Od4559 online survey software industry report

WWW.IBISWORLD.COM Online Survey Software in the USMarch 2014 1
IBISWorld Industry Report OD4559
Online Survey Software
in the US
March 2014 Sarah Kahn
Filled out: Acquisitions will abound, as
industry demand continues to soar
2 About this Industry
2 Industry Definition
2 Main Activities
2 Similar Industries
2 Additional Resources
3 Industry at a Glance
4 Industry Performance
4 Executive Summary
4 Key External Drivers
6 Current Performance
8 Industry Outlook
10 Industry Life Cycle
12 Products Markets
12 Supply Chain
12 Products Services
13 Demand Determinants
13 Major Markets
14 International Trade
15 Business Locations
17 Competitive Landscape
17 Market Share Concentration
17 Key Success Factors
17 Cost Structure Benchmarks
19 Basis of Competition
20 Barriers to Entry
20 Industry Globalization
21 Major Companies
21 SurveyMonkey
23 Operating Conditions
23 Capital Intensity
24 Technology Systems
24 Revenue Volatility
25 Regulation Policy
25 Industry Assistance
26 Key Statistics
26 Industry Data
26 Annual Change
26 Key Ratios
27 Jargon Glossary
www.ibisworld.com | 1-800-330-3772 | info@ibisworld.com

This industry develops online survey
software for use in market research,
product testing and gathering information
on customer and employee satisfaction.
Online surveys ask respondents a list of
specific questions in order to gauge their
opinions. Results are then collated and
supplied to the author of the questions.
The primary activities of this industry are
Survey design
Online application development
Marketing online survey software
Consulting regarding surveys
51121 Software Publishing in the US
Software publishers are involved in the dissemination of licenses to customers for the right to execute
software on their own computers.
54151 IT Consulting in the US
IT consultants provide expert advice and assistance in the fields of writing, modifying, testing and
supporting software to meet the needs of particular customers.
54191 Market Research in the US
Market research firms are companies that systematically gather, record, tabulate and present marketing and
public opinion data.
Industry Definition
Main Activities
Similar Industries
Additional Resources
About this Industry
For additional information on this industry
www.comscore.com
ComScore
www.executiveboard.com
Corporate Executive Board
www.casro.org
Council of American Survey Research Organizations
www.techcrunch.com
TechCrunch
The major products and services in this industry are
Help and support
Survey analysis
Survey creation

%change
4
−6
−4
−2
0
2
1907 09 11 13 15 17Year
Per capita disposable income
SOURCE: WWW.IBISWORLD.COM
%change
15
−10
−5
0
5
10
2006 08 10 12 14 16 18Year
Revenue Employment
Revenue vs. employment growth
Products and services segmentation (2014)
70%Survey creation
20%
Survey analysis
10%
Help and support
Key Statistics
Snapshot
Industry at a Glance
Online Survey Software in 2014
Industry Structure Life Cycle Stage Growth
Revenue Volatility Medium
Capital Intensity High
Industry Assistance Low
Concentration Level Low
Regulation Level Light
Technology Change Medium
Barriers to Entry Low
Industry Globalization Low
Competition Level Medium
Revenue
$2.7bn
Profit
$1.5bn
Wages
$160.1m
Businesses
570
Annual Growth 14-19
5.9%
Annual Growth 09-14
10.7%
Key External Drivers
Corporate profit
Per capita disposable
income
Percentage of services
conducted online
Research and
development expenditure
Total advertising
expenditure
Demand from
e-commerce and
online auctions
Market Share
SurveyMonkey
6.3%
p. 21
p. 4
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 26

Key External Drivers Corporate profit
When corporate profit falls, businesses
often cut marketing and research budgets
first. A fall in corporate profit leads to a
decrease in market research and online
survey spending, hurting industry
revenue. As corporate profit increases,
businesses allocate more money to
marketing and research budgets.
Corporate profit is expected to increase in
2014, representing a potential
opportunity for the industry.
As consumers’ disposable incomes
increase, the number of purchases they
make will also increase. This would
stimulate businesses to further their use
of online survey software in order to
provide more accurate knowledge of
Executive
Summary
The Online Survey Software industry is
relatively new, but its low labor and
capital requirements make it highly
profitable. The industry’s rapid growth
prior to and after the recession more
than offset any slowdowns experienced
during the downturn. As such, revenue
is estimated to have grown at an
average annual rate of 10.7% to $2.7
billion over the past five years. This
includes an estimated 6.8% increase in
2014, as an upsurge in marketing
budgets and the rising ubiquity and
affordability of online survey software
boost demand.
Demand for online surveys is tied to
advertising budgets, which are affected
by business sentiment, corporate profit
and expected consumer spending.
Companies perform surveys to provide
insight about employee satisfaction and
consumer preferences. Online market
research and surveys offer clients an
inexpensive alternative to using
traditional methods that are not only
more costly, but also less time-effective
and interactive. As a result, many
companies have reduced their use of
traditional marketing, market research
and advertising activities, extracting
feedback from their existing and
potential customers about new and
existing products using services provided
by online survey software firms at a
fraction of the cost.
The number of industry enterprises has
increased at an average rate of 4.2% over
the five years to 2014 and is expected to
continue rising 1.8% in the five years to
2019. Low barriers to entry, few
regulations and limited skill requirements
allow companies to enter the industry
fairly easily. Larger companies have tried
to counter this trend by acquiring small
niche shops, as well as their main
competitors. Furthermore, expenses for
well-run firms typically decline as a
proportion of revenue as their business
matures and obtains a larger user-base,
benefiting profitability.
In the five years to 2019, media
consumption habits are expected to
continue to evolve. With social
networking and user-generated content
creating online communities, advertisers
will more easily be able to target niche
markets. Industry operators are
expected to shift toward customizing
surveys for social and mobile media
using new data analysis technologies.
These trends will provide a platform for
growth for industry firms and promote
revenue and profit growth. Over the five
years to 2019, revenue is forecast to
increase at an average annual rate of
5.9% to $3.6 billion.
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Greater marketing budgets will boost demand
for online surveys, facilitating strong growth

