The Honomichl / AMA Gold Top 50 Market Research Companies, Confirmit Tech & Innovation Survey & ESOMAR Global Price Study
We’re gearing up for the next round of the GRIT Report right now, so it seems appropriate to share the latest from the other research on research that inspires us in our own efforts.
First, the Honomichl Top 50 Report has now been renamed the AMA Gold Report for the first edition after the death of Jack Honomichl. It’s still the same great content, just under a new brand.
Here are the headlines from the press release:
The U.S. economy’s progress in 2013 was halting and uneven, with a few bright spots, and the U.S.-based market research industry’s progress was no different. Overall, the results are positive, with the 2013 growth rate besting the three previous years, research firms’ full-time employment increasing steadily and the Top 50 firms achieving the highest per-employee productivity rate in the past decade, but not all results were as positive.
Spending for U.S. marketing/advertising/public opinion research services in 2013 reached $10.7 billion among for-profit research firms, up 3.6% over the prior year, according to this 41st-annual analysis of market research industry trends. When 1.5% inflation is taken into account, net growth was 2.1%, the highest since 2009 and mostly in line with annual growth since 2001, with a few exceptions.
The 2013 revenue total was determined based on the individual, research-only revenues of 196 research firms. Those firms include the top 50 revenue generators—which are invited to submit their calendar 2013 research-only revenues and are then ranked in this Top 50 Report—and 146 firms from the Council of American Survey Research Organizations (CASRO), which provided combined revenues for these firms. Note that 32 CASRO-member firms are also reported individually among the Top 50 and so are excluded from the remaining CASRO aggregate numbers. Also note that when a firm made an acquisition or divestiture during 2013, adjustments were made to get an apples-to-apples comparison, as with Nielsen’s acquisition of Arbitron.REVENUE UPS AND DOWNS
The Top 50 firms in 2013 had total revenues of $9.8 billion, up 3.7% over 2012. This growth rate is more than double the previous year’s 1.7% increase, which is a definite improvement, but the rate is only about 60% of the average growth rate for the years going back to 2001, not counting the recession years of 2008 and 2009.The remaining CASRO firms reported total revenues of $836 million, up 3.1% from 2012 and accounting for just 8% of the total for all 196 firms analyzed in this report—with the Top 50 firms’ revenue accounting for the lion’s share at 92%.
Perhaps more relevant than the inflation-adjusted 2.1% net growth for all 196 firms included in this analysis is the comparison to gross domestic product, the value of all goods and services produced in the U.S., which is calculated by the federal government. Over the last 25 years, the Top 50 firms’ revenue growth rate has regularly surpassed the GDP’s growth rate, indicating the Top 50’s and the general market research industry’s long-term robustness. But since 2008, the firms’ results have fallen more in line with the GDP’s meager growth. This is a sign that the market research industry’s relative value has been on the wane, but with the marketplace’s increasing focus on data-led innovation, that soon may change.CHANGES IN THE LISTThere were a number of changes in the Top 50 rankings, as there are every year. The major change is Nielsen’s acquisition of Arbitron, ranked No. 6 last year. This served to bolster Nielsen’s No. 1 ranking. The industry leader now accounts for nearly one-third of Top 50 revenue and is further ahead in revenue of its nearest Top 50 competitors.
It’s worth noting that besides the Arbitron acquisition, only nine acquisitions (or divestitures) were identified among Top 50 firms in 2013. This is the lowest count in the last several years, including the 2008-2009 recession. Research firms have chosen to grow organically, rather than by acquisition.However, IMS Health, which regained its No. 3 ranking after listing on the NYSE via an IPO in April, revealed for the first time in its SEC filings not only the firm’s total revenue over the past several years as required of public companies, but also nine acquisitions in 2013 and eight in 2012 worldwide. While a private company, IMS Health previously had kept those acquisitions confidential.
Four firms are “new” to the list: Decision Resources Group, No. 16, operating 10 different healthcare information companies; MetrixLab USA, No. 31, a Dutch research firm that acquired MarketTools Research Solutions in the U.S. in 2012; MarketCast, No. 39, which came back on the list after a one-year absence while its ownership changed; and Bellomy Research No. 47, which returned after a two-year absence. Three firms dropped off of the list: Leo J. Shapiro & Associates, which declined to participate; LRA Worldwide, whose revenue fell below the threshold revenue of $16.7 million; and Public Opinion Strategies, a major player in political polling, which dropped below the threshold because of the lack of election polling in 2013.
Firms improving their position among the largest 20, besides IMS, are comScore, Symphony Health Solutions and ORC International. Most of the remaining 30 firms also earned reshuffled rankings, as is typical of the ups and downs in this segment every year. This is all displayed the Top 50 rankings chart on page 39.
