Study: Expert Network Industry Tops $1.5 Billion Despite Muted Growth During Pandemic

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Expert networks were not immune from the effects of Covid-19 yet continued to grow double-digits in 2020, bringing the total industry size over $1.5 billion, according to analysis released by Integrity Research and Inex One, an expert network marketplace.  The study, which includes detailed revenue estimates for the top 40 expert networks over the last five years, provides an in-depth perspective on the expert network industry, which continues to have opportunities for future growth.

Based on firm-level bottom-up analysis, 2020 Expert Network Market Sizing estimates that aggregate revenues for the industry slowed to low double digits in 2020 as Covid-19 dampened client activity in several key customer segments.  Nevertheless, industry revenues exceeded $1.5 billion. Expert networks have had a strong trajectory of revenue growth even as the number of providers has increased.   

Although weekly job postings on LinkedIn for seventeen bellwether expert networks faltered during the height of the pandemic, postings have rebounded strongly in the third and fourth quarters of 2020.  As of mid-November, expert network recruiting was nearly back to mid-March levels. 

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. Asia remains under-penetrated relative to other regions. “We’re seeing strong growth from Asia-based expert networks,” said study co-author Max Friberg of Inex One.  “I think Asia is a huge growth area, but Europe also has additional potential.  If Europe and APAC get to the US consumption levels, the market would almost double.”  

The 2020 Expert Network Market Sizing study includes information on key client segments, as expert network revenues have expanded beyond their hedge fund origins. Diversification continues to provide potential for the industry to deepen its footprint in under-penetrated areas. “I see further opportunity for expert networks in the consulting segment, as more consulting projects beyond the typical due diligence exercises use experts,” said Friberg. “Corporates are another sector for expansion.”      

The 2020 Expert Network Market Sizing study includes Excel worksheets detailing revenues for the top 40 expert networks from 2015 through 2020.  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://sellfy.com/expert-network-market-data/.

Our Take

In an interview with Integrity Research, AlphaSights co-CEO Max Cartellieri argued that the expert network industry has potential to grow to $5 billion and higher.  Adjacent markets such as strategy consulting (~$100 billion), B2B information services (~$200 billion), and market research (~$30 billion) represent potential growth areas for expert networks. 

The expert network industry has attracted many new entrants over the last decade, prompting greater competition.  As a result, the industry has become more innovative, as expert networks add new services alongside their core expert consultation offering.  Industry leader GLG expanded staff focused on surveys and ‘strategic projects’ (small consulting engagements).  Third Bridge has focused resources on its Forum product, a research service targeted to asset managers.  New entrants such as Prosapient, Techspert.io and NewtonX have emphasized new technologies, seeking to improve expert sourcing through natural language processing and machine learning.   

Increased competition has also put pressure on fees, which could ultimately spur overall industry growth if volume gains offset lower prices.  Volume growth in more cost-conscious client segments such as corporates and in regions like Europe and Asia could surpass fee compression.

Along with alternative data and ESG research, expert networks have been a bright spot in an otherwise grim research industry environment.  Despite a coronavirus-induced pause in growth, the 2020 Expert Network Market Sizing study reinforces the view that expert network industry prospects remain auspicious.   

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About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email: Sanford.Bragg@integrity-research.com

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