It has been a mixed year for market research. While the sector remains in good health, overall growth - especially at the top end of the industry - is flat. Figures from the Market Research Society (MRS) show the industry's turnover grew just 2.4% to £1.35bn in 2006, roughly equivalent to the rate of inflation.
In part, this sluggishness reflects the UK's status as the world's second-biggest research market behind the US. 'The UK industry is probably exhibiting the lowest growth in Western Europe at the moment, but we also have a higher market penetration per head of population than anywhere else in the world,' says MRS director-general David Barr.
In the past few years, market maturity has led to consolidation among the bigger agencies, with GfK acquiring NOP and MORI joining forces with French firm Ipsos. More recent deals have spread to the middle ranks, with a research arm the latest must-have for marketing services groups. Last May, Creston bought ICM Research for £37.2m; in June, Munro Global acquired FDS; and this January, Omnicom snapped up Flamingo International. Cello, meanwhile, continued its shopping spree, buying five research firms in the past 12 months.
Explaining her company's decision to join Omnicom, Flamingo founding partner Kirsty Fuller points to the firm's new presence in Tokyo and plans to open an office in New York this November. 'Our ambition was always to have global reach and establish offices in key global hubs,' she says.
The exception is HPI Research, which at the end of 2006 underwent a management buy-back from Interpublic to become the UK's biggest independent. 'We didn't entirely fit into the group and the synergies from cross-referrals with advertising, communications and direct marketing didn't really materialise,' says senior partner David Iddiols. 'Now we're more of a free spirit, and enjoying a nice bounce in business.'
Given the market's maturity, it is no surprise that the industry's major trends have changed little from previous years. The shift to online data collection has continued, as has the growth in the involvement of procurement specialists in pitches and use of online 'reverse auctions' to source work at the lowest fee.
Another trend still evident is agencies' relentless rebranding as 'insight partners'. The goal remains to move beyond data provision (an increasingly commoditised realm) to embrace the co-ownership of business problems and opportunities.
'As budgets get tighter and marketing departments get smaller, clients are coming to us to help drive strategy,' says Simon Everard, group chairman of international B2B specialist Kadence Group. He points to his firm's relationship with Novartis Animal Health, for which the agency recently translated its product launch experience in Europe to inform a similar launch in the US. As the demand for insight over information grows, so research firms are hiring personnel with strong sector know-how and client-facing skills.
One area growing as agencies seek to increase their influence is video. Several agencies have video departments to make mini-documentaries summarising their findings, which helps to get information in front of senior decision-makers. Clare Bruce, chief executive of Nunwood, says her firm communicates 'the face of the consumer' to clients by using short films.
To further this partnership approach, at the end of 2006, Nunwood rolled out website libraries for clients including Standard Life, Alliance & Leicester and fashion chain New Look. Similar to social-networking sites, these resources enable global research to be held in one place and shared with both internal and external stakeholders by invitation. 'It creates a central database of consumer knowledge and corporate information that organisations have never had before,' says Bruce.
Nigel Gollop, insight manager customer experience at Norwich Union, echoes this view, explaining that his company has moved into videos, weblinks and podcasts to communicate internally. To improve relationships with suppliers, Norwich Union is also rationalising its research roster, from between 30 and 40 agencies to a core list of eight. 'We're still open to new suppliers, but it means we can work more in partnership as agencies get to know our business and can apply work they've done in the past to new projects,' he says.
At First Direct, research partners are an essential element of FD Com, the bank's team of internal and external communications, creative, design and media personnel that typically meets every quarter. 'It's important that people understand their own contribution, but they also need to see the big picture,' says First Direct's head of brand communications, Matthew Higgins.
Having recently conducted a phased project focusing on the bank's strategic direction and 24-hour customer service proposition, Higgins prefers to employ individual researchers rather than any particular research company. 'We need a level of continuity and people who can really get into the DNA of the brand,' he says.
The growth of online research continues to be one of the key issues within the industry, and many of the fastest-growing agencies are those providing online services; revenue at online fieldwork specialist Research Now, for example, is up 118%.
