200 for 2000: Top 20 Market Research Agencies - Research sector takes world view - The demand for an international perspective and the rising costs of research are fuelling consolidation in this sector, to benefit from the economies of scale and global re

The advertising-to-PR communications group WPP is a bit like

Procter & Gamble - it prefers to keep its name in the background, and

let its brands be the stars. Now it appears to be harnessing its

corporate strength in market research, in a strategy change that could

be of major significance to the international industry.

In the UK, Taylor Nelson Sofres is the largest single research company,

but it is comfortably outgunned when WPP’s subsidiaries, Research

International, Millward Brown and BMRB are added together. With its

other research interests taken into account, such as Goldfarb

Consultants in the US, WPP ranks third in the world behind ACNielsen,

and the healthcare research specialist IMS Health, with Taylor Nelson

fourth. Research currently accounts for a fifth of WPP’s total

revenue.

So why change something that appears to be working well? The answer lies

in the race to establish fully effective global services and in the

substantial resources needed to for many research techniques.

Five years ago, the group bundled its research interests into a new

holding company, Kantar.

’It started as a simple holding company, designed so that just one

person reported on market research to the WPP chairman, Martin Sorell,’

confirms Kantar chief executive David Jenkins. ’But our role is evolving

as the marketplace evolves. We need to be punching our weight.

’The entry cost for developing a new market research service is much

higher than it was and that is the big structural change. It’s no longer

a case of having a bright idea and executing it via ladies with

clipboards.

Doubling up

’Our major companies have their own identities and branded products, and

often have to pitch against each other. It is in the backroom investment

areas where we can use our leverage.’

There are three examples where Kantar can be seen to be taking a more

influential role. First, at the start of last year, it launched Kantar

Media Research, dedicated (according to WPP’s annual report) to

’becoming the global provider of a full range of media research

services, TV audience measurement, print and multimedia measurement, and

software’.

Second, it has bankrolled BMRB to speed up the global roll-out of Target

Group Index (TGI), a service well known to UK advertisers and agencies,

and already established in the US and a few other countries. Last month,

it held near-simultaneous launches in Germany, France, Spain, Brazil,

Argentina and Colombia.

’TGI has to meet the needs of local advertisers and agencies,’ says

Richard Silman, BMRB’s managing director. ’But gradually clients have

been talking to us about using the product regionally, or preferably

globally. What has pleased us is the number of clients who have signed

up even before the release of data.’

Net rivalry

Finally, Kantar is involved in a major internet initiative. Research

International has already released some details of plans to build a huge

panel of 200,000 internet users in the US, even supplying PCs to some

households, to ensure it achieves a properly balanced sample. The

concept is to be run out across Europe and the Pacific and, it’s

claimed, could compete aggressively with much telephone research on cost

and speed.

Now it looks as though the project could press ahead under the Kantar

name. That’s not just because of the cost but because Jenkins is anxious

to avoid the separate companies in the group duplicating investment.

’Everyone is dabbling in internet research at the moment and we are

right in the middle of deciding what is the best thing to do,’ he

says.

The internet is a big issue for many of the leading research

companies.

Among many examples, Ipsos RSL and GfK have established a partnership

with the leading US specialist Media Metrics. They’ll establish a panel

of internet users who have agreed to have software installed on their

computers, tracking which web sites they visit.

MORI, meanwhile, claims that the internet and new media are its fastest

growing business sectors. It has set up a new division, e-MORI, focusing

on all the electronic technologies. Last month, it launched a suite of

services, including e-public, which is claimed to be Europe’s first

on-line internet access panel. In time this will have 10,000 members,

who will be rewarded with beenz - the web currency - for participating

in surveys.

Taylor Nelson Sofres has signalled its serious intentions by telling

investors it plans to increase its internet R&D budget by 50% next year,

to 3% of its global revenues, or about pounds 11m. Its income from

internet research this year is expected to be about pounds 8m, and is

growing fast.

’We are responding to an inevitable change in the way information is

collected, delivered, and moved between individuals,’ says chief

executive Tony Cowling.

’It is not difficult to understand how, as a tool of the trade, it will

save large amounts of money. We have to do this, just like any other

company.’

The group is involved with the internet on three fronts. It is using it

as a marketing tool to promote itself, and as a means of delivering data

to clients. It is competing with others to set up panels for collecting

research information. And, because it is a major player in measuring TV,

radio and press around the world, it is involved in measuring the

effectiveness of web advertising.

Cowling is cautious about ultimate growth prospects in this sector,

however.

He points out that measuring TV is a dollars 650m-dollars 700m (pounds

450m) international market, accounting for 5%-6% of all market research.

Even if web advertising eventually catches up with television

advertising, the data will be cheaper to collect. ’We find it hard to

assess how big a market this will be.’

Not that Taylor Nelson is totally obsessed with the internet. This

summer’s purchases have included WHF (Southern), which was the largest

independent mystery shopping specialist in our league tables, lying

fourth behind NOP, Research International, and Maritz/TRBI.

NOP dominates this particular UK market, with a turnover from mystery

shopping three times as great as that of its nearest rival. However, its

ambitions to take its expertise across Europe have been hampered by its

lack of a pan-European network.

