In the Numbers: Market Research in the US Industry Research Report from IBISWorld has Been Updated

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Clients use market research companies to gather information about target markets and customers. During the recession, companies cut research, development and marketing budgets in order to reduce costs. At the same time, a shaky labor market and an uncertain economic climate have caused consumer spending to fall, particularly on discretionary and big-ticket items. As the economy continues to recover and corporate profit improves, the industry has returned to growth. In the five years to 2017, more changes in media consumption habits will occur, with operators shifting their focus toward social and mobile media. These factors will provide a platform for further growth to industry firms. For these reasons, industry research firm IBISWorld has updated a report on the Market Research industry in its growing industry report collection.

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Reduced R&D budgets and low consumer spending hurt demand for industry services

Unfortunately for the Market Research industry, many businesses changed their focus from growth to survival during the recession, subsequently cutting research, development and marketing budgets to reduce costs. “A shaky labor market and an uncertain economic climate prompted consumers to cut back on spending, particularly on discretionary and big-ticket items,” says IBISWorld industry analyst Kevin Culbert. “Because makers and sellers of consumer goods are major users of market research, reducing investment on developing new products was particularly detrimental to industry players.” Additionally, many businesses shifted their focus to retaining existing customers rather than acquiring new ones. These factors have hampered industry revenue growth, allowing for only a marginal annualized increase of 1.5% to $19.2 billion in the five years to 2012. IBISWorld estimates revenue will grow 3.1% in 2012, bolstered by rising client marketing budgets, the 2012 presidential election and the Summer Olympics.

Although profit margins are expected to rise in 2012 as demand grows, operating margins fell during the recession as firms offered their services at discounted prices to retain clients. “As profit margins declined, some firms were forced to leave the industry, while larger companies acquired others,” Culbert says. “Major advertising agencies have increasingly acquired market research firms as they pursued value-added services in complementary industries.” For example, WPP's Kantar Group merged with TNS to form the second-largest player in the industry in 2008. And Ipsos, another top industry player, moved up the rankings and increased its market share after acquiring Synovate in 2011. As a result of these acquisitions, the number of market research firms has increased only marginally in the five years to 2012 to total 33,581. The Market Research industry’s other leading company is The Nielsen Company, which operates under Nielsen Holdings NV. The industry is structured around a few major national (and international) firms, a large number of regional firms and many small and sole practitioners. Sole practitioners are often experienced industry professionals who do consulting based work and can be sub-contracted by larger players to provide specialist insights or skills.

In the five years to 2017, changes in media consumption and increased use of social media and mobile devices will revolutionize traditional ways of conducting market research. Industry players will need to adapt services to reflect this shift to better understand the complexity of consumers' purchasing behavior. Furthermore, major players will continue to expand internationally to offer valued-added services to a larger client base. As consumer spending and corporate profit increase, businesses will start investing in market research again, allowing industry players to increase prices for their service, promoting profit growth. Altogether, these factors will provide a platform for moderate revenue growth over the next five years. For more information, visit IBISWorld’s Market Research in the US industry report page.

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IBISWorld industry Report Key Topics\

Firms in this industry systematically gather, record, tabulate and present marketing and public opinion data.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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