The option of web surveys has led some clients to attempt to conduct research in-house. However, many in the industry believe this trend will be short-lived, as concerns regarding the quality of DIY web surveys take root.
'Some realism is returning in terms of what online research is good and bad for,' says BMRB managing director Richard Asquith. He highlights the growth in managed panels, where organisations are building ongoing relationships with respondents through research communities.
TNS UK's managing director of information services, Nigel Spackman, points to the flexibility offered by internet research. 'Clients are becoming much more aware that it's a good way to test advertising, design or new products with visuals and film clips,' he explains.
Timothy Ryan, GB marketing director of subscription TV channel Setanta Sports, meanwhile, has ditched the 'slow fat quarterly report' approach to research. He now conducts the bulk of his research using online pre-testing tools, online omnibus surveys and blog trackers. 'The two biggest things that have changed how I do market research are the two things that have changed how I do marketing: the immediacy of the media and the internet,' he says. 'I need quick snapshots, or I'm not able to get the results immediately enough to act on them.'
The growth of broadband penetration has led to talk of 'research 2.0' - namely the use of tools such as social media to conduct research. Blogs in particular have grown in popularity over the past year. A year ago they were niche, but mainstream agencies are now turning to them. GfK NOP, for example, recently asked members of its surveys.com community to keep a two-week online diary about what they eat for breakfast.
Others are cautious about how to adapt research methodologies in a sufficiently rigorous way. 'Getting representative samples is the bedrock of our business and, while blogs are clearly rich information sources, they're random consumer reactions, so can be biased and misleading,' warns Spackman.
Flamingo's Fuller argues that as long as clients are aware that they are not necessarily getting representative samples, blogs can be a vital resource. 'We commission consumers to blog for a week or so, giving them themes, brands or product categories, because we're very much focused on development work, so often want the views of people who are at the leading edge of shifts in attitudes,' she says.
In a similar vein, in July, online research specialist eDigitalResearch launched an eProductRating service that collates consumer-generated content, allowing organisations to build their brands through word of mouth. 'This service allows e-tailers to react to genuine, free expression from their target audience and the subsequent analysis and automatic ratings also allow for immediate appraisal of product progress,' says the agency's director, Michelle Fuller.
Media fragmentation is providing further opportunities for agencies as clients seek greater knowledge of how their marketing campaigns are performing across media. Millward Brown, for example, ran a project for a consortium of US broadcasters, including Fox, NBC and ABC, to measure the emerging effectiveness of advertising on video platforms such as YouTube.
HPI offers a Superglue tool that examines how the different components of a campaign fit together. 'Whether its TV, direct mail or online, it means clients can assess what they're doing and plan what they should do next year,' says Iddiols.
Carat Insight, meanwhile, provides a service called Integrated Communications Evaluation (ICE), which uses recognition techniques and statistical modelling to identify the relationship between media channels and creative.
'Most research techniques have relied on consumers' ability to remember advertising messages and they then use this as a proxy for effectiveness,' explains the agency's head of evaluation, Mary Jeffries. 'This means that media such as radio, outdoor, press, cinema and online suffer terribly, as they do not get recalled. Our belief is that ads can work even if you can't spontaneously recall them. This is why ICE uses a recognition technique, which is a more accurate measure of likely exposure to advertising than recall.'
Publicis-owned i to i Research measures multimedia campaigns in a similar fashion, looking at the multiplier effect on mainstream media of non-traditional activities such as events and sponsorships. 'We use online Flash technology to recreate experiences for respondents and help them recognise all the different communications they've been exposed to,' says chief executive Claire Spencer. Using large representative samples, the firm then matches media exposure to key performance indicators such as brand values and purchasing considerations.
While margins remain tight in sectors such as retail, hot areas for research include rapidly maturing markets such as online gambling. Agencies must be ready to take advantage of these opportunities; from Facebook to climate change, clients constantly face a bewildering array of new challenges, and those research agencies able to provide instant sound guidance will reap the dividends.