Key External Drivers
continued
consumer preferences. Disposable
income is expected to increase in 2014,
representing a potential opportunity for
the industry.
Percentage of services conducted online
As the number of broadband connections
increases, so does the percentage of
services conducted online. Households
are expected to spend more time online,
often visiting websites that leverage
online survey technology in order to offer
consumer goods and financial services.
As the percentage of services conducted
online increases in 2014, demand for
online survey software is expected to
increase as well.
Research and development expenditure
As the economy recovers, consumers will
likely increase their spending on
discretionary item purchases.
Consequently, businesses will invest
more in market research, including
online survey software, to test and refine
such products before they are launched.
As research and development
expenditure increases in 2014, demand
for industry products is expected to
increase as well. Nonetheless, since most
of the growth in research and
development spending over the past few
years has come from manufacturing and
government sources, research and
development expenditure remains a
threat for the industry.
Total advertising expenditure
Online survey software helps businesses
measure audience reception and the
effectiveness of an existing or planned
advertising campaign. A rise in media and
promotional expenditure by clients seeking
to maximize the return on their marketing
investments will increase demand for the
industry’s services. Total advertising
expenditure is expected to increase slightly
in 2014; however, any potential decline in
advertising expenditures would threaten
industry revenue.
Demand from e-commerce
and online auctions
As the number of online and e-commerce
transactions increases, companies will
increasingly rely on the internet to survey
their customers and get feedback on
customer preferences and satisfaction.
Demand from e-commerce and online
auctions is expected to increase in 2014.
%
15
3
6
9
12
1905 07 09 11 13 15 17Year
Percentage of services conducted online
%change
4
−6
−4
−2
0
2
1907 09 11 13 15 17Year

Current
Performance
Aside from a brief slowdown in 2009,
the Online Survey Software industry
has grown strongly over the past five
years. During the recession, revenue
stagnated due to weak consumer
spending, which caused corporate
profit, the main driver of the industry,
to suffer. Businesses that largely rely on
consumer spending for profit reduced
marketing budgets, causing
expenditures on market research and
online customer satisfaction surveys to
be postponed. Nevertheless, the
recovery of corporate profit and
disposable income, combined with the
explosion of broadband connections,
have stimulated demand for the Online
Survey Software industry. An increase
in marketing budgets and the rising
ubiquity and affordability of online
survey software have resulted in a
10.7% revenue boost to $2.7 billion over
the past five years.
Prior to the recession, the industry
benefited from a surge in consumer
spending. With access to easy credit,
many consumers spent freely, causing
corporate profit to soar. Profitable
companies allocated more money to
their marketing and advertising budgets,
increasing revenue available to spend on
online survey software for market
research, customer satisfaction and
employee satisfaction surveys.
Additionally, companies that increased
expenditure on research and developed
spurred further growth as new products
needed to be vetted and tested before
entering the market. Given their lower
price, widespread dissemination and ease
of use, compared with traditional survey
and consumer feedback methods, online
surveys quickly grew in popularity. As
such, aggressive growth prior to and after
the recession offset any slowdowns
during the recession. In 2014 alone,
industry revenue is estimated to grow at
an average annual rate of 6.8%.
Brief slowdown
overcome by rapid
growth
Makers and sellers of discretionary
goods and services typically reduce
marketing expenses during a recession
because consumers are expected to delay
these purchases, regardless of marketing
efforts. Therefore, the 2009 slash in
advertising budgets briefly stifled the
industry’s performance. In 2009, total
advertising expenditure plummeted
14.6% on the heels of a 2.0% decline in
2008, negatively affecting industry
revenue. Similarly, the tightening of
company budgets and an uncertain
economic outlook led to reduced
investment in the research and
development of new products. New
products create a significant source of
demand for online surveys and market
research, as clients attempt to test ideas
and refine products before they are
commercialized and receive feedback
after they are on the market. A decline in
new product development further
limited demand for survey services
during the recession.
Countering this trend, online market
research and surveys are much less
expensive than their traditional
%change
15
0
3
6
9
12
2006 08 10 12 14 16 18Year
Industry revenue

Brief slowdown
overcome by rapid
growth
continued
counterparts, providing the industry with
a small counter-cyclical boost. While
companies chose to reduce their use of
marketing, market research and
advertising firms, many opted for online
survey software as a way to engage their
existing and potential customers at a
fraction of the cost. Over the past five
years, these services have become
increasingly affordable and are becoming
a more acceptable way for companies to
get feedback from their customers and
test the market for their products. The
slowdown did not last long and revenue
followed the total advertising expenditure
increase of 4.5% over the five years to
2014 as corporate profit returned to
strong growth.
High profit entices
new entrants
Industry firms with a strong
understanding of unique market
conditions and success factors can expect
a hefty return on their investment.
Well-run firms’ operational expenses
decline as a percentage of revenue as
start-up costs are spread over an
increasing user-base; their profit and
revenue grow as their business matures.
Certain companies, such as industry
leader SurveyMonkey, are estimated to
achieve profit margins as high as 54.0%
of revenue.
The number of industry enterprises
has increased over the five years to 2014
at an average annual rate of 4.2% to an
estimated 570 businesses. Employment
has followed enterprises and is expected
to increase at an average annual 3.9% to
1,930 over the same period. Low barriers
to entry and technical skill requirements
(besides programming and web design
knowledge) allow companies to enter the
industry with little difficulty. This trend
has caused increased competition in
recent years. Larger companies have
tried to counter these trends by
acquiring small niche shops and some of
their main competitors. For example, in
December 2011, SurveyMonkey
partnered with TPG Capital to acquire
MarketTools’ Zoomerang, ZoomPanel
and TrueSample products. In April 2011,
SurveyMonkey acquired WuFoo; in
January 2011, SurveyMonkey acquired a
49.9% stake in ClickTools. The
company’s aggressive acquisition
strategy has allowed it to grow its
economy of scale, further contributing to
its impressive profit growth.
New media fuels
growth
The growth of this relatively new industry
has coincided with the increasing
ubiquity of internet access, an increasing
number of broadband connections and a
rising percentage of services conducted
online. The costs to obtain an internet
connection and a personal computer are
relatively low and have declined in recent
years. Furthermore, broadband internet
provides faster speeds, greater bandwidth
and more stable connections than aging
dial-up internet connections. As
connecting to the internet becomes easier
and more affordable, online retailers
become more accessible. As a result,
consumers are more likely to purchase
from these stores, making internet
polling and surveys more valuable for
companies. According to ComScore, an
internet market research firm, consumers
The industry’s relatively
new and high-profit
technology helped mitigate
declining demand

