AURA study reveals ‘bleak prognosis' for research spend

22 April 2009

Sixty percent of research buyers plan to ‘trim' budgets, says UK clientside body

UK-- The majority of research buyers are planning to trim their budgets this year, according to a survey by the Association of Users of Research Agencies (AURA).

AURA carried out an online survey in March, which found that 60% of research buyers were planning to reduce their budget this year with only 11% saying that they expected to see greater research expenditure in 2009 than in 2008.

Firms with an international presence were more likely to be spending less, with 94% of respondents expecting smaller outlays compared to 47% of purely UK-based companies.

The association said the results “revealed a bleak prognosis for those in the research industry” and dispelled rumours that the industry is “recession-proof”.

AURA chairman John Buckle said: “This survey is in line with many of the economic indicators that have both predicted and recorded the UK's entry into the current recession. Although it comes as no surprise, the indications are that it is only now that the true effects of the recession are hitting the research industry. Clientside researchers will be looking for yet more value from their suppliers as they attempt to stretch what will be tighter budgets.”

Stuart Butler-Smith, founder of business information provider ResearchRatings, noted an 8% drop in research spend during the first quarter of 2009. He said the results of the AURA survey “make a lot of sense”.

“Companies looked at results in Q1 and thought ‘Oh God'. Then they froze any new purchases and wanted cuts on existing procurement policies,” said Butler-Smith.

He expects to see spending declines level off in Q2 “when everything starts to calm down” before a quiet Q3 – due to holidays – and then a busy Q4, where spending will be linked to the FTSE's performance, he said.

Butler-Smith said the financial services sector, especially insurance, would be the first to “come out” of the recession, having been the first casualty (or cause) of the economic crisis. This tallies with results of the AURA survey, which found clients in the sector to be most optimistic, with 23% expecting increases in research spend this year. Sixty-three AURA members took part in the survey.

Author: James Verrinder

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