THE SARBANES-OXLEY EFFECT
For US-owned companies affected by the Sarbanes-Oxley Act, which restricts the information companies can disclose, we have used Companies House data supplied by Willott Kingston Smith. In some cases the latest data available was for 2005. No data was available for i to i Research or Carat Insight.
TOP RESEARCH AGENCIES
Agency Turnover (pounds) % Staff Int'l
2006 2005 chng work
1 TNS 151,100,000 159,100,000 -5 1788 n/a
Millward Brown* n/a 115,428,000 n/a n/a n/a
2 GfK NOP 112,082,000 107,695,000 4 635 26
3 Ipsos MORI 110,000,000 103,500,000 6 917 15
ACNielsen* n/a 70,304,000 n/a n/a n/a
4 Synovate 64,300,000 54,700,000 18 450 54
International* n/a 62,148,000 n/a n/a n/a
BMRB* n/a 47,825,991 n/a n/a n/a
IRI Infoscan* 34,161,106 34,496,993 -1 238 n/a
Banner Corporation* 31,782,613 23,129,564 37 n/a n/a
5 Cello Group** 30,964,631 16,105,071 92 450 56
6 Harris Interactive 22,679,000 19,886,000 14 240 52
7 ICM 17,464,000 14,802,000 18 85 13
8 Hall & Partners
Europe 16,300,000 12,900,000 26 108 40
9 Illuminas 15,685,000 15,795,000 -1 130 30
Added Value* n/a 13,692,163 n/a n/a n/a
10 ORC International 12,742,161 12,811,775 -1 124 18
11 Maritz Research 11,500,000 10,300,000 12 100 40
12 BDRC** 9,260,000 6,279,000 47 62 21
International* n/a 8,516,393 n/a 48 70
13 HPI Research 8,023,000 9,579,000 -16 56 40
14 Research Now 7,951,000 3,639,000 118 280 50
15 Nunwood 7,635,000 6,400,000 19 150 8
16 Marketing Sciences 7,335,473 7,037,001 4 45 23
17 Quaestor Research 6,701,957 6,967,000 -4 80 1
18 SPA 6,017,113 5,599,567 7 52 9
19 2CV Research 5,969,000 5,546,700 8 42 40
20 FDS 5,958,000 6,057,398 -2 84 3
BPRI* 5,700,594 6,268,758 -9 29 n/a
21 Conquest Research 5,546,100 5,187,350 7 35 25
22 YouGov 5,500,000 2,942,000 87 90 15
23 Business Research
Group 5,103,731 4,636,226 10 55 85
International* n/a 4,835,000 n/a n/a n/a
HeadlightVision* n/a 4,459,783 n/a n/a n/a
24 Network Research
& Marketing 4,057,754 4,632,344 -12 35 3
25 Snap Surveys 3,999,561 3,064,947 30 66 5
26 Grass Roots UK 3,920,000 3,632,000 8 285 3
27 Accent 3,893,492 3,734,947 4 38 5
28 Firefish 3,774,879 3,031,548 25 17 50
Ulster* n/a 3,364,836 n/a n/a n/a
29 Buckingham Research
Associates 3,352,878 3,981,781 -16 21 40
30 Echo 3,304,121 3,008,907 10 60 45
31 Swift Research 3,154,932 2,928,665 8 60 5
Morpace* n/a 3,106,480 n/a n/a n/a
32 Retail Eyes 3,084,286 1,703,023 81 47 1
33 Kadence (UK) 3,007,469 2,483,042 21 20 60
34 Intrepid 2,753,034 2,180,907 26 20 45
35 FreshMinds 2,395,355 1,863,893 29 65 10
36 ABA Market Research 2,390,390 1,559,221 53 38 0
37 Jones Rhodes
Associates 2,452,000 2,212,000 11 20 0
38 Prescient 2,360,898 2,216,882 6 6 55
39 MSTS 2,111,125 1,764,425 20 17 2
40 20/20 Research 1,914,729 1,773,229 8 24 0
41 The iD Factor 1,910,000 1,007,000 90 30 35
42 Market Measures 1,847,214 1,895,045 -3 18 13
43 Consumer Profile 1,828,262 1,900,681 -4 12 12
Partnership 1,744,758 1,144,384 52 25 0
45 Brand Driver 1,422,820 1,234,583 15 11 60
Research* n/a 1,291,000 n/a n/a n/a
46 Databuild 1,007,266 866,873 16 15 0
Research 960,958 732,925 31 6 0
48 RCU 943,614 901,469 5 15 0
49 Survey Solutions 927,009 655,231 41 17 10
50 Acritas 757,742 613,761 23 20 33
51 Brahm 720,000 655,520 10 185 5
52 Spring Research 683,000 525,000 30 4 50