New media fuels
growth
continued
that use broadband connections typically
make more online purchases than those
that use dial-up internet connections.
Opportunities to measure and survey
online media audiences have increased
over the five years to 2014. Many
companies allow consumers to provide
ratings, comments and feedback for a
product. As more consumers use social
networking websites, companies have more
options to engage them in conversations
about a product. By conversing with
customers online, companies can improve
their understanding of consumer wants
and needs.
The internet has also caused
demographic markets to fragment by
allowing people with increasingly
specialized interests to interact. While
this factor has made it difficult to reach a
mass audience, it allows market
researchers and advertisers to reach
highly targeted groups of consumers.
Reaching a target audience is now easier
thanks to improved online advertising
metrics. By providing unique page views
and click-through rates in conjunction
with customized online surveys,
advertisers can make sure that their
target market is being reached.
Industry
Outlook
Increasing disposable income and
corporate profit in the coming five years
will stimulate a rise in consumer
spending, causing businesses to increase
their expenditures on market research,
including online survey software.
Revenue for the Online Survey Software
industry is set to increase as businesses
expand marketing and research budgets
and new entrants pursue the industry’s
high potential profit margins. The
industry will also continue to benefit
from its relatively new nature, since it is
nowhere near approaching its market
saturation point. Many companies are
still transitioning from traditional market
research and surveying to internet-based
technology, which will continue to drive
demand. Due to these trends, revenue is
forecast to increase at an average annual
rate of 5.9% to reach $3.6 billion in the
five years to 2019.
The fragmentation of the media
landscape, with consumers moving from
cable and satellite TV to internet
streaming, as well as from newspapers to
blogs, is anticipated to benefit online
survey software providers. The magazine
and newspaper industries have shrunk
rapidly over the past decade and will
continue their decline in the coming
years. However, internet advertising will
continue to grow at a swift rate, driving
demand for online surveys (since the two
are often used in conjunction with each
other). Total advertising output will
continue to increase, but the move to
more cost-effective advertising forms
(such as online and mobile) will flourish
and promote the use of internet-based
surveys, pushing most market research
and consumer feedback toward the
internet. The ability to judge consumer
preferences and get instantaneous
feedback about new products will
continue to attract new markets.
Companies will move
to more cost-effective
advertising, bolstering
demand for online surveys

New media brings
new opportunities
The way individuals consume media has
significantly changed, profoundly
affecting the way that marketing and
advertising campaigns are structured. A
major shift toward online and mobile
media is underway as downloadable
content and the streaming of music, TV
and movies are displacing the role of
traditional media. Industry operators will
need to continue to harness new media’s
potential to be successful and relevant
going forward. Online survey companies
will need to adapt their services to reflect
this shift by enhancing the measurement
of online media and advertising and
adapting their approach to make sure
they stay up to date with the newest
browsing platforms.
The number of mobile internet
connections will continue to grow
strongly in the five years to 2019, albeit at
a decelerating rate due to saturation.
However, as phones and data plans
become cheaper, more people will
purchase smartphones (and, to a lesser
extent, wireless laptop modems). As a
growing proportion of consumers
experience the internet through mobile
devices, existing players and new
entrants will have to cater to these
platforms. At the same time, this
continued shift will open the door for
new firms that specialize in these new
mediums, such as mobile and tablet
surveying. Some consolidation is also
expected, causing firms to grow at a
slower rate in the next five years than
they did over the past five. In the five
years to 2019, IBISWorld projects that
the number of firms will increase at an
average rate of 1.8% annually to reach
623. Employment is expected to follow
and increase an average annual 2.2% to
2,157 over the same period.
The continued fragmentation of
consumer markets will highlight the
importance of targeted and adaptable
survey software. Over the five years to
2014, social networking and user-
generated content have increasingly
allowed specific interest groups to create
communities online. As a result,
advertisers are able to better target niche
consumer segments. Moving forward,
this trend will become more prevalent as
measurement and data analysis
technologies continue to improve.
Companies are beginning to, and will
increasingly, employ technology to track
comments that consumers make about
their brands on Facebook, Twitter and
message boards to manage brand
development and reputation.
Consequently, the research of online
media platforms will become crucial to
understanding the complexities of
consumers’ thoughts, purchases and
actions. Industry operators will need to
develop survey products that take
advantage of social networking, since
internet users spend a rising proportion
of time on these websites and services.
Operators will need to
develop survey products
that take advantage of
social networking

The number of industry players is growing
Revenue is expected to outpace GDP
growth over the 10 years to 2019
Major player consolidation has occurred
Life Cycle Stage
20
15
10
5
0
-5
-10
%Growthinshareofeconomy
% Growth in number of establishments
-10 -5 0 5 10 15 20
Decline
Shrinking economic
importance
Quality Growth
High growth in economic
importance; weaker companies
close down; developed
technology and markets
Maturity
Company
consolidation;
level of economic
importance stable
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
technology change
Key Features of a Growth Industry
Revenue grows faster than the economy
Many new companies enter the market
Rapid technology process change
Growing customer acceptance of product
Rapid introduction of products brands
Software Publishing
IT Consulting
Market Research
Internet Publishing and Broadcasting

Industry Life Cycle Over the 10 years to 2019, industry value
added, which measures the industry’s
contribution to the US economy, is
expected to increase at an average annual
rate of 6.6%. Meanwhile, US GDP is
forecast to rise at an average annual rate
of 2.7% over this same period. These
rates indicate that the industry is in a
growth phase of its life cycle since its
growth rate outpaces GDP over a 10-year
period. Rising industry participation and
new forms of businesses also indicate a
growing industry.
Over the 10 years to 2019, the number
of firms in this industry is expected to
increase at an average annual rate of
3.0% to 623 businesses. This growth in
industry participation can be attributed
to an increase in e-commerce demand,
mainly driven by the rising prevalence of
broadband connections and other
high-speed internet services. These
services have allowed more consumers
to surf the net and buy products without
experiencing any lag time; consequently,
more consumers have made purchases
online. With an increasing percentage of
services being conducted online, the
internet has become an increasingly
valuable source for companies of all
types to survey customers and get real
time feedback. The comparative
affordability of online survey methods
compared to traditional ones and the
high profit margins this industry offers
have also enticed new entrants to enter
this industry.
Furthermore, the industry’s low
barriers to entry and skill requirements
have allowed companies to enter the
industry without much difficulty, leading
to higher participation. Larger companies
have tried to counter these trends by
acquiring small niche shops and many of
their main competitors. For example, in
2011 alone, SurveyMonkey acquired
MarketTools’ Zoomerang, ZoomPanel
and TrueSample products. Earlier in the
year, the company also acquired WuFoo
and a 49.9% stake in ClickTools.
This industry
is Growing

