Global marketing research holds its own in 2012
Syndicated services provide safety net against sagging economy
CHICAGO, Aug. 13, 2013 /PRNewswire-USNewswire/ -- The global marketing research industry fared better than expected in 2012, propelled largely by syndicated services and acquisitions, reports the American Marketing Association (AMA).
The world's 25 largest marketing research firms registered total revenues of $18.8 billion in 2012 — 2.6% higher than the previous year, according to the 2013 Honomichl Global Top 25 Report, published in the August issue of AMA's Marketing News magazine. Adjusted for inflation, the gain was 0.5%.
Stacked against a tepid global economy, the results can be summed up as "not too bad, considering," says Jack Honomichl, founder of the newsletter Inside Research, who compiles the annual global ranking with Inside Research publisher Larry Gold.
Syndicated services accounted for the majority of international research growth. Eight of the Top 25 firms — those primarily built on syndicated service offerings — posted collective revenue gains of 3.5%, while the other 17 firms showed aggregate revenue growth of 1.9%, not enough to cover the estimated 2.1% inflation rate.
"The eight database companies are pretty much the backbone of the research industry growth this year," Honomichl says. "Their contractual relations with clients provide a safety net for industry fortunes during harsh economic times."
Acquisitions among international research firms continued at a brisk pace, with seven more in 2012 (31) than in 2011 (24). In one of the more prominent transactions, Nielsen — which again ranked No. 1 on the Global Top 25 list — is in the process of acquiring No. 9-ranked Arbitron.
A driving force behind these acquisitions, Honomichl says, is the growing demand for information around the world. "If one of your largest clients decides to expand into China, it behooves you to be part of its expansion, and the quickest way to do that is to buy a Chinese research firm."
This all fuels the research industry's growing internationalism. Of the Top 25 firms' collective revenue, 54% came from operations outside of their home countries. Only three of the firms did not report revenues from abroad. Furthering the global trend, U.S. firms are increasingly subcontracting data collection and processing to countries such as India and the Philippines to save on labor costs.
The Global Top 25 marketing research firms had 110,870 full-time employees in 2012, only a slight (0.6%) increase over the previous year. But revenue per full-time employee continues to rise: That number has gone from an average of $162,000 per employee in 2009 to $170,000 in 2012.
To explain this trend, Honomichl cites more efficient and cost-effective software, an increase in online data collection and better management. "But it's safe to assume that research industry employees have been putting in longer hours, too," he added.
For more information, including on the methodology used in compiling the Honomichl Global Top 25 Report, please visit www.MarketingPower.com/honomichl. For more information on the American Marketing Association, please visit www.MarketingPower.com.
About the Honomichl Global Top 25 Report
The Honomichl Global Top 25 report, produced by Jack Honomichl and Larry Gold, covers the largest international players in the marketing research industry. Each company profile reviews the organization's leadership, revenues and business interests. A chart detailing the top 25 organizations is included for easy reference. Marketing News has featured the annual Honomichl ranking of global marketing research firms for 17 years. Also featured is a June report on the top 50 research firms in the U.S.
About the American Marketing Association
The American Marketing Association is the largest marketing association in North America. It is a professional association for individuals involved in the practice, teaching and study of marketing worldwide. It is also the source that marketers turn to every day to deepen their marketing expertise, elevate their careers and, ultimately, achieve better results. American Marketing Association members are connected to a network of marketing professionals more than 30,000 strong. For more information on the American Marketing Association, please visit www.MarketingPower.com.
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SOURCE American Marketing Association