53 IRN Research 486,200 409,985 19 3 5
Founded 1967. Publicly quoted. Chief executive David Lowden. No work
breakdown given. www.tns-global.com
Founded 1973. Subsidiary WPP. Chief executive Warwick Nash. No work
breakdown given. www.millwardbrown.com
2 GfK NOP
Founded 1957. Subsidiary GfK AG. Managing director Phyllis
Macfarlane. 55% quantitative, 6% qualitative, 27%
continuous/syndicated, 9% mystery shopping, 3% other. www.gfknop.com
3 Ipsos MORI
Founded 1946. Subsidiary Ipsos. Chief executive Brian Gosschalk. 63%
quantitative, 12% qualitative, 24% continuous/syndicated, 1% other.
Founded 1939. Subsidiary The Nielsen Company. Managing director
Eleni Nicholas. No work breakdown given. www.acnielsen.co.uk
Founded 2003. Subsidiary Aegis Group. Chief executive Michelle
Norman. 65% quantitative, 17% qualitative, 6% continuous/syndicated,
2% mystery shopping, 10% other. www.synovate.com
Founded 1973. Subsidiary WPP. Chief executive Julian Bond. No work
breakdown given. www.research-int.com
Founded 1933. Subsidiary WPP. Chairman Andy Brown. No work breakdown
Founded 1992. Subsidiary Information Resources Inc. Chief executive
Scott Klein. No work breakdown given. www.infores.com
Founded 1985. Subsidiary WPP. Chairman Rod Banner. No work breakdown
5 Cello Group**
Founded 2004. Publicly quoted. Chief executive Mark Scott. 56%
quantitative, 41% qualitative, 3% continuous/syndicated.
6 Harris Interactive
Founded 1993. Subsidiary Harris Interactive Inc. President George
Terhanian. 70% quantitative, 20% qualitative, 10% other.
Founded 1989. Subsidiary Creston Group. Managing director Nick
Sparrow. 66% quantitative, 14% qualitative, 18%
continuous/syndicated, 1% mystery shopping, 1% other.
8 Hall & Partners Europe
Founded 1991. Subsidiary Omnicom. Chief executive Vanella Jackson.
60% quantitative, 40% qualitative. www.hall-and-partners.com
Founded 1988. Subsidiary Media Square. Chief executive John
Connaughton. No work breakdown given. www.illuminas-global.com
Founded 1988. Subsidiary WPP. Chief executive Lucy Richardson. No
work breakdown given. www.added-value.com
10 ORC International
Founded 1972. Subsidiary Info USA. Managing director Richard
Cornelius. 72% quantitative, 7% qualitative, 2% mystery shopping,
19% other. www.orc.co.uk
11 Maritz Research
Founded 1991. Subsidiary Maritz Research Inc. Managing director
Stephan Thun. 20% quantitative, 5% qualitative, 55%
continuous/syndicated, 20% mystery shopping. www.maritzresearch.com
Founded 1991. Privately owned. Chief executive Cris Tarrant. 23%
quantitative, 16% qualitative, 47% continuous/syndicated, 14%
mystery shopping. www.bdrc.co.uk
Founded 1997. Subsidiary Omnicom. Managing director Maggie Collier.
85% qualitative, 15% other. www.flamingo-international.com
13 HPI Research
Founded 1978. Privately owned. Chief executive David Iddiols. 60%
quantitative, 40% qualitative. www.hpiresearch.com
14 Research Now
Founded 2000. Privately owned. Managing director Andrew Cooper. 100%
Founded 1996. Privately owned. Chief executive Clare Bruce. 50%
quantitative, 30% qualitative, 20% other. www.nunwood.com
16 Marketing Sciences
Founded 1977. Subsidiary Creston. Managing director Keith Bates. 91%
quantitative, 8% qualitative, 1% mystery shopping.
