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Size and scale matters:  The larger companies get bigger – the smaller players linger on

The top 100 Information Industry companies grew faster than the market as a whole, posting an impressive 8% growth, compared to the industry average of 2.9%.  When one compares the growth of the largest 100 companies with the average one-year growth of their segment peers, the vast majority of top 100 companies grew at a faster rate than their segment counterparts.  Clearly, size and scale matter in the Information Industry in driving growth.

Public companies outperformed the overall top 100 and the Information Industry in each year from 2007 to 2011. The market volatility of 2009 took a toll on publicly held companies, dropping their growth below that of private and non-profit companies for the first time this decade. In 2011, public companies rebounded and once again posted growth three times higher than their privately held competitors.

Preliminary estimates show that the Information Industry grew 2.9% in 2011 to $462 billion, compared with 0.6% growth in 2010.   The strongest growth was experienced in the Search, Aggregation & Syndication (SAS), Market & IT Research (MITR), and Company Information segments of the market. In keeping with the reduction in print, News Providers & Publishers experienced the most downturn, with a 7.0% decline in 2011.

The largest 10 companies are (by rank):  

Google, Thomson Reuters, Reed Elsevier, Bloomberg, Pearson, News Corporation, The McGraw-Hill Companies, The Nielsen Company, Wolters Kluwer, Yahoo! Inc.

The next 10 largest companies are:  The Asahi Shimbun Company, The Yominuri Shimbun, AT&T, Inc., WPP-Consumer Insight, Gannett Co., Experian plc, Daily Mail & General Trust,  IDG, Nihon Keizai Shimbun (Nikkei), John Fairfax Holdings Ltd.

Moody’s # 23, D&B Corporation # 36 and Equifax # 45

Company Information segment generated $4.4 billion in revenues and represented 1% of the total Information Industry. The Credit & Financial Information market segment grew an estimated 4.0% in 2011.  With the exception of 2009, the Credit & Financial segment performed as well as or better than the overall Information Industry and global GDP

Outsell Recommendations:

Target Emerging Markets

Geographic diversification remains a key component to growing market share with US-centric players in segments such as E&T and News significantly lagging behind their internationally diversified counterparts. Across the industry, players are expanding by tapping into emerging economies. Smart information providers that have saturated home markets will contend in these evolving areas to establish broader dominance, especially in the Asia Pacific and Latin American regions. Smart players will actively develop partnerships and alliances to gain entry to restricted markets. 

BIIA editorial comment: In the Credit & Financial Market Segment two examples make the point:  Experian successfully entered Brazil and Colombia with acquisitions lifting growth substantially.  The Dun & Bradstreet Corporation re-acquired its Australian and Indian franchises lifting its international presence significantly.

Get to Grips with Big Data

Big data – the set of capabilities and resources that allows one to manage, analyze, and extract value from web-scale datasets – is everywhere discussed. That’s because it represents a fundamental new way of economic value creation. Admittedly much of the value created will accrue to consumers, but as with disruptive innovation, act first or be on the bottom of the pile. Where to start? The whole senior management team needs to be up to speed on the scale and reach of the opportunity. HR planning will be important, with a definite risk of a talent war for data scientists and engineers erupting, similar to that last seen in the dot-com boom. Beyond the core need for computer and data scientists will be a larger and probably longer term gap for managers who understand and exploit the opportunities of big data.

Invest in Web and Customer Analytics

Publishers and information providers have a gold mine of opportunity in their audiences, whether large and broad or small and nichy. Using a combination of profile data and analytically derived data is the key, although with privacy sensitivities.

Capturing a larger share of and premium rates for advertising spending and subscription revenue requires a comprehensive commitment by publishers to analytics and the platforms and skills required to deliver them. Advertisers respond to analytics that demonstrate the ROI of the advertising and marketing dollars they are spending with publishers. Subscription services can be continually upgraded when closely matched to user intent and needs made visible by analytics. Analytics needs to be staffed and funded consistent with their future impact on revenue and profit.

Copyright:  Outsell Inc.

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