The Market Research, Reports & Services segment of the information market is predicted to reach $33.5 billion in 2008, and forecast to grow to $43.9 billion by 2011 with a 9.4% compound annual growth rate from 2008-2011. We expect to see a slight dip in growth in 2008 compared to 2007, to a 9.0% growth rate from 9.6% due to the economic turmoil.

Important Details: Outsell estimates that the Market Research, Reports & Services (MRRS) segment of the information market will be sized at $33.5 billion by the close of 2008, forecast to grow to $43.9 billion by 2011 with a 9.4% compound annual growth rate from 2008-2011. The top players in the MRRS segment include The Nielsen Company, IMS Health, TNS, WPP-Information, Insight & Consultancy, GfK AG, and Ipsos. In the first half of 2008 the MRRS segment continues to do well overall, with average 11.2% growth among the top 10 public companies for the first half of 2008. This is, however, lower than the 2007 growth of 13.9% for the same group of companies.

We expect the MRRS market to take a slight dip in 2008 compared to 2007, to a 9.0% growth rate from 9.6% as the markets adjust to economic turmoil. Weakness in the US market has been more intense so far in 2008 than in 2007, and we believe this condition will continue into 2009. Many of the top 10 players in this segment are international firms reporting in British pounds or Euros, so the positive impact of the currency exchange when calculating revenues in US dollars made the companies appear to grow faster in 2007. Many of these European firms do have US offices, and most of them are feeling the effects of slowness in the US market, but not to the extent that US firms with little international business are feeling it.

We expect the market to pick up again in 2009 because the underlying business fundamentals are strong and customers recognize the need to do research to weather the economic storm, especially in consumer markets. We see the market stabilizing for a few years with annual growth between 2009 and 2011 expected to be around 9.5%. Typical organic growth rates will range between 3-5%. The market research segment has historically held up well in economically difficult times, especially in comparison to other information segments.

Key trends include customers going global; continuation of mergers and acquisitions; and moving online for survey data collection. Online collection and measurement of data is driving new methods and standards, while social media and professional networking and web-based data are creating new product innovations. Demand for analytical insights is growing, "good enough" market research and polling is negatively affecting quality, and web-based primary data will put pressure on secondary research methods.

Implications: In spite of a rocky economy, the Market Research, Reports & Services segment of the market continued to hold up well in the first half of the year. As we head into the last quarter of 2008 the intensity of the economic storm has strengthened. Third quarter results are not out yet and we still have the year to finish off, but this segment of the market is not as heavily weighted to fourth quarter revenues as the IT & Telecom research segment. Given a strong first half, we expect the market to do well overall for the year.

In previous cycles of tough economic times, we have seen a shift from syndicated research to custom research projects in certain segments of the market. Most players are poised with syndicated offerings but able to do custom as well. This group of companies tends to weather the ups and downs of the economic cycles much better in comparison to the advertising funded businesses that are heavily impacted by declines of advertising budgets. Many of these market research firms track consumer media consumption and keeping track of changes becomes increasingly important during tough times, not less important.

We are currently forecasting decent growth over the next several years as the industry continues to benefit from strong growth in certain sectors such as web traffic measurement, social media market intelligence, and online market research panels. We offer more commentary on this market in our recently published Market Research and IT & Telecom Research, Reports and Services: 2008 Market Forecast and Trends Report.

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