OTHER RESEARCH SPENDINGThe Top 50 for-profit research firms are just the tip of the iceberg when accounting for all of U.S.-based research spending. In fact, they account for about 60% of it, depending on what you include or exclude. The profiles later in this report have been expanded to include research support industry firms, those that provide research products and services to the full-service Top 50 firms as well as end users such as small businesses, educators and the government. Many of them will process the data collected and provide summary data reports. Turn to page 35 for a broad but brief sampling of these firms. Their revenues were not available for this year’s report, but plans are to expand the list in future years and to collect or estimate their revenue.Another segment reported for the first time are report and advisory services firms, which include companies such as Forrester, Gartner, Mintel, Ovum, IHS and more. Their revenue is subject to wide swings, much more so than the Top 50. In the future, these firms also will be profiled individually and their revenue reported.As we move to a broader definition of for-profit market research, consideration must be given to new firms and new sectors. Among the new firms are Facebook, Google and IBM, which now host their own recent startup in-house research services. New sectors gaining prominence include marketing mix modeling and ad targeting, social media-based firms that scrape the Web and apply text analysis for understanding behavior, and management and marketing consulting firms—McKinsey, Bain, etc.—which contract with firms such as those in the Top 50 to provide them with data and reports that are then sold to clients at a significant markup. A fair estimate of their total revenue would be up to $700 million.Reading further, you will find profiles of each of the Top 50 firms that include top management, ownership, acquisition activity, if any, and a description of their offerings. Together with the Top 50 rankings and accompanying charts, a complete picture of the U.S. market industry emerges.Download the full report here: https://www.ama.org/publications/MarketingNews/Documents/The-AMA-Gold-Top-50-Report.pdf
We are THRILLED to hear that the Gold Report will continue to expand their definition of what market research is and which companies qualify. As I argued upon the publication of the ESOMAR Global Report, the traditional view of the industry is incomplete and must be expanded in order for us all to fully understand the marketplace today.
As always hats off to Larry Gold and his team for pulling this together; it’s a monumental effort and a vital source of much needed intelligence in a quickly changing industry.
Another perennial favorite is the annual Confirmit Market Research Technology & Innovation Report, by Tim Macer of meaning, ltd. While there is some overlap with GRIT, overall Tim and his team tend to focus on a smaller sample of primarily field companies in the traditional MR space to get a feel for what is actually happening from a tech adoption perspective. It is a great snapshot of where a very large chunk of the industry is.
Here is an excerpt from the press release:
Mobile technology, social media and multi-modal research have been the most positive technological developments in Market Research over the past decade, but firms have been challenged by disruptive elements including DIY surveys, data privacy and the displacement of fixed-line telephony during that time.
The survey, which analyzes the technologies and developments that shape the MR industry, also reveals that there has been a significant shift towards working with businesses on their Voice of the Customer (VoC) and Customer Experience Management (CEM) programs by research companies.
The study reveals 70% of research firms are now undertaking some VoC or CEM work and a majority are using NPS in some way. However, ‘traditional’ customer satisfaction studies are by far the most prevalent way of exploring the Voice of the Customer.
Tim Macer, managing director at meaning said, “The research industry clearly is adapting to the new data-rich, ‘always on’ landscape that we find ourselves in today. VoC is a natural place for research companies to be, but it will not be credible or sustainable if the industry does not embrace innovative methods to deliver a more holistic and integrated product. There are noticeable gaps in provision when it comes to integrating research with non-MR sources of data, and in dealing with the explosion of comment and other unstructured data.”
Meanwhile, the mobile channel remains a key area of development potential for research firms, according to the survey.
Ole Andresen, director of product management at Confirmit said, “The last ten years have been dubbed the ‘decade of the mobile device’ and mobile has certainly been a key technology for MR organizations. The growth in this area shows no sign of slowing down, with 42% of MR organizations now able to deliver surveys via mobile app, and 70% able to run them via mobile browser.”
“The survey findings reflect our own experiences at Confirmit, with many customers now seeking to embrace the mobile channel, using either mobile app, browser or even SMS, across the different programs they run,” added Andresen.
Other key findings of the survey include:
- Data privacy issues are a major disrupter for organizations collecting large amounts of data
- The use of the web as a data collection tool remains strong, but CATI is decreasing
- There is a measurable move towards integrated MR software platforms, and away from separate tools
- PowerPoint remains the most popular method of delivering research results, although the use of dashboards is expected to grow
- 10% of firms use word clouds as the main tool for presenting text analytics results – but their usefulness as a standalone tool is questioned.
This year sees the 10th anniversary of the survey. The findings are based on the responses of 240 MR firms globally.Click here to access the full 2013 Market Research Technology Report.
Last but not least we have the ESOMAR Global Prices Study, an invaluable guide and benchmark on global pricing for many research approaches broken down by country. Both suppliers and clients benefit from this review of average pricing, and of course folks looking to disrupt the market can use this as a way to look at their own pricing models.
Here is a description from the website:
For both suppliers and buyers of market research, the ESOMAR Global Prices Study is an essential element of any reference library. A unique guide in the planning and purchasing of market research.
The Global Prices Study, run every two years, provides insights in the price of research around the world. Differences in pricing that exist between countries, between types of research projects (and methodology) and over time. For almost 20 years, this biennial comparative analysis has been consistently regarded as one of the most important yardsticks in our profession.
The Global Prices Study 2014 is based on a set of dummy projects for which participating agencies prepare bids. The bids were submitted in response to a set of seven market research projects: six consumer research projects (four quantitative, one qualitative and one using online communities) one B2B project and a set of commercial tariffs for staff time.
This year a new estimate is added based specifically on a mobile research project. The report also includes some additional qualitative feedback on the understanding of ‘nationally representative’ sampling, which is a must-read section for both suppliers and buyers alike.
Quotes were provided by 736 agencies across 119 countries (up from 633 agencies and 106 countries in 2012). The data were collected between February and April, 2014.
The Excel tool is made available to you to:
- Build custom reports by selecting regions, countries and projects of interest
- Compare median prices
- Explore price indices and details of samples and quote ranges
Access to the Prices Study report and the Excel tool is available free to ESOMAR members at MyESOMAR.
We’ll begin data collection for the next wave of the GRIT study this month and will publish the report in the Fall. Keep a watch out for more info soon!