UK market research sector worth £3bn

10 October 2012

LONDON: The market research industry is worth some £3bn annually in the UK, with the rise of digital channels and data analytics promising significant scope for future growth, a study has argued.

According to the Market Research Society, the trade body, and PricewaterhouseCoopers, the advisory network, the sector generates between £2.6bn and £3bn in "Gross Value Added" (GVA) every year.

This metric takes the value of goods and services, and subtracts the cost of materials and other "inputs" used to produce them. For market research, it largely covers profits and salaries.

Overall, the £2.6bn–£3bn estimate was 50% higher than previous totals, and meant the "research and evidence" category delivered 0.2% of GDP, equivalent to newspaper publishing and core film industries. It is also greater than the music and radio industries.

Moreover, £1bn is attributable to work for foreign clients. "This is a business that is both creative and one which generates intellectual capital for the country," said Jane Frost, CEO of the Market Research Society.

More specifically, the study said "traditional providers" – defined as full-service research firms that collect, process, analyse and interpret information – employ 39,600 full-time staff, and add £1.8bn in gross value.

"Information is no longer power; the web makes it available to all. Understanding it is critical," said Sir Martin Sorrell, CEO of WPP Group, the agency holding company. "Data and the application of technology to our business are increasingly part of WPP's strategy, along with new markets and new media."

Elsewhere, the analysis suggested that 8,800 people are employed in a similar capacity for private sector operators, with these in-house departments yielding a GVA of £486m per year.

Firms in the food and beverage, media, financial services and IT, telecoms and consumer technology segments were reported to deliver 40% of total research spending, with all other categories on 43%.

Data analytics, a field set to witness rapid growth, currently has an annual turnover of £360m–£460m when considering creating capabilities, solving problems and providing on-going services.

"A new world of 'big data' is being led by insights developed in the wider evidence market," said David Armstrong, a partner at PwC. "This is a world away from the old stereotypes of clipboard surveys and focus groups."

The study assessed the latter two areas, with 1,000–1,400 staff and a £120m–£170m turnover. Their estimated GVA was £75m–£107m, although this was somewhat "conservative" as it excludes in-house staff, such as those employed by brand owners.

Central and local government bodies together account for 17% of market research expenditure. In combination, these sectors employ 1,870 to 4,300 people, and yield a GVA of £112m to £321m.

Data sourced from Market Research Society; additional content by Warc staff