Language Services Market Trends

Nataly Kelly Chief Research Officer

Twitter:@CSA_Research, @natalykelly
Copyright 2011 by Common Sense Advisory, Inc.

About Common Sense Advisory

Global business and language research
Translation, localization, globalization, etc. Dedicated multinational research team

Independent industry research firm

Vendor-neutral, buyer-agnostic Qualitative and quantitative research Interdisciplinary demand-supply methodology

Clients in 30+ countries

How we conduct research

1. Growth

Growth Common Sense Advisory calculates that the market for outsourced language services is worth US$31.438 billion in 2011. Top 50 = US$4 billion 912 companies surveyed / total LSP population of 25,256 Market growth from 2009 to 2010 (actual reported supply-side change in revenue) was 7.41%.
Source: The Language Services Market: 2011, Common Sense Advisory, Inc.

Actual reported change in revenue from 2008 to 2009

Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

Actual reported change in revenue from 2008 to 2009

Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

Technology and experience affect growth

Attitude toward Technology Were for it. We have mixed feelings. Were against it. Years in Business 1 to 2 years 3 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 to 30 years More than 30 years Respondents 363 187 18 Average Growth Rate 63.94% 18.33% 18.73%

Respondents Average Growth Rate 53 120.98% 114 34.50% 164 31.43% 137 114.88% 117 12.92% 85 17.49% 38 8.22%

Actual reported change in revenue from 2008 to 2009

Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

Which Services Are Growing the Fastest? Translation Multimedia localization Software localization Website globalization Technology / software International testing / QA Internationalization services Business process outsourcing On-site interpreting Telephone interpreting Video interpreting Subtitling Voice-over / dubbing / narration Transcreation Other services

Percent Percent Percent 2010 2011 Change 60.16 59.32 -1.40 9.48 10.20 7.62 18.27 16.56 -9.36 19.64 18.31 -6.79 8.65 6.91 -20.15 6.18 5.81 -6.01 6.32 4.06 -35.75 3.85 2.74 -28.76 12.36 13.71 10.90 7.42 7.79 5.02 2.47 3.62 46.41 5.49 5.59 1.74 7.42 6.47 -12.78 4.53 4.61 1.70 5.08 6.14 20.81

Source: The Language Services Market: 2011, Common Sense Advisory, Inc.

2. Fragmentation

Source: The Language Services Market: 2011, Common Sense Advisory, Inc.

3. Maturity

Source: The Localization Maturity Model 2.0, Common Sense Advisory, Inc.

Source: The Localization Maturity Model 2.0, Common Sense Advisory, Inc.

4. Vendor Management

Source: How Buyers Manage Translation Suppliers, Common Sense Advisory, Inc.

Source: How Buyers Manage Translation Suppliers, Common Sense Advisory, Inc.

Source: How Buyers Manage Translation Suppliers, Common Sense Advisory, Inc.

5. Speed

Global social media

6. Pricing

Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

What you need to know about pricing

Language combinations involving some languages have stabilized; room for price compression still exists for many languages Quality matters more for more mature buyers, yet very few mature buyers exist Dont immediately assume the low cost = low quality What to do about low-cost competition: out-market, outsell, and out-perform them Yes, prices could eventually increase but its unlikely
Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

7. Transcreation

Transcreation vs. translation

Purpose evoke a response or reaction Project types more limited, marketing & advertising Providers specialist LSPs, MLVs, ad agencies Volumes less than 5,000 words Turnaround time hours or days Starting point a creative brief Resources bilingual creative writers Costs more $$$, billed by hour or project, not by word
Based on 30 interviews and a survey of 380 transcreation participants

8. Crowdsourcing

What you may not know about crowdsourcing

Reasons?
Speed and quality

The people behind it?

Often not the same people who buy localization/translation elsewhere in the organization

Why are translators willing to work for free?

Mostly not translators, but bilinguals with subject matter expertise

Three crowdsourced translation models

Cause-driven
Response to floods in Pakistan, earthquakes in Haiti Media demand for foreign content

Product-driven
Symantec Adobe

Outsourcing-driven
servioTranslate OneHourTranslation

How translators make money from crowdsourcing Community moderation Editing, review, validation Terminology management Project management Recruitment

9. Machine Translation

10. Globalization

Other factors related to globalization

Not only are more of the buyers going global More LSPs are too! Global trade critical indicator to pay attention to for language pairs and growth sectors Content growth and web globalization

Final thoughts
The age of the empowered buyer
Quality measurement driven by buyers More innovation happening on buyer side With maturity comes empowerment

Need for innovation and collaboration

Growth has stifled innovation to a great degree Fragmentation has thwarted collaboration in many ways Tremendous desire among buyers to throw everything over the fence

How will these trends affect our future strategy?

Q&A

Thank you!
Nataly Kelly nataly@commonsenseadvisory.com +1.978.275.0500 x1203 Research: www.commonsenseadvