• by Tanya Gazdik , August 13, 2013

The global marketing research industry fared better than expected in 2012, propelled largely by syndicated services and acquisitions, according to the American Marketing Association.

The world's 25 largest marketing research firms registered total revenues of $18.8 billion in 2012, which is 2.6% higher than the previous year, according to the 2013 Honomichl Global Top 25 Report, published in the August issue of AMA's Marketing News magazine. Adjusted for inflation, the gain was 0.5%.

Stacked against a tepid global economy, the results can be summed up as "not too bad, considering," says Jack Honomichl, founder of the newsletter Inside Research, who compiles the annual global ranking with Inside Research publisher Larry Gold.

Syndicated services accounted for the majority of international research growth. Eight of the Top 25 firms -- those primarily built on syndicated service offerings -- posted collective revenue gains of 3.5%, while the other 17 firms showed aggregate revenue growth of 1.9% -- not enough to cover the estimated 2.1% inflation rate.

"The eight database companies are pretty much the backbone of the research industry growth this year," Honomichl says in a release. "Their contractual relations with clients provide a safety net for industry fortunes during harsh economic times."

Acquisitions among international research firms continued at a brisk pace, with seven more in 2012 (31) than in 2011 (24). In one of the more prominent transactions, Nielsen, which again ranked No. 1 on the Global Top 25 list, is in the process of acquiring No. 9-ranked Arbitron.

A driving force behind these acquisitions is the growing demand for information around the world, Honomichl says.

"If one of your largest clients decides to expand into China, it behooves you to be part of its expansion, and the quickest way to do that is to buy a Chinese research firm," he says.

This all fuels the research industry's growing internationalism. Of the Top 25 firms' collective revenue, 54% came from operations outside of their home countries. Only three of the firms did not report revenues from abroad. Furthering the global trend, U.S. firms are increasingly subcontracting data collection and processing to countries such as India and the Philippines to save on labor costs.

The Global Top 25 marketing research firms had 110,870 full-time employees in 2012, only a slight (0.6%) increase over the previous year. But revenue per full-time employee continues to rise: That number has risen from an average of $162,000 per employee in 2009 to $170,000 in 2012.

To explain this trend, Honomichl cites more efficient and cost-effective software, an increase in online data collection and better management.

"But it's safe to assume that research industry employees have been putting in longer hours, too," he added.

For more information, including the methodology used in compiling the Honomichl Global Top 25 Report, visit www.MarketingPower.com/honomichl.