Grim Sentiments for 2009 Research Industry – ESOMAR Report

The world’s most authoritative report on the industry, the report compiled in cooperation with KPMG Advisory presents key statistics on the industry including market sizes, rankings, and breakdowns in terms of research spend by method and industry. It also provides qualitative insights on general trends through interviews with key opinion leaders in the industry.

The 2009 report actually covers the industry for the year 2008, but with some speculative outlook for 2009. In 2008, the global turnover for market research was estimated by the report to be USD 32.46 billion, of which Asia Pacific accounts for just 14% at 4.54 billion. It observed that Asia Pacific, which has often been the fastest growing region by 4-9% per annum, grew by only 2.1% in real terms (excluding inflation) from 2007 to 2008. Latin America is the only region showing higher growth than previous years by 5.6% in real terms.

Korea was the fastest growing markets in Asia, partly on account of greater outbound business as Korean corporations seek to further internationalize, but also growth in public sector research. The largest markets in Asia, Japan and Australia, saw increase in market research spend, but China’s growth has softened, partly it is claimed by moves to lower costs research such as on-line. However, the more interesting parts of the report covered speculation on how 2009 would turn out.

The results will only be known in the 2010 report expect this time next year, but it is almost certain that this momentous year of global recession will bring about the first ever fall in global market research spend since ESOMAR started these reports in 1988. Of those polled, 74% expect a decline in spend, versus 20% stating growth, and 6% no change. The level of decline globally is expected to be about 4%, although anecdotal feedback from the industry in Asia, suggest some markets might see a decline by as much as 15%.

The report also provides interesting commentary from key opinion leaders in the industry including investors such as Sir Martin Sorrell, justifying his USD 2 billion acquisition of TNS, and who expects a “recovery of sorts” in 2010. The report also gives insight from both the demand and supply-side of the industry. John Kearon who heads the high profile qualitative agency Brain Juicer, commented that the economic crisis is an opportunity because it forces you to change and be creative in coming up with new products and solutions. He goes on to criticize some of the larger agencies (people like doing that) for being too wrapped up in acquisitions describing this as a force against innovation as more effort goes into integration rather than innovation.

But a counter argument comes from Jan Kringal, Senior Insights Manager at Vodafone. Jan is unconvinced about some new methods commenting that too much innovation is going on in market research agencies, and that they are getting to far ahead of what clients really need. His argument being that using tried and tested methods often yields better results than playing around with new research methods simply for the sake of doing something new. Global Market Research 2009 is the 21st annual industry study undertaken by ESOMAR available at EUR 250.00 or EUR 50.00 for members. Visit www.esomar.org/web/publication