$1.1 billion Invested in MR Sector Last Year

A recent study suggests that in order to attract financial funding, an MR business must be US-based, offer products connected with social media, and feature the word 'analytics' throughout its business plan. Around $1.1 billion was invested in the sector in 2011.

These are the conclusions of the 2011 Cambiar Capital Funding Index, which studies how much funding flows into the market research and related industries over the course of a year, where it comes from, and who it reaches.

From November 2010 to November 2011, a total of more than $870m in new capital was invested in market research, insights, intelligence and analytics companies. However, this is the figure from 'announced' deals, and Cambiar suggests that this is about 80% of the capital investment that actually took place, given that some investors do not want their deals announced.

If this is correct, then Cambiar - which provides management consultancy to the MR industry - believes the total amount of new capital 'inflows' to the industry probably amounted to closer to $1.1 billion in 2011.

According to the report, the amount of funding going into traditional market research, versus new areas such as social media analytics, appears to be 'in proportion and relatively healthy'. The same is true of the amount of funding originating in Europe versus the USA.

But there is a 'major distortion' in the data, which Cambiar claims has resulted from the infusion of EUR 200m (the equivalent of $270m) equity capital into Ipsos to assist in its acquisition of Synovate.

Excluding this one-off event, the US completely dominates the rest of the world as both a source of funding and 'home' of the companies being funded by a factor of 10:1. Additionally, investment in companies claiming 'analytics' as their specialism outpaces investment in 'market research' companies by a factor of 2.5:1.

Around a third of all investment is made in firms that claim some sort of connection to social media.

Cambiar Partner Simon Chadwick says that broadly speaking, investment comprises:

• Analytics companies ($297m)
• Market research (or related) companies ($138m)
• Companies dedicated to providing technology platforms for gathering, managing and analyzing consumer and business information ($101m)

Ipsos aside, during 2011, investors put just $15m into what is regarded as 'traditional' full-service market research companies.

Web site: www.consultcambiar.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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