Clients use market research companies to gather information about target markets and customers. Unfortunately for the industry, companies changed their focus from growth to survival following the recession, subsequently cutting research, development and marketing budgets in order to reduce costs. At the same time, a shaky labor market and an uncertain economic climate have caused consumer spending to fall, particularly on discretionary and big-ticket items. In the five years to 2017, more changes in media consumption habits will occur, with operators shifting their focus toward social and mobile media. These factors will provide a platform for growth to industry firms. Revenue is expected to rise on the back of increasing client marketing budgets, the 2012 presidential election and the Summer Olympics. For these reasons, industry research firm IBISWorld has added a report on the Market Research industry to its growing industry report collection.
Los Angeles, CA (PRWEB) July 29, 2012
Unfortunately for the Market Research industry, many businesses changed their focus from growth to survival during the recession, subsequently cutting research, development and marketing budgets to reduce costs. A shaky labor market and an uncertain economic climate prompted consumers to cut back on spending, particularly on discretionary and big-ticket items. “Because makers and sellers of consumer goods are major users of industry services, reducing investment on developing new products was particularly detrimental to industry players,” says IBISWorld industry analyst Anna Son. “Additionally, many businesses shifted their focus to retaining existing customers rather than acquiring new ones.” These factors have hampered industry revenue, allowing for only a marginal annualized increase of 1.5% to $19.2 billion in five years to 2012. Revenue is expected to grow 3.1% in 2012, stemming from rising client marketing budgets, the 2012 presidential election and the Summer Olympics.
Although profit margins are expected to rise in 2012 as demand grows, operating margins fell during the recession as firms offered their services at discounted prices to retain clients. “As profit margins declined, some firms were forced to leave the Market Research industry, while larger companies acquired others,” adds Son. “Major advertising agencies have increasingly acquired market research firms as they continue to pursue value-added services in complementary industries.” For example, WPP's Kantar Group merged with TNS to form the second-largest player in the industry in 2008, behind Nielsen Holdings NV. As a result of these acquisitions, the number of market research firms has increased marginally, at an average rate of 1.1% annually to total 33,581 in the five years to 2012. The industry is structured around these few major firms, a large number of regional firms and many small and sole practitioners. Sole practitioners are often experienced industry professionals who do consulting based work and can be sub-contracted by larger players to provide specialist insights or skills.
In the next five-year period to 2017, changes in media consumption and increased usage of social media and mobile devices will revolutionize traditional ways of conducting market research. Industry players will need to adapt services to reflect this shift to better understand the complexity of consumers' purchasing behavior. Furthermore, major players will continue to expand internationally to offer valued-added services to a larger client base. As consumer spending and corporate profit increase, businesses will start investing in market research again, allowing industry players to increase prices for their service, promoting profit growth. Altogether, these factors will provide a platform for an expected revenue increase in the five years to 2017. For more information, visit IBISWorld’s Market Research in the US industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry systematically gather, record, tabulate and present marketing and public opinion data.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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This article (Market Research in the US Industry Report Now Available from IBISWorld) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.