list; bravo for their hard work and leadership! A special shout-out should go to the companies that made it onto the list this year: YouGov, StrategyOne, Chadwick Martin Bailey, and The LINK Group (go Atlanta!).

Now, what is the upshot of the report?

First, for those who might not be familiar with the Honomichl Report, it’s important to mention how the list is compiled. Here is the explanation from the report introduction:

The base for this 2011 analysis is revenue reported by 204 research companies for U.S. operations only (as much as possible, the nonresearch revenues of some of these companies have been edited out). The largest 50 firms get line-item identity; the balance is based on input from the Council of American Survey Research Organizations (CASRO) member firms that had, on average, revenues of $5.3 million in 2011. (Larger CASRO member firms are on the Top 50 list.)

That is important to keep in mind, because there are numerous reasons why many firms are not listed here: if a company isn’t a member of CASRO OR didn’t volunteer their information OR is not a “full service research provider” OR if their U.S. revenue is under about $15M  then they would not be listed here. So, I wouldn’t consider  the report to be a census or even a representative sample: it is a targeted convenience sample of one sector of the industry, although certainly the biggest segment of it. That being the case, it is an excellent barometer of the overall financial productivity of the industry.

Now, let’s dive into the meat of it a bit more. Here are the two things that jumped out at me the most:

  1. The Full Service component of the U.S. industry grew by  5.1% to $9.2B.
  2. Newer, innovative firms are growing rapidly. The Top 10, well… not so much:
  • Most Growth:
    • ABT SRBI                    +46.8%
    • COMSCORE                 +45.1%
    • AFFINNOVA              +44.7%
    • STRATEGYONE         +39.5%
    • COMMUNISPACE:    +27.3%
  • Largest Declines
    • KANTAR:                          – 0.5%
    • IPSOS/SYNOVATE        -O.6%
    • GFK USA                            -5.4%

That’s not to say that other firms are not experiencing growth: in the full ranking you can see that many firms had a good year in 2011, although the rate of growth was less than some of the newer firms.  It is also interesting to note the correlation between the GRIT 50 Innovation list and the Honomichl 50. While only 10 companies are on both lists, I would certainly think it’s safe to assume that innovation, when coupled with solid implementation and a great value proposition, does contribute to growth. In the chart below I’ve added in the GRIT  vote totals next to the H50 rankings.

 

U.S. Rank GRIT
2011 2010 Votes Organization Web Site: WWW.
1 1 77 Nielsen Holdings N.V. http://www.Nielsen.com
2 2 84 Kantar* http://www.Kantar.com
3 110 Ipsos http://www.Ipsos-NA.com
7      Ipsos http://www.Ipsos-NA.com
9 59      Synovate http://www.synovate.com
4 5 Westat Inc. http://www.Westat.com
5 4 6 SymphonyIRI Group Inc. http://www.SymphonyIRI.com
6 6 Arbitron Inc. http://www.Arbitron.com
7 8 64 GfK USA http://www.GfK.com
8 3 IMS Health Inc. http://www.IMSHealth.com
9 10 The NPD Group Inc. http://www.NPD.com
10 11 ICF International Inc. http://www.ICFI.com
11 13 comScore Inc. http://www.comScore.com
12 14 Maritz Research http://www.MaritzResearch.com
13 12 J.D. Power and Associates* http://www.jdpower.com
14 17 Abt SRBI Inc. http://www.AbtAssociates.com
15 15 dunnhumbyUSA LLC http://www.dunnhumby.com/us/
16 16 17 Harris Interactive Inc. http://www.HarrisInteractive.com
17 18 8 Lieberman Research Worldwide http://www.LRWonline.com
18 19 Market Strategies International http://www.MarketStrategies.com
19 20 ORC International http://www.ORCInternational.com
20 22 National Research Corp. http://www.NationalResearch.com
21 26 20 Communispace Corp. http://www.Communispace.com
22 23 Knowledge Networks Inc. http://www.KnowledgeNetworks.com
23 21 Market Force Information Inc. http://www.MarketForce.com
24 24 Burke Inc. http://www.Burke.com
25 27 88 Vision Critical Communications Inc. http://www.VisionCritical.com
26 25 MVL Group Inc. http://www.MVLgroup.com
27 28 Directions Research Inc. http://www.DirectionsResearch.com
28 31 Morpace Inc. http://www.Morpace.com
29 30 International Communications Research http://www.ICRsurvey.com
30 29 Phoenix Marketing International http://www.PhoenixMI.com
31 33 Radius Global Market Research http://www.Radius-Global.com
32 32 Lieberman Research Group http://www.LiebermanResearch.com
33 35 MarketCast http://www.MarketCastOnline.com
34 34 Service Management Group Inc. http://www.SMG.com
35 YouGov http://www.YouGov.com
36 37 Informa Research Services Inc. http://www.InformaRS.com
37 38 National Analysts Worldwide http://www.NationAlanalysts.com
38 49 26 Affinnova Inc. http://www.Affinnova.com
38 43 Rentrak Corp. http://www.Rentrak.com
40 41 MarketVision Research Inc. http://www.MV-Research.com
41 45 Market Probe Inc. http://www.MarketProbe.com
42 48 Gongos Research Inc. http://www.Gongos.com
43 40 KS&R Inc. http://www.KSRinc.com
44 42 The Pert Group http://www.ThePertGroup.com
45 46 AlphaDetail Inc. http://www.AlphaDetail.com
46 StrategyOne Inc. http://www.StrategyOne.com
47 Chadwick Martin Bailey Inc. http://www.CMBinfo.com
48 50 RTi Market Research & Brand Strategy http://www.RTiResearch.com
49 The Link Group http://www.TLG.com
50 47 Q Research Solutions Inc. http://www.QResearchSolutions.com