As a first step to remedying this, it announced a collaborative

partnership with the French research company, MV2 Conseil. The leading

US mystery shopping supplier, Shop ’n Chek, is similarly reported to be

developing Continental ties.

Single sources

Once again it underlines the importance that research companies now

place on the international aspects of the market. Hard-pressed marketing

departments don’t want too many agencies to deal with and, if one

research company can provide global data compiled with a common

methodology, that will do very nicely, thank you.

Takeovers continue on the world scene at a startling pace, and there

certainly isn’t space to detail them all here. One worth mentioning,

however, was the recent acquisition by US-based Opinion Research

Corporation International of another US company, Macro, which

specialises in public-sector research.

The acquisition had the affect of pushing ORC several places up the

international research league table. However, the reason for singling it

out is that it illustrates how research agencies seek to wring maximum

benefit from such deals.

ORC International in London already has a major interest in public

sector work (see panel). ’These are fairly early days, but we are

exchanging ideas with Macro and placing some of their staff in our

Islington office, to see how our shared skill base might open up

opportunities within the European Union,’ says UK managing director

Nigel Maxfield.

Similarly, Infratest Burke and BJM have both been acquired by the US

group NFO Worldwide relatively recently. Infratest Burke has launched an

NFO brand equity tracking product, Market Mind, in the UK.

It is also talking to BJM about whether some of its research products

and areas of expertise are appropriate for its sister company’s client

base and vice versa. ’There is a lot going on,’ says chief executive

Stephen Factor.

To conclude this roundup, it is interesting to note that The Research

Business International, one of the UK’s leading specialists in

qualitative research, has reported netting some major contracts, which

should start to show through in next year’s results.

Bought by Maritz, and now part of Maritz TRBI, it lost some senior

directors who enjoyed a high profile in the industry, like its former

chairman, Wendy Gordon, and business plateaued.

However, it recruited Janet Kiddle, former executive planning director

at Team Saatchi, two years ago to join its international qualitative

research division. She took over as managing director in April.

’We have certainly stopped the retrenchment that was happening,’ she

says, ’and we again have stable management at the top, which is reaping

benefits. We have also moved our offering on, evaluating web sites,

expanding our financial services division, and setting up a specialist

healthcare unit, which is a big step forward.’

Top 20 Market research agencies

Rank  Consultancy              Turnover               %  Staff  % of t/o

                                   1998    1997  change        conducted

                             (pounds m)                         overseas

1     Taylor Nelson Sofres        96.55   87.73   10.05   1321        22

2     NOP Research Group          73.77   67.43    9.40    582        25

3     Research International      62.33   52.43   18.88    432        47

4     Millward Brown Int’l        55.62   47.91   16.09    496        42

5     BMRB International          31.82   29.11    9.32    360        17

6     Ipsos-RSL                   28.93   25.75   12.37    300        19

7     MORI                        19.62   18.19    7.86    216        12

8     Information Resources       19.57   17.02   15.02    342         0

9     Maritz/TRBI                 19.28   18.69    3.19    211        54

10    The MBL Group               15.97   15.08    5.85    152      39.6

11    Infratest Burke Group       15.84   14.02   13.01    194        12

12    Martin Hamblin Group        12.12   11.16    8.61    128      44.8

13    GfK Marketing Services      11.86   11.14    6.42    198         0

14    Simon Godfrey Assoc          9.08    8.48    7.03     40        57

15    ORC International            8.66    8.61    0.52    110        27

16    Isis Research                 8.6     6.6   30.30    120        90

17    The Added Value Company       7.2    5.57   29.29     97        50

18    DRSM Group                    6.8     5.8   17.24     51        50

19    Insight Medical Research     6.56    5.19   26.50     45        60

20    Total Research               6.51    5.31   22.47     60        85

METHODOLOGY

Ranking of the top 20 market research companies is by turnover. Many

research companies specialise, however, either in particular market

segments such as healthcare or advertising, or in the use of particular

techniques, such as quantitative or qualitative.

Because ’qual’ research does not require the same level of investment as

major ’quant’ surveys or tracking studies, qualitative specialists are

under-represented in the top 20. More details about this sector, and

other areas of specialism such as mystery shopping or telephone

research, can be found in the full market research league table on the

Marketing web site (www.marketing.haynet.com).

PUBLIC-SECTOR BOOM

Public-sector research, including government services and local

authorities, is reckoned to be one of the boom areas in market

research.

Ben Page, who heads MORI’s public sector division, acknowledges that it

is accelerating, although he criticises the popular media for suggesting

it is a new phenomenon.

There are new aspects to it, however, including the People’s Panel,

which is claimed to be a world first. Run by MORI for the Cabinet

Office, it quizzes 5000 consumers on a regular basis about how

government services are performing and could be improved.

But Page points out a lot of interesting work is also being done by

local authorities. New ideas include People’s Juries, in-depth

examinations of issues in which a panel of consumers can summon and

cross-examine officials, examiners and local MPs. ’As an exercise in

engagement, this has something to teach the private sector.’

Infratest Burke’s Scottish subsidiary, System Three, is benefiting from

a surge in work relating to the new Scottish Parliament, while ORC

International has won a five-year contract from the Employment Service

to monitor staff attitudes.

This article was first published on Marketing