Last year was a tough one for marketing research firms, which posted a 3.5%? decline in research revenue – a steeper drop than the 3.1% in 2008, according to the American Marketing Association.
It was the biggest drop in revenue for the commercial marketing/advertising/public opinion research services industry in two decades, according to AMA’s Marketing News magazine, which put out its annual Marketing Research Issue on the last day of June. The total industry analysis is based on 203 firms’ aggregate revenue of $8.6 billion in 2009.
A Serious Impact
“These numbers show just how seriously the research industry has been impacted by the current recession,” says Jack Honomichl, founder of the industry newsletter “Inside Research.”
The report also points to the higher number of firms showing revenue dips. Thirty of the top 50 firms profiled in 2009 had down revenues, whereas only 17 saw revenues fall in 2008. At the same time, employment levels fell as well. Over the past two years, the marketing research industry has seen an 11.4% decline in full-time employees. Conversely, nine of the top 50 firms – large database companies with long-term contracts – showed no change in revenue. One large firm, Westat, whose work comes almost exclusively from U.S. government agencies, saw a 7% boost in revenue.
Bigger is Better
Additional data from the Council of American Survey Research Organizations was provided for research firms not large enough to be included in the top 50. As a group, their revenue was down 8.5%, compared with an aggregate 7% for the 41 larger survey/qualitative research vendors included in the top 50.
“The smaller and more ad hoc a business is, the harder it was hit in this recession,” Honomichl says.
The Nielsen Co., with just over $4.6 billion in research revenue, was at the top of the ranking. Kantar followed, with just over $2.8 billion. More than half of the revenue of each of the top three firms came from outside the U.S. – an indication of the increasingly global nature of the industry.