The plethora of new venues expanded the industry's reliance on the telephone, street-corner chats and mailbox surveys while helping push up U.S. research revenues 14.6% to $4.86 billion for the 100 Leading Research Companies in 1998, according to this 24th annual Advertising Age report. That score tops the previous decade high 12.2% set in 1997.
Researchers also are finding the work leading them elsewhere: This same group of research companies pushed non-U.S. totals to $3.33 billion, up 8.3%.
IMS Health leads the field, with revenues of $412.3 million. The company, a source of pharmaceutical and healthcare marketing information, also ranked second in non-U.S. returns, at $671.7 million, behind ACNielsen Corp., at $1.04 billion, down 4.3%.
Second in the U.S. was Nielsen Media Research, New York, at $401.9 million, up 12.1%, holding off Information Resources Inc., at $397 million, up 8.3%. ACNielsen was fourth in the U.S. at $390.4 million. ACNielsen, Nielsen Media Research and IMS Health are late-1996 spinoffs of Dun & Bradstreet.
DRIVEN BY CLIENTS
To meet the increasing global needs of clients, research companies are buying others to support their consulting and information-gathering operations.
"Acquisitions must be driven by the needs of clients," says Nicholas L. Trivisonno, chairman-CEO of ACNielsen Corp., noting "all clients have different global, regional and local needs.
"To be considered [by ACNielsen] for acquisition, a company has to have either proprietary products and services or a unique process."
ACNielsen in 1998 bought full ownership of Amer Nielsen Research, its joint venture with Cyprus-based Amer Worldwide. The acquisition also gave ACNielsen 49% of Amer's business in the Middle East and North Africa.
Additionally, ACNielsen purchased BASES Group in 1998 and Entertainment Data Inc. in 1997. A major BASES research product is a simulated test-marketing scheme that gives packaged goods marketers a pre-launch prediction of product success.
EDI offers overnight ticket-sale reports, a service now covering more than 45,000 movie screens in 11 countries. Under ACNielsen, the service has expanded to Mexico and Australia.
Leader in sheer number of acquisitions is NFO Worldwide, which added seven companies in 1998 -- 23 throughout the 1990s.
The focus of its acquisition policy is to select research specialties with global reach, says VP D.J. Gorman. For example, the company picked up Migliari-Kaplan, a specialist in healthcare, and PSI Global and Spectrem, both with financial services expertise.
Opinion Research Corp. added ProTel Marketing and is buyingMacro International. Macro, which does 70% of its business with the federal government, also applies its population sampling techniques -- by aerial photography if necessary -- to gather data in remote areas of Africa, Asia and the Pacific.
Aegis Group, London, which specializes in media communications, is adding Market Facts, which has been busy acquiring researchers in its own right, buying since 1997 five companies.
Globalism is a two-way oper-ation as big European researchers move into the U.S.
Taylor Nelson Sofres Intersearch is the current company that began as French company Sofres, which purchased Intersearch Corp. in early 1997. Later that year, it merged with U.K.-based Taylor Nelson, and then returned stateside to acquire Chilton Research Services last May.
United Information Group, a market research and information unit of London-based United News & Media, bought Audits & Surveys. "We operated a number of research companies in the U.S. [prior to Audits & Surveys acquisition]," says CEO Jim Rose, "but we wanted to add a full-service arm to really expand our critical mass."
U.S. expansion is on the mind of Canada-based Angus Reid Group, which grew 112.5% in U.S. revenue in 1998. It will open an office in San Francisco in addition to London, Singapore and Sao Paulo, says Chairman-CEO Angus Reid. ARG runs a poll of 25,000 respondents in 50 countries that is used by Turner Broadcasting.
The biggest revenue producers for researchers are sales tracking, database development and analysis and media measurement.
Media managers are regulars at the research counter every morning to get perhaps the hottest of all research products, ratings covering TV, radio, print and the Internet.
Nielsen Media Research allied itself with NetRatings in 1998 (creating Nielsen NetRatings) to better measure the Internet, the importance of which is sure to grow as convergence takes place between computers, TV, and the Internet.
The InfoStream service of Arbitron Co., the veteran radio-measurement company, late in '99 will measure the live broadcasting of audio streaming on the Internet coming from five radio networks. Visual streaming is slated for early 2000.
It is estimated that radio streaming is a growing use of the Internet: 27% of the 70 million Internet users have listened to radio on the Internet this year, up from 18% last year, says Greg Verdino, VP-general manager of Internet Information Services Division, the Arbitron unit that monitors streaming.
This year's survey of the research business found 64.9% of the companies responding are conducting research on the Internet, and 77.7% are doing research about the Internet. Ad spending on the Internet doubled in 1998 to $1.92 billion, according to a study just released by Internet Advertising Bureau.
The Internet is "the same as telephone or mall interviewing," says Judith Corson, partner at Custom Research, Minneapolis, which has been in partnership with America Online affiliate Digital Marketing Services to conduct consumer research on AOL's Opinion Place Web site since 1997.
Consumer Insights, which handles product development research for automakers, turns to the Internet to communicate when the phone or mail doesn't work. It has found that academics and high-income people have gatekeepers like caller ID to protect their privacy. They can best be reached by e-mail.
Away from the rush of ratings, tracking and measurement, Roper Starch Worldwide, uses sociologists, psychologists and statisticians as interviewers to grasp the contributing forces behind child deaths from car accidents.
Westat is delving into causes of early childhood development and substance abuse for the U.S. Department of Education, somewhat removed from Westat's usual customer satisfaction studies done primarily for the federal government.
And finally, the heavily computerized research companies in this report