TOP25MarketResearchFirms

THE WORLD’SLEADINGMARKETINGRESEARCHCOMPANIESTHE WORLD’SLEADINGMARKETINGRESEARCHCOMPANIES

MarketingNews /

HONOMICHL GLOBALTOP 25

Aug. 15, 2006

H3

ByJACK HONOMICHL

T

he world’s 25 largest marketing/advertis-ing/public opinion research conglomerateshad, in toto, revenue of $14.4 billion in2005, up 5.4% over 2004. After adjustingfor inﬂation, the real growth rate is estimated at 2.9%.How does that compare with previous years? In2004, growth was 2.5% after inﬂation; in 2003, it was

down

0.6%; in 2002, up 0.7%; in 2001, up 4.5%; in2000, up 6.3%; in 1999, up 5.8%; in 1998, up 6.9%;and in 1997, up 6.8%. Average those nine years and you get an annual organic, real growth rate of 3.9%for the industry’s behemoths. In this contest, 2005 wasa downer. All revenue shown here is in U.S. dollars based onan annual conversion rate between each firm’s homecountry currency and the U.S. dollar—but all growthrates were calculated in each firm’s home country cur-rency. As much as possible, revenue from nonresearchactivities at these firms has been screened out. Also,growth rates have been adjusted to account for acqui-sitions made during 2005. That is, either revenue fromacquisitions made during 2005 have been dropped out when calculating growth rates or the revenue foracquired firms have been included for both 2005 andthe base year of 2004. That was done to eliminate“hype” from acquired growth so as not to put an artifi-cial glow on the industry’s fortunes. (Details of theseadjustments can be found in the individual company profiles that follow.)In short, to the extent possible, the revenue andgrowth rates shown here have been scrubbed to pro-duce a pure reading on the industry’s growth rate.Just these Top 25 organizations account for abouttwo-thirds of the world spend through commercialfirms for research services.The global inflation rate used was calculated by tak-ing the known inflation rates in the United States,Japan and Western Europe and then weighting themto derive an average for those markets, which accountfor the lion’s share of worldwide expenditures. Thataverage for 2005 was 2.5%.Revenue figures come from the organi-zations involved, and many are either pub-lic companies or subsidiaries of publiccompanies. Input from privately held com-panies is subject to third-party verification.In 2005, revenue from two firms—theKantar Group and J.D. Power and Associ-ates—had to be estimated, since their par-ent companies do not release relevantfinancial information. But these estimates,it is believed, are close to actual.This background, I suggest, is worth review; if thesedata are to be cited or used in planning, best the userunderstand exactly how they were derived, and that isa process unique to U.S. estimates of market size andgrowth.These, then are the major findings from this, my 11th annual Global industry review prepared exclu-sively for

Marketing News

.

Changes in listings

As usual, there were changes in the Top 25 lineupduring 2005. Two new firms—comScore NetworksInc. in Reston, Va., and Market Strategies Inc. in Livo-nia, Mich.—were added. They filled slots left by twofirms who lost line item identity due to acquisition—namely NOP Group, No. 9 in 2004, which wasacquired by GfK AG (No. 4); and MORI, No. 19 in2004, which was acquired by Ipsos Group SA (No. 6).These were the largest and most conspicuous changesin ownership last year, but still just part of the generalurge to merge fever that has transformed the industry in recent years. Synovate, the British con-glomerate, made nine acquisitions during2005. U.S.-based IMS Health made 11. Ger-man-based GfK made four, and Taylor NelsonSofres and VNU (all Nielsen MarketingResearch), made three apiece. Details aboutthese acquisitions and those made by otherTop 25 firms are to be found in the individualcompany profiles that follow.So, the multinational sprawl of these inter-national conglomerates continued apace in2005, and indeed they have made numerousother acquisitions during the first half of 2006. During2005, this group, in toto, got two-thirds of their rev-enue from operations outside their home country.Only three—Nikkei Research in Japan and Abt Associ-ates and Westat in the United States—confined theiroperations to their home country. You’ll note that the home countries for this year’sTop 25 include, in addition to the United States, theNetherlands, Germany, the United Kingdom, Japan,France and Brazil. This is truly a cosmopolitan group;

See HONOMICHL / Page H54

NO GREAT GROWTH

Compared to prior years, revenue gains small

These Top 25organizationsaccount for abouttwo-thirds of theworld spendthroughcommercial firms for researchpurposes.

United States 30%United Kingdom 26%Netherlands 24.5%Germany 9.1%

France6.0%Japan3.8%Brazil 0.6%

Where the top 25are based

Percentageof thecombinedglobalresearchrevenueof the Top25, by eachfirm’s country