Products Services
The Online Survey Software industry
provides customers with the tools to
design and publish online surveys. This
software, accounting for 70.0% of
industry revenue, includes web-based
tools to conduct various types of surveys,
from open-ended to multiple choice.
Software often provides clients with
templates to fill in; however, some
companies allow customers to upload
word documents that are then transposed
into a web-based survey. Also, some
companies charge a premium for white-
label surveys, which conceal the
surveyor’s identity to those being
surveyed. For an additional fee, survey
companies also offer advanced
technologies, such as skip-logic, question
randomization, video and other features.
Companies also provide analytical
tools for clients to assess the survey
results. These tools are also often web-
Products Markets
Supply Chain | Products Services | Demand Determinants
Major Markets | International Trade | Business Locations
KEY BUYING INDUSTRIES
31-33 Manufacturing in the US
The manufacturing sector buys a significant share of online surveys from this industry.
44-45 Retail Trade in the US
Retailers also buy a significant share of online survey tools.
52 Finance and Insurance in the US
The finance and insurance sector buy online survey tools to better understand its customers.
62 Healthcare and Social Assistance in the US
The healthcare sector buys a significant share of online surveys from this industry.
KEY SELLING INDUSTRIES
51421a Internet Hosting in the US
This industry provides market researchers with online hosting services.
51421b Other Data Processing Services in the US
This industry provides market researchers with data processing services.
51913b Internet Publishing and Broadcasting in the US
This industry provides a platform for online survey software.
Supply Chain
Products and services segmentation (2014)
Total $2.7bn
70%Survey creation
20%
Survey analysis
10%
Help and support

Products Markets
Major Markets The industries that use online surveys the
most include consumer goods retailers,
financial services and manufacturing
industries. Companies in these industries
can gain a lot from consumer knowledge
and, therefore, pioneered the use of
survey research. Such companies
developed surveys as an addition to, or
even an alternative for, focus groups in
order to measure the expected consumer
reaction to a product or marketing pitch.
This allows companies to maximize the
benefits of various investments across
marketing, stocking, production, and
research and development departments.
These industries are, however, decreasing
as a share of the online survey industry’s
customer base as surveys are increasingly
Demand
Determinants
Demand for online surveys is directly tied
marketing and advertising budgets, which
are affected by business sentiment,
corporate profit and expected consumer
spending. Marketing budget appropriation
to online surveys depends heavily on
business sentiment. Companies do not
spend much of their revenue on surveying
clients if they anticipate low profit; instead,
they often cut costs by relying on older,
secondary or syndicated research.
Similarly, companies perform more
extensive internal surveys to optimize
processes when they can afford it. Potential
insights from surveying consumers or
employees are, however, most significant in
a difficult operating environment, making
online survey tools an investment that
cash-strapped companies may continue to
make during a difficult economic
environment. Online survey software is
often cheaper than other market research
alternatives, and provides the industry with
the potential for a counter-cyclical boost.
The popularity of online services, the
attractiveness (e.g. price and quality) of
substitute products and the
effectiveness of past surveys in helping
companies achieve goals all affect
industry performance. For example,
online survey tools are increasingly
popular as the pervasiveness of internet
use grows among all demographics. As
more companies use digital platforms
to sell and promote products and
services, they are more likely to
incorporate online surveys into their
business model.
Demand is also derived from political
polling via online surveys on voting
intentions, issues and views, linking the
industry to the election cycle.
Governments typically undertake
online surveys as a precursor to
development of a policy or a public
information or education campaign and
to promote a response to and
recognition of these campaigns.
Products Services
continued
based, though a portion of results can
also be downloaded in excel, text or CSV
formats. A few companies offer
advanced features like full cross-tabs,
text analysis and SPSS (statistical
analysis software) integration. As
traditional market research firms begin
to offer online alternatives, these
advanced tools are increasing as a share
of the products offered by this industry.
Escalating internal and external
competition is pushing companies to
offer additional services. The industry
also offers customer support for users
that have questions or issues with online
survey software; they can often talk to or
e-mail company representatives to
resolve the issues.

Products Markets
International Trade National boundaries have little relevance
to software companies because their
products are inherently portable through
modern data networks.
Major Markets
continued
being used to poll other groups, such as
employees and upstream and
downstream companies, rather than
just consumers.
Technology, healthcare and insurance,
telecommunications and pharmaceutical
industries have also adopted the use of
online surveys. The other segment
includes a variety of industries, including
other retailers, wholesalers, hospitality
industries as well as individuals in search
of more information on a wide variety of
topics. This segment is growing rapidly as
a share of revenue as new industries
increasingly invest in online surveys to
optimize their business models.
Major market segmentation (2014)
Total $2.7bn
21%Consumer goods industries
9%
Healthcare products
and insurance industries
18%
Financial services industries
8%
Telecommunications
industries
4%
Pharmaceuticals
industries
15%
Other
13%
Manufacturing industries
12%
Technology industries

Products Markets
Business Locations 2014
MO
2.4
West
West
West
Rocky
Mountains Plains
Southwest
Southeast
New
England
VT
0.8
MA
4.6
RI
0.1
NJ
5.5
DE
0.4
NH
0.9
CT
1.3
MD
2.4
DC
0.5
1
5
3
7
2
6
4
8 9
Additional States (as marked on map)
AZ
1.3
CA
15.6
NV
0.3
OR
1.5
WA
5.6
MT
0.1
NE
0.7
MN
2.9
IA
0.8
OH
3.9
VA
0.2
FL
4.1
KS
0.6
CO
4.0
UT
7.0
ID
0.3
TX
0.7
OK
0.5
NC
3.0
AK
0.1
WY
2.0
TN
0.1
KY
0.8
GA
2.2
IL
3.0
ME
0.2
ND
0.2
WI
0.1 MI
2.0
PA
2.9
WV
5.4
SD
0.6
NM
0.2
AR
0.3
MS
0.1
AL
0.7
SC
0.2
LA
0.2
HI
0.2
IN
1.2
NY
5.5
5
6
7
8
3
21
4
9
Mid-
Atlantic
Employment by region (%)
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
Great
Lakes

Products Markets
Business Locations The Online Survey Software industry’s
employment is spread out along the lines
of application software developers. Data
is sourced from a May 2010 survey from
the Bureau of Labor Statistics. The West
region makes up the highest proportion
of employment, with 23.3%. California
makes up 15.6% of revenue as a majority
of the region. This is largely because of
Silicon Valley, home of Stanford
University, and has historically drawn in
internet-based businesses. Another 5.6%
are based in Washington. Major company
SurveyMonkey’s offices are based in Palo
Alto, CA and Portland, OR.
Survey software companies are also
concentrated in the Mid-Atlantic, in New
Jersey and New York, where they can
easily meet with major corporate clients.
New York and New Jersey are each home
to another 5.5% of industry employees. %
30
0
10
20
Southwest
West
GreatLakes
Mid-Atlantic
NewEngland
Plains
RockyMountains
Southeast
Employment
Population
Distribution of employment vs. population

Cost Structure
Benchmarks
Profit
Industry profit is defined as earnings
before interest and taxes. IBISWorld
estimates that this industry is highly
profitable, with about a 54.6% margin in
2014. Some successful companies may
earn a much higher profit. This large
disparity is due to the industry’s
fragmented nature, as it is composed of a
variety of smaller companies, which
generally must spend a higher share of
revenue in order to satisfy clients than a
Key Success Factors Access to a highly skilled workforce
Designing online survey tools often
requires excruciatingly long hours. A
skilled and flexible work force will work
efficiently for extended periods of time,
covering many areas of operations from
undertaking interviews to collating results.
Adoption to new technology and
prompt delivery to market
Online survey software companies must
quickly adopt new survey or
programming techniques to provide
clients with what they are searching for.
The industry depends on the relevancy of
the often time-sensitive insights gained
from its surveys.
Attractive product presentation
Online survey software companies face
competition from similar survey
providers within the industry. Companies
must positively present survey software
to attract and retain clients and users.
Developing relationships
with other industries
Online survey software are useful to
many industries, such as consumer goods
retailers, financial services and
manufacturing industries. Firms that
attract a large amount of merchant
partners typically see stronger adoption
rates of their service.
Ensure pricing policy is appropriate
To maintain a competitive edge, firms
must monitor the prices that their
competitors (internal and external)
charge merchants and adjust their own
pricing structure accordingly.
Having a good reputation
Consumers will not use an online survey
software if they do not trust that their
information and finances will be secure.
Firms must establish extensive security
measures and offer users fraud
protection to allay security concerns.
Market Share
Concentration
Market share concentration in the
Online Survey Software industry is
low, as the industry is relatively new,
and thus highly fragmented with low
barriers to entry. Entry requires low
initial investment and a high potentials
high return for new entrants. Because
a growing market for online surveys
and high profit margins make it an
attractive investment, new companies
are continuously entering the industry.
While the number of enterprises is
projected to grow over the next five
years, the market share concentration
is expected to remain steady as
industry companies look to acquire
their competitors in order to retain a
significant share of the growing
market. For example, in December
2011, the industry’s largest player with
only 6.3% market share in 2013,
Survey Monkey, announced the
acquisition of MarketTools Inc. (the
creators of Zoomerang).
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Level
Concentration in
this industry is Low
IBISWorld identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:

Cost Structure
Benchmarks
continued
large company that may have already
developed similar surveys or survey
features for a prior client. Online survey
companies include those that invest
heavily in survey software and
application design to establish their
products; however, such firms earn a
lower than average profit, and many
initially operate at a loss due to their high
initial investments.
As online software becomes more
popular, increasing revenue often results
in wider margins for successful operators
in this space due to a decreasing need for
tool development with each additional
client. As online survey software
companies acquire more clients, they have
fewer expenses per client because clients
share existing systems and services. There
are also a lot of free services offering
online survey tools, though many are
ad-supported and therefore depend on
page views to generate revenue.
Additionally, new companies are
continually entering the industry, often
operating at a loss, yet the snowballing
profitability of existing companies is
balancing out such operations.
Wages
Wages are estimated to account for 5.9%
of revenue. Wages as a share of industry
revenue are declining significantly
despite new investments in web design,
platforms and tools. As a company’s
product becomes established, wages
decrease because up-front development
costs are typically higher than software
updates and maintenance work. As more
companies continue to enter into the
industry, wages are increasing; however,
revenue growth is outpacing wage
growth, leading to the decrease of wages
as a share of revenue.
Sector vs. Industry Costs
■ Profit
■ Wages
■ Purchases
■ Depreciation
■ Marketing
■ Rent Utilities
■ Other
Average Costs of
all Industries in
sector (2014)
Industry Costs
(2014)
0
20
40
60
Percentageofrevenue
80
100
14.7
19.2
4.8
7.2
7.6
24.6
21.9 54.6
15.3
5.4
10.5
2.3
6.0
5.9

Basis of Competition Internal competition
Companies compete with each other
based on product pricing, features and
quality. Due to the intense price
competition, many companies, including
major player SurveyMonkey, operate
using the Freemium business model in
which service providers offers basic
features at no cost and charge a premium
for supplemental or advanced features.
These tactics draw in users, with the
expectation that some will upgrade to
paid online survey packages. Price
competition and free access to basic
survey software keeps prices low for
industry products. As more companies
enter the industry, price competition is
expected to escalate.
Product features and quality are key
for companies in search of high profit
margins. In order to be highly profitable,
companies must retain and attract major
corporate clients by supplying innovative
and useful features at high levels of
quality. Product quality is reflected in
survey loading time and processing time
for results. It also involves ease of use for
clients and the population being surveyed
and timeliness of client services.
Companies primarily compete based on
the ease of use of their products, which
gives an advantage to well-established
companies because more users are
familiar with their software design.
External competition
Companies in this industry primarily
compete against traditional market
research companies that have relied on
phone and mail surveys in the past but
are increasingly offering online survey
capabilities. Industry operators compete
with market research companies based
on quality of service, the survey and
sampling techniques used and their
appropriateness, and the timely
presentation of the results. The
competition is focused on the quality of
the analysis of the results obtained. In
particular, the availability of services
(including value-added ones) to clients is
important. Quality also depends on the
speed of the website, the convenience of
setting up surveys and costs.
Market research businesses must
also perform strategic analysis and
professional interpretation of the
research results within the client’s
time and budget constraints. The
emphasis is not just on presenting
Cost Structure
Benchmarks
continued
Other costs
The industry spends about 10.5% of
revenue on marketing its products. For
example, online survey software
companies usually spend heavily on
search engine optimization efforts to
promote their products. Many also
conduct consumer assessment studies in
order to publicize the positive results of
companies that used their surveys. As
more companies enter into the industry,
marketing efforts are expected to
increase as a share of revenue.
Purchases have accounted for a fairly
steady as a share of industry revenue in
the past five years, at about 6.0%.
However, purchases decline in the long
term as technologies that the industry
uses become cheaper. The main
purchases that this industry makes
include servers, development platforms
and web hosting.
Other costs, including rent, utilities
and back office operations are
decreasing as a share of revenue for
reasons similar to wages decreasing as
a share of revenue. As companies
establish processes and complete their
software, it becomes cheaper to
operate per each additional client. This
trend is expected to continue over the
next five years.
Level Trend
Competition in
this industry is
Mediumand the
trend is Increasing

Industry
Globalization
This highly fragmented industry includes
some companies that are foreign owned;
however, they do not make up a
significant market share. International
trade does not have a tangible impact on
this industry because software can be
digitally distributed instantly, making
borders of little importance.
Barriers to Entry This fast-growing industry has low
barriers to entry. Technology change is
low, as the tools that online survey
software developers use have not
changed much in the past five years.
Although online surveys are now
accessed through a wider range of
platforms, such as applications on
mobile devices, the fundamental
development of the survey software
has not changed. Likewise, regulation
in this space is relaxed. Furthermore,
investments for an online survey
software start-up company are
relatively low because many are started
by programmers who are willing to
work at a discounted rate to get their
company established. Many operators
already have their own development
servers because they are entering the
industry from a similar field, and
other costs are fairly negligible.
Barriers are decreasing as more people
learn how to program online software
and the costs for servers fall with
technological advancement.
Basis of Competition
continued
data and results, but on interpreting
its significance and relevance to a
client and their current and future
strategic directions and operations. As
a result, more online survey
companies, including SurveyMonkey,
are providing personalized analysis
for their customers in order to
compete with larger traditional
market research companies.
Barriers to Entry checklist Level
Competition Medium
Concentration Low
Life Cycle Stage Growth
Capital Intensity High
Technology Change Medium
Regulation Policy Light
Industry Assistance Low
Level Trend
Barriers to Entry
in this industry are
Lowand Decreasing
Level Trend
Globalization in this
industry is Lowand
the trend is Steady

Player Performance SurveyMonkey is one of the world’s
leading providers of web-based survey
solutions. It serves 100.0% of the Fortune
100 companies and 99.0% of the Fortune
500. It also provides services to other
businesses, academic institutions and
various other types of organizations. The
company is rapidly expanding, having
doubled its employees to about 250 over
the past two years, according to
IBISWorld estimates. It is headquartered
in Palo Alto, CA, with offices in Portland
and Funchal, Portugal.
SurveyMonkey was founded in 1999 in
Portland by Ryan and Chris Finley. In
April 2009, private investors Bain
Capital Ventures and Spectrum Equity
Investors used a leverage buyout to
acquire a majority stake in
SurveyMonkey from its founders for an
undisclosed sum. The founders remained
with the firm in the Portland office, while
the private investors brought in the
entrepreneur and previous head of
Yahoo’s music business, David Goldberg,
to run the company as CEO from Palo
Alto. In the 10 years to 2009,
SurveyMonkey acquired 2.0 million
registered users, created more than 6.0
million surveys and generated over 200
million survey completions.
In 2010, SurveyMonkey secured
$100.0 million in senior debt financing
from a consortium of financers lead by
Bank of America Merrill Lynch and
SunTrust Robinson Humphrey. In 2011,
SurveyMonkey partnered with TPG
Capital to acquire its primary rival,
MarketTools. MarketTools was one of
the first companies to make online
surveys widely available on the internet
and was a leading provider of
enterprise-feedback management and
market research. The acquisition gives
SurveyMonkey a portfolio of industry-
leading technologies and brands,
including CustomerStat, TrueSample,
Zoomerang and ZoomPanel. The deal is
Major Companies
SurveyMonkey | Other Companies
93.7%
Other
SurveyMonkey 6.3% SOURCE: WWW.IBISWORLD.COM
Major players
(Market share)
SurveyMonkey (US industry-specific operations) – financial performance*
Year
Revenue
($ million) (% change)
EBIT
($ million) (% change)
2008 28.0 418.5 23.8 417.4
2009 69.2 147.1 57.5 141.6
2010 77.6 12.1 59.7 3.8
2011 89.0 14.7 60.9 2.0
2012 113.0 27.0 61.0 0.2
2013 158.2 40.0 85.4 40.0
*Estimates
SOURCE: IBISWORLD
SurveyMonkey
Market share: 6.3%

Major Companies
Other Companies The Online Survey Software industry is
highly fragmented and competitive, with
low barriers to entry. It is a relatively
young industry, still in the early stages of
development, with the majority of firms
operating as start-ups or nonemployers.
Individual computer programmers can
develop and improve upon industry-
related products at little cost or time
investment. In addition, consumers have
access to a wide range of free survey
products online from industry firms and
individual developers. Consumer demand
for more sophisticated metrics for
measuring customer feedback will drive
significant change in industry products
and services over the next five years,
keeping competition high.
SurveyMonkey has led the industry
due to backing from large institutional
investors. However, more institutional
capital is expected to follow, which will
grow existing firms and bring in firms
from other technology fields into the
industry. Notable competitors to
SurveyMonkey include The Survey
System, KeyPoint, FluidSurveys, Snap
Surveys, StatPac and SurveyGold.
Player Performance
continued
also expected to expand SurveyMonkey’s
user base by 1.7 million registered users.
Financial performance
SurveyMonkey’s financial performance
over the past five years has made it one
of the gold standards for success in the
technology-startup field. The company
grew from a small operation run by two
brothers, making an estimated $28.0
million in 2008, to a major private
equity-backed industry leader,
generating an estimated $158.2 million
in 2013. Over the past five years,
IBISWorld estimates that
SurveyMonkey’s revenue grew at an
astounding 41.4% annualized rate. This
expansion has been fueled by funding
from leading private equity firms and
financial institutions, which have
brought in experienced leadership and
provided capital to invest in its
technology infrastructure. The simplicity
and scalability of its products and
services has allowed it to rapidly expand
its customer base without incurring
significantly higher marginal costs,
allowing it to maintain profit margins at
about 54.0% of revenue. These high
margins have given the firm the cash to
acquire competitors, including
MarketTools, its chief rival.

Capital Intensity With low labor costs per unit once online
survey software is developed, this
industry has a high level of capital
intensity, despite a fairly low depreciation
level. Capital intensity is the ratio of
depreciation to wages, and the industry
spends about $0.39 on capital for every
dollar it spends on labor. Depreciation,
however, only accounts for about 2.3% of
industry revenue, mainly stemming from
companies investing in online survey
software and the computer servers used
to store data. It also comes from updates
to existing software that industry
companies make. With a majority of
firms operating in this industry as
start-ups or nonemployers, a large
percentage of revenue is counted as
profit, with only a small percentage
counted as wages.
Operating Conditions
Capital Intensity | Technology Systems | Revenue Volatility
Regulation Policy | Industry Assistance
Tools of the Trade: Growth Strategies for Success
LaborIntensive
CapitalIntensive
Change in Share of the Economy
New Age Economy
Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Traditional Service Economy
Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
Investment Economy
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Software Publishing
Manufacturing
IT Consulting
Retail Trade
Market Research
Online Survey
Software
Capital intensity
0.5
0.0
0.1
0.2
0.3
0.4
Dotted line shows a high level of capital intensity
Capital units per labor unit
Online Survey
Software
InformationEconomy
Level
The level of capital
intensity is High

Revenue Volatility This fast-growing industry exhibits
moderate revenue volatility. The Online
Survey Software industry is closely linked
to corporate spending on research and
advertising and overall corporate profit.
As corporate profit increases, businesses
increase their research expenditures in
order to refine their product offerings to
a more targeted market. As per capita
disposable income increases and
individuals increase their expenditures,
corporation observe individuals’
preferences, often through surveys. The
industry has expanded at an uneven pace
largely due to corporate profit and
disposable income fluctuations over the
past five years. Revenue has grown as
much as 13.9% in 2011 and as little as
0.6% in 2009 in the past five years.
Additionally, online survey software is
a new tool for many corporations and
many are experimenting with it,
Technology
Systems
While the Online Survey Software
industry is technology based, technology
change is moderate because the tools that
online survey software providers use to
make surveys have not changed
significantly during the past five years.
Online survey tools are generally built
through HTML forms. Programmers use
web server scripting technology, such as
PHP or ASP, to post information to the
website. The HTML form saves the
information to a file or database, which is
available to the customer.
Advanced HTML forms use newer web
2.0 technology like DHTML or AJAX to
simplify the forms for users. CAPTCHA
codes are used to verify that forms are
filled out by real people instead of
computers. Also, social media has
encouraged companies to publish survey
results, making it possible for them to go
viral. This strategy enhances the
company’s brand and provides marketing
to the online survey software providers
running the surveys.
The technology through which
respondents view and answer surveys has
advanced more rapidly in recent years. In
the past five years, consumers
increasingly used mobile devices, like
tablets and smartphones, to access the
internet. Online survey designers have
had to adapt surveys to make them user
friendly on such new platforms.
Level
The level of
Technology Change
is Medium
Volatility vs Growth
Revenuevolatility*(%)
1000
100
10
1
0.1
Five year annualized revenue growth (%)
–30 –10 10 30 50 70
Hazardous
Stagnant
Rollercoaster
Blue Chip
* Axis is in logarithmic scale
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Level
The level of
Volatility is Medium

Industry Assistance While the industry does not receive
direct government assistance, it is
supported by the Council of American
Survey Research Organizations
(CASRO), an association that promotes
survey research. CASRO supports
lobbying initiatives and provides
standards to members, representing
more than 300 companies globally.
CASRO has also established
international survey research standards
that are approved by the International
Standardization Organization (ISO). See
Regulation section for more information.
Regulation Policy The Online Survey Software industry is
still very young and little regulation has
been put in place for online surveys.
There are, however, optional standards to
follow in order to ensure that a particular
survey is legitimate and respected.
Market, opinion and social research
surveys can be approved through the
American National Standards Institute
under two separate international
standards. The CASRO Institute for
Research Quality (CIRQ) provides
auditing and certification for both
standards, which are classified as ISO
20252 and ISO 26362:2009. The first
standard establishes the terms and
definitions as well as the service
requirements for organizations and
professionals that conduct market,
opinion and social research. The second
standard specifies the terms and
definitions, as well as the service
requirements, for organizations and
professionals that own or use access
panels for market, opinion and social
research. It develops the criteria that
access panel providers can be evaluated
against and the quality by which access
panels are assessed. ISO 26362:2009
applies to all types of access panels,
whether recruited and used online (e.g.
via internet) or offline (e.g. via telephone,
mail or face-to-face interaction). While
these standards are not mandatory, they
signal the professionalism and credibility
of certified online survey software.
Revenue Volatility
continued
resulting in unpredictable bursts of
demand. As demand for this industry’s
products becomes more regular and the
services become more mainstream, the
industry is expected to expand at a more
constant pace.
Level Trend
The level of
Regulation is
Lightand the
trend is Steady
Level Trend
The level of
Industry Assistance
is Lowand the
trend is Steady

