World's Top 25 Research Firms 'Hardly Growing'

Net growth of the world's Top 25 research firms, allowing for acquisitions and inflation, has declined from 6.3% in 2000 to 4.1% in 2001 and just 0.7% in 2002 according to the 2003 Honomichl Global 25 report. Their US$10.5bn revenue represents 63% of global commercial research spending, estimated by ESOMAR at $16.6bn.

Figures include market, media and public opinion research. The Honomichl report was recently published in the AMA's Marketing News, showing the top 25 global research companies in 2002 as below. Performance has no doubt been affected by a number of short-term depressors such as SARS and the run-up to war in Iraq.

* Estimated by Inside Research; ** For fiscal year ending March 2003
¹ Total revenues that include non-research activities for some companies are significantly higher.
² Rate of growth from year to year has been adjusted so as not to include revenue gains or losses from acquisitions or divestitures.
Rate of growth is based on home country currency and includes currency exchange effects.

VNU, topping the list for the second year in a row, owns ACNielsen, Nielsen Media Research and others, and now accounts for more than a quarter (27%) of Top 25 revenues. The next three highest-ranking firms are unchanged in their rank from last year. However, following the July 2003 acquisition of NFO WorldGroup, ranked 9th, TNS is likely to move up to second in 2003 and fourth among US firms. Between them the top four firms control nearly 57% of the Top 25 marketplace.

Thirteen of the Top 25 firms are based in the US, but these accounted for only 35% of Top 25 revenues - this figure has declined steadily in recent years and with the acquisition of US NFO by British TNS it will drop to less than 29%.

As of now 11 firms are public themselves, with another six owned by public companies. The proportion of Top 25 revenue generated by subsidiaries or outside the parent company continues to increase - to 66% in 2002. Only three firms - Westat Inc., Dentsu and Lieberman - essentially had no revenues from outside-home-country work. In 1995 the Top 25 had aggregate revenue of $5.7 bn of which 45% came from operations outside the home country.

The companies listed have acquired (100% or majority interest) about the same numbers of firms as they did the previous year (37 in 2002 and 35 in 2001) but at US$7.2m per firm the mean value of acquired companies has halved. Activity has decreased so far in 2003 but the NFO acquisition will of course carry the average value back up.

Further topline results of the ESOMAR Study of the Worldwide Market for Market Research will be reported in DRNO this week - they are also available at www.esomar.org

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.