Roy Morgan loses millions; Single Source hardest hit

Sarah Homewood
By Sarah Homewood | 28 May 2015
 

Research company Roy Morgan has lost millions of dollars in the 2013/2014 financial year, with the businesses research database, Single Source, being the hardest hit.

According to documents lodged with the Australian Securities and Investments Commission (ASIC), Roy Morgan has lost $7.85 million in the financial year ending June 2014. In the breakdown of the losses, its total sales revenue fell to $54.1 million from $58.7 million in 2013. The revenue for the businesses Single Source data set fell to $26.5 million from $33 million in 2013. The results for FY 2015 are currently not available.

Customised Research revenue was up however, growing to $27.6 million from $25.7 million in 2013.

In 2013 Roy Morgan was in the black to the tune of $303,000. CEO of the business Michele Levine, noted in the report of the financials that the business witnessed the decline of traditional market research activities and diminishing revenue from the publisher market.

Speaking with AdNews, Levine said traditional research businesses have been challenged by several forces, for some time.

“DIY alternatives like web surveys and Survey Monkey; Panel and Sample providers; Big data and data integration etc. The political situation, i.e the budget that has not been passed, has meant that there are many Federal Government surveys on hold. The economic situation has seen many companies hold off on research expenditure,” Levine said.

“Many research companies have either shut down, been bought by other businesses or merged with bigger players.”

A reason for Roy Morgan's declines during the 2013/2014 FY could be linked to the newspaper publishers forming their own metric, Emma, seeing them pile out of Roy Morgan.

“The newspaper publishers joined together to create a competitive readership survey (Emma) and those same newspaper publishers stopped subscribing to our service,” Levine said. “Magazines continued to subscribe as did all media agencies – but there is no question losing a whole industry like newspapers hit our revenue and profit lines,” Levine said.

At the time of launch there was much speculation about if there would be room for two players in the market and while Ipsos, the research firm behind Emma, doesn't break out in detail its Australian results, in its half yearly report ending in June 2014, Ipsos reported that its Asia-Pacific revenue fell 5.2% in the first half of 2014 compared to the prior year. Ipsos cites however, that the bulk of this fall was caused by currency movements. Ipsos reports that organic growth was 2.5% for this region. 

In Roy Morgan's financials Levine explains that the business has reinvented itself many times, and that the company is continuing to invest in new products and business lines to future proof its business.

The business is hoping for the pay-off of its Helix Personas data offering, which it describes as “the e-harmony of big data”. Most recently businesses like data platform AdNear, outdoor business AdShel, as well as Yahoo7 signed up to Helix Personas.

“The digital business of Roy Morgan Research is built on the powerful data asset of Roy Morgan Single Source. While our traditional revenues are expected to be flat, the digital business is anticipated to overtake the revenues of our traditional business over the next three years,” Levine explained.

“Over the last 12 months, we have announced several major partnerships in the digital space including Tipstone, REA, AdNear, Signal, Eyeota, Inivio, Greater Data, MCN and Yahoo. There are more that can’t yet be made public that will reset the agenda totally – and which we anticipate will drive our revenue and profit lines.”

Levine explained that Roy Morgan is the key source of targeting information for programmatic digital media buying in Australia.

“Over 70 years of operation we have transformed ourselves many times. Ours is a history of innovation and firsts and the company continues to invest in new products and business lines to future proof the business," she said.

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