17 Quaestor Research
Founded 1986. Subsidiary Eq Group. Managing director Bob Bond. 29%
quantitative, 33% qualitative, 27% continuous/syndicated, 3% mystery
shopping, 8% other. www.quaestor.co.uk
Founded 1994. Privately owned. Chairman Jon Priest. 59%
quantitative, 38% qualitative, 3% other. www.spa-mr.com
19 2CV Research
Founded 1989. Privately owned. Chairman Vincent Nolan. 27%
quantitative, 72% qualitative, 1% other. www.2cv.co.uk
Founded 1972. Subsidiary Munro Global. Managing director Charlotte
Cornish. No work breakdown given. www.fds.co.uk
Founded 1986. Subsidiary WPP. Joint managing directors Cara Berry,
Moniah Stubbings. No work breakdown given. www.bprigroup.com
21 Conquest Research
Founded 1989. Privately owned. Managing director David Penn. 90%
quantitative, 10% qualitative. www.conquestuk.com
Founded 2000. Publicly quoted. Managing director Panos Manolopoulos.
81% quantitative, 4% qualitative, 10% continuous/syndicated, 5%
23 Business Research Group
Founded 1991. Privately owned. Chief executive Don Wildey. 80%
quantitative, 10% qualitative, 8% continuous/syndicated, 2% other.
Founded 1977. Subsidiary Genus. Managing director Richard Wood. No
work breakdown given. www.promar-international.com
Henley Centre HeadlightVision*
Founded 1996. Subsidiary WPP. Managing director Sarah Davies. No
work breakdown given. www.hchlv.com
24 Network Research & Marketing
Founded 1987. Privately owned. Managing director Virginia Monk. 17%
quantitative, 3% qualitative, 80% continuous/syndicated.
25 Snap Surveys
Founded 1981. Privately owned. Chief executive Peter Wills. 100%
26 Grass Roots UK
Founded 1980. Privately owned. Managing director Rik Burrage. 19%
qualitative, 81% mystery shopping. www.grassroots.uk.com
Founded 1988. Privately owned. Managing director Rob Sheldon. 45%
quantitative, 34% qualitative, 13% continuous/syndicated, 5% mystery
shopping, 3% other. www.accent-mr.com
Founded 2000. Privately owned. Managing directors Jem Fawcus, Alison
Fydler. 2.5% quantitative, 97.5% qualitative. www.firefish.ltd.uk
Millward Brown Ulster*
Founded 1965. Subsidiary WPP. Managing director Richard Moore. No
work breakdown given. www.ums-research.com
29 Buckingham Research Associates
Founded 1987. Subsidiary Eq Group. Managing director Tony Isaacs.
70% quantitative, 15% continuous/syndicated, 15% other.
Founded 1989. Privately owned. Chief executive Sandra Macleod. 93%
quantitative, 7% qualitative. www.echoresearch.com
31 Swift Research
Founded 1985. Privately owned. Managing director Alison Flannery.
77% quantitative, 6% qualitative, 15% continuous/syndicated, 2%
mystery shopping. www.swift-research.co.uk
Founded 1997. Subsidiary Morpace International. Managing director
Mick Nagle. No work breakdown given. www.morpace.co.uk
32 Retail Eyes
Founded 2003. Privately owned. Chief executive Tim Ogle. 5%
quantitative, 4% qualitative, 91% mystery shopping.
33 Kadence (UK)
Founded 1992. Subsidiary Kadence International Business Research
Group. Privately owned. Managing director Kieron Mathews. 80%
quantitative, 20% qualitative. www.kadence.com
Founded 1997. Privately owned. Managing directors Elizabeth High,
Misia Tramp. 50% quantitative, 50% qualitative.
