Growth in US Slows

The annual review of the US market research sector by Jack Honomichl, as reported in Marketing News, shows that growth in the marketing/advertising/public opinion research industry slowed in 2000. This was primarily due to the contracting US and worldwide economy in the second half of the year.

Specifically the worldwide annual revenue growth rate for the 50 largest US based research organisations climbed by 7.4% in 2000, compared with 8.5% in 1999 and 8.9% in 1998. Indeed, of the year’s Top 50, 13 witnessed a decline in revenues in 2000 or a growth insufficient to cover inflation.

Undoubtedly, contributing to this trend was the growing strength of the US dollar vis-a-vis other major currencies. This negatively affected revenues American firms generated from operations outside the United States. Of the Top 50 firms, 42 generated revenue from subsidiaries, branch offices or joint ventures outside the USA, and in total, the Top 50 firms achieved over a third (37%) of their revenues from non-US operations.

Also significantly in 2000, merger and acquisition activity slacked off. Five of the Top 50 firms made a research acquisition during the year, and no Top 50 firm was acquired. This shows a significant slowdown from the M&A activity reported in 1999.

The review found that US$5.1 billion was spent on marketing/ advertising/ public opinion research services in the USA in 2000. From the 181 base of companies (including CASRO members), it is known that 2000 revenues for non-profit research firms, after adjustment for acquisitions and divestitures, climbed by 9% in 2000. This compares to 10.1% in 1999 and 11.6% in 1998. Looking at the 13 year period from 1988 to 2000, spending on average for research services (profit only) in the US grew by 9% annually. Adjusted for inflation, this leaves a real growth rate of 5.7% per year leading to the finding that research in the US remains a growth industry.

Tomorrow we look at the Top 50 ranking.