Expert networks, which specialize in connecting users to industry experts, suffered from cooling demand in 2022, but still managed to grow usage overall, according to analysis released by Integrity Research and Inex One, an expert network marketplace. The market sizing study, which includes detailed revenue estimates for the 42 largest expert networks over the last decade, provides an in-depth perspective on the expert network industry, which continues to have opportunities for future growth despite a more challenging environment. https://expert-network-market-data.sellfy.store/
Based on firm-level bottom-up analysis, the new 2023 Expert Network Market Sizing estimates that aggregate revenues for the industry reached $2.14 billion in 2022, representing an 18% compound annual growth rate over the last decade, from revenues of $409.3 million in 2012. However, growth slowed dramatically in 2022, with estimated revenues increasing only 3.9% during the year. Most firms experienced reduced client activity and a number of firms suffered revenue declines for the year.
A key performance indicator for the industry is job postings, which soared during 2021 only to plummet in 2022. The study includes bi-weekly recruiting data for fifteen major expert networks, which peaked at over 1,000 open positions in March 2002, only to fall over 50% in the succeeding months. As of January, 2023, recruiting levels had fallen to levels first seen in the early stages of the Covid-19 pandemic.
Industry sources blamed falling levels of private equity transactions and initial public offerings, which stimulate expert consultations as private equity firms and consultants such as Bain or McKinsey hired by PE firms perform due diligence. Collectively, private equity and consulting firms account for 60% of industry revenues.
The 2023 Expert Network Market Sizing study includes information on key client segments, as expert network revenues have expanded beyond their hedge fund origins. Most of the recent growth is coming from customers other than the buy-side and banks. “Seventy percent of industry revenues are derived from outside the public equity segment,” said study co-author Max Friberg of Inex One. “Consulting firms are especially important customers for expert networks since they can pass on their expenses to their end clients.”
The study, which used company filings, interviews with current and former employees and external metrics to estimate company-level revenues, includes analysis of regional revenue splits for the top expert networks, finding that the US remains the largest geographic source of industry revenues. “The US remains the deepest market for expert networks but much of the industry growth is coming from outside the US,” said study co-author Max Friberg of Inex One. “Europe and APAC are still earlier in their growth cycles, each about half the current US consumption levels.”
The 2023 Expert Network Market Sizing study includes Excel worksheets detailing revenues for the top 42 expert networks from 2012 through 2022. Also included are analyses of regional revenues, market share development, productivity benchmarks and customer segment information. Underlying metrics used to support revenue estimates are also included. For further details go to https://expert-network-market-data.sellfy.store/
Our Take
Despite the more difficult expert network environment during 2022, the industry continues to expand. A key factor is the growing range of services beyond the core product of expert consultations. Surveys have become a key source of revenues, and some firms now promote their market research capabilities more heavily than consultations.
Transcripts of previously conducted expert consultations are also proving a popular new offering. Third Bridge was one of the first to productize a library of transcripts, followed by Guidepoint and others. Tegus has successfully built its business model around transcripts, earning the bulk of its revenues from subscriptions to the transcripts rather than from expert consultations.
Expert networks are also investing heavily in new technologies to improve the timeliness and quality of expert sourcing. Upstarts such as Prosapient, Techspert.io and NewtonX have touted new technologies, seeking to improve expert sourcing through natural language processing and machine learning. Established expert networks have followed suit, as exemplified by AlphaSights which centered its recent rebranding around its proprietary knowledge graph of industry contacts.
The 2023 Expert Network Market Sizing study indicates that firms aligned with key industry growth trends are faring well despite a more difficult market environment. Other firms appear to be more vulnerable to the industry slowdown. The increasing divergence among firms may signal a more challenging period for the industry ahead.