Key Statistics
Revenue
($m)
Industry
Value Added
($m)
Establish-
ments Enterprises Employment Exports Imports
Wages
($m)
Domestic
Demand
Corporate
profit
($b)
2005 1,243.4 1,080.9 428 420 1,562 -- -- 125.9 N/A 1,477.7
2006 1,334.7 1,083.0 463 452 1,670 -- -- 135.1 N/A 1,646.5
2007 1,502.1 1,166.6 508 492 1,772 -- -- 146.3 N/A 1,529.0
2008 1,615.2 1,149.3 505 488 1,717 -- -- 138.4 N/A 1,285.1
2009 1,624.9 1,118.2 483 465 1,595 -- -- 127.5 N/A 1,392.6
2010 1,822.8 1,237.6 507 489 1,674 -- -- 133.8 N/A 1,740.6
2011 2,076.6 1,341.3 528 511 1,776 -- -- 143.9 N/A 1,877.7
2012 2,283.9 1,380.0 542 530 1,834 -- -- 148.3 N/A 2,009.5
2013 2,527.6 1,451.4 557 545 1,892 -- -- 154.1 N/A 2,077.9
2014 2,698.8 1,691.2 580 570 1,930 -- -- 160.1 N/A 2,162.1
2015 2,925.3 1,727.5 594 591 1,990 -- -- 168.8 N/A 2,281.7
2016 3,100.8 1,822.3 619 604 2,041 -- -- 172.7 N/A 2,384.9
2017 3,342.7 1,943.1 627 611 2,058 -- -- 174.9 N/A 2,451.8
2018 3,418.6 2,018.4 631 615 2,114 -- -- 176.2 N/A 2,559.6
2019 3,601.7 2,126.0 644 623 2,157 -- -- 178.7 N/A 2,613.6
IVA/Revenue
(%)
Imports/
Demand
(%)
Exports/
Revenue
(%)
Revenue per
Employee
($’000)
Wages/Revenue
(%)
Employees
per Est.
Average Wage
($)
Share of the
Economy
(%)
2005 86.93 N/A N/A 796.03 10.13 3.65 80,601.79 0.01
2006 81.14 N/A N/A 799.22 10.12 3.61 80,898.20 0.01
2007 77.66 N/A N/A 847.69 9.74 3.49 82,562.08 0.01
2008 71.16 N/A N/A 940.71 8.57 3.40 80,605.71 0.01
2009 68.82 N/A N/A 1,018.75 7.85 3.30 79,937.30 0.01
2010 67.90 N/A N/A 1,088.89 7.34 3.30 79,928.32 0.01
2011 64.59 N/A N/A 1,169.26 6.93 3.36 81,024.77 0.01
2012 60.42 N/A N/A 1,245.31 6.49 3.38 80,861.50 0.01
2013 57.42 N/A N/A 1,335.94 6.10 3.40 81,448.20 0.01
2014 62.66 N/A N/A 1,398.34 5.93 3.33 82,953.37 0.01
2015 59.05 N/A N/A 1,470.00 5.77 3.35 84,824.12 0.01
2016 58.77 N/A N/A 1,519.26 5.57 3.30 84,615.38 0.01
2017 58.13 N/A N/A 1,624.25 5.23 3.28 84,985.42 0.01
2018 59.04 N/A N/A 1,617.12 5.15 3.35 83,349.10 0.01
2019 59.03 N/A N/A 1,669.77 4.96 3.35 82,846.55 0.01
Figures are inflation-adjusted 2014 dollars.
Revenue
(%)
Industry
Value Added
(%)
Establish-
ments
(%)
Enterprises
(%)
Employment
(%)
Exports
(%)
Imports
(%)
Wages
(%)
Domestic
Demand
(%)
Corporate
profit
(%)
2006 7.3 0.2 8.2 7.6 6.9 N/A N/A 7.3 N/A 11.4
2007 12.5 7.7 9.7 8.8 6.1 N/A N/A 8.3 N/A -7.1
2008 7.5 -1.5 -0.6 -0.8 -3.1 N/A N/A -5.4 N/A -16.0
2009 0.6 -2.7 -4.4 -4.7 -7.1 N/A N/A -7.9 N/A 8.4
2010 12.2 10.7 5.0 5.2 5.0 N/A N/A 4.9 N/A 25.0
2011 13.9 8.4 4.1 4.5 6.1 N/A N/A 7.5 N/A 7.9
2012 10.0 2.9 2.7 3.7 3.3 N/A N/A 3.1 N/A 7.0
2013 10.7 5.2 2.8 2.8 3.2 N/A N/A 3.9 N/A 3.4
2014 6.8 16.5 4.1 4.6 2.0 N/A N/A 3.9 N/A 4.1
2015 8.4 2.1 2.4 3.7 3.1 N/A N/A 5.4 N/A 5.5
2016 6.0 5.5 4.2 2.2 2.6 N/A N/A 2.3 N/A 4.5
2017 7.8 6.6 1.3 1.2 0.8 N/A N/A 1.3 N/A 2.8
2018 2.3 3.9 0.6 0.7 2.7 N/A N/A 0.7 N/A 4.4
2019 5.4 5.3 2.1 1.3 2.0 N/A N/A 1.4 N/A 2.1
Annual Change
Key Ratios
Industry Data

Jargon Glossary
BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
“real” growth or decline in industry metrics. The inflation
adjustments in IBISWorld’s reports are made using the
US Bureau of Economic Analysis’ implicit GDP price
deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industry’s contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
Industry Jargon
IBISWorld Glossary
CLICK-THROUGHA method of internet advertising that
tracks the number of consumers that click on an
advertisement on a website.
SMARTPHONEA mobile phone that offers advanced
PC-like capabilities.
SPSSA computer program used for survey authoring
and deployment published by IBM.
SYNDICATED RESEARCHStudies in which the
sponsoring research company defines an audience to
survey and the interval between studies and the survey
questions. Clients share the results through a
subscription service.

Jargon Glossary
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
IBISWorld Glossary
continued

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information contained herein, and it accepts no responsibility and disclaims
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that the purchaser uses or quotes from the material in this publication – in
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it will be sourced to: IBISWorld Inc.
At IBISWorld we know that industry intelligence
is more than assembling facts
It is combining data with analysis to answer the
questions that successful businesses ask
Identify high growth, emerging shrinking markets
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