 

I also think it’s interesting to look at the types of organizations represented here. While I am not familiar with all of them, a quick perusal of the profiles in the H50 report paints a picture that in most cases (but not all) each of these firms posses some combination of:

  • Extensive vertical expertize and focus
  • Proprietary syndicated/subscription based products
  • Leader status in a specific technique  or approach
  • Proprietary technology that drives their primary offering
  • A strong culture of strategic consulting

That is a pretty good “recipe” for creating value within the research space today, although  other than vertical expertize and strategic consulting, each of the the ingredients are increasingly at risk of disintermediation due to technology offerings  that can meet the “cheaper, faster, better” acid test need of clients. For me that underlines the point that the ultimate evolution of what we think of as “full service” market research is heading towards an era where the human capital of MR will be the value driver, not the “how” of data collection and analysis.

I’d also be remiss if I didn’t underline the point that although the H50 is a fantastic report chock full of “need to know” content, it must be taken in it’s own context and not construed as a complete review of the industry: sample providers, technology companies, self-service solution providers, analytical firms, plus the emerging players in Mobile, Social Media, neuromarketing, big data analytics, etc are not part of the universe of the H50, although if those firms are part of CASRO their revenue may be included in the overall market sizing projections. My position is that those booming fields will continue to impact the industry in a variety of ways for many years to come, but we need to recognize them and prepare for their ongoing impact now, and that should probably start by making them feel like “part of the family”.  Many of the type of companies I have mentioned  could be the H50 firms of  the future, but we’ll need to expand the definition of what constitutes a “market research supplier” in order to get there. It’s time for our industry to broaden our horizons so we can truly get an accurate picture of the dynamics impacting us.

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2 Responses to “Thoughts on the 2012 Honomichl Report of Top 50 Market Research Companies”

  1. Simon Chadwick says:

    July 11th, 2012 at 9:00 pm

    Excellent analysis, Lenny, and I agree with your last para wholeheartedly. Interestingly, Larry Gold is not only fully aware of the implications of your conclusions, but is working hard with ESOMAR on coming up with a solution to how the industry is defined going forward. ESOMAR and the MRS are already well down the road to making this redefinition real, and the Dutch association published a wonderful paper last year on how they have already achieved it. Here in the US, I do not believe that we have yet quite fully grasped the urgent need for redefinition, which is the first step to including all these new players in “the family”.

  2. Leonard Murphy says:

    July 11th, 2012 at 9:39 pm

    Thanks Simon, it is always important to get your perspective! You “walk the halls of power” much more frequently than I do so it’s great to get the “inside scoop” from your efforts with these multiple bodies. It’s no surprise that ESOMAR is working on broadening the scope of what is considered MR, but based on their thinking about social media last year I fear MRS may actually become more restrictive. I think MOA is going in the right direction as well, and I know there are efforts underway at MRIA and AMSRS to redefine the industry in their countries. I think ARF is doing this in principle too, although their charter is very different from others here in the U.S.. QRCA seems to be embracing the change within qualitative which is heartening to see. All of that is good news for the future of the industry. On the flip side, it is incredibly disappointing to me that we have not seen leadership, or at the very least deeper public collaboration, from the other U.S. trade orgs; I fear they risk irrelevance by not taking the lead on this.

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