Founded 2000. Privately owned. Managing directors Caroline Plumb,
Charlie Osmond. 60% quantitative, 25% qualitative, 10%
continuous/syndicated, 5% mystery shopping. www.freshminds.co.uk
Founded 1994. Privately owned. Managing director Alison Bainbridge.
19% quantitative, 24% qualitative, 27% continuous/syndicated, 27%
mystery shopping, 3% other. www.abaresearch.co.uk
37 Jones Rhodes Associates
Founded 1978. Privately owned. Chairman Terry Wagstaff. 81%
quantitative, 14% qualitative, 5% other. www.jrareseach.com
Founded 1987. Subsidiary Loewy Group. Managing director Andrew
Sawkins. 45% quantitative, 55% qualitative. www.prescientuk.com
Founded 1982. Subsidiary Creston. Managing director Jerry Thomas.
100% quantitative. www.msts.co.uk
40 20/20 Research
Founded 1996. Privately owned. Managing director Bob Peters. 55%
quantitative, 10% qualitative, 35% continuous/syndicated.
41 The iD Factor
Founded 2002. Subsidiary TMN. Managing director Paul Dixon. 100%
42 Market Measures
Founded 1986. Privately owned. Managing director Phil Gurd. 95%
quantitative, 5% qualitative. www.marketmeasures.co.uk
43 Consumer Profile
Founded 1987. Privately owned. Chief executive Peter Lovett. 78%
quantitative, 22% qualitative. www.profile-group.com
44 Progressive Partnership
Founded 1985. Privately owned. Managing director Mark Cuthbert. 50%
quantitative, 40% qualitative, 10% continuous/syndicated.
45 Brand Driver
Founded 2001. Privately owned. Managing director Karen Wise. 52%
quantitative, 48% qualitative. www.branddriver.co.uk
Albemarle Marketing Research*
Founded 1968. Subsidiary Publicis Groupe. Managing director Peter
Zoutis. No work breakdown given. www.a-m-r.co.uk
Founded 1984. Privately owned. Chief executive Charles Michaelis.
80% quantitative, 20% qualitative. www.data-build.co.uk
47 Charterhouse Research
Founded 2004. Privately owned. Managing directors Julie Irwin, Mark
Dennis, Sara McFadzean, Mervyn Flack. 44% quantitative, 34%
qualitative, 21% continuous/syndicated, 1% mystery shopping.
Founded 1993. Privately owned. Managing director Gordon Aitken. 45%
quantitative, 35% qualitative, 20% other. www.rcu.co.uk
49 Survey Solutions
Founded 1995. Privately owned. Managing director Miles Couchman. 55%
quantitative, 25% qualitative, 15% continuous/syndicated, 5% mystery
Founded 2001. Privately owned. Chief executive Lisa Hart. 56%
quantitative, 44% qualitative. www.acritas.com
Founded 1983. Privately owned. Managing directors John Morgan, Julie
Hanson. 40% quantitative, 40% qualitative, 5% mystery shopping, 15%
52 Spring Research
Founded 2003. Privately owned. Managing director Stephen Phillips.
45% quantitative, 55% qualitative. www.springresearch.co.uk
53 IRN Research
Founded 1991. Privately owned. Chairman Gary Giddings. 79%
quantitative, 20% qualitative, 1% other. www.irn-research.com
TOP FIVE FOR GROWTH - BIG AGENCIES
Agency Turnover (pounds) chng
2006 2005 (%)
1 Research Now 7,951,000 3,639,000 118
2 Cello Group 30,964,631 16,105,071 92
3 BDRC 9,260,000 6,279,000 47
4 Banner Corporation 31,782,613 23,129,564 37
5 Hall & Partners Europe 16,300,000 12,900,000 26
TOP FIVE FOR GROWTH - SMALL AGENCIES
Agency Turnover (pounds) chng
2006 2005 (%)
1 The iD Factor 1,910,000 1,007,000 90
2 YouGov 5,500,000 2,942,000 87
3 Retail Eyes 3,084,286 1,703,023 81
4 ABA 2,390,390 1,559,221 53
5 Progressive Partnership 1,744,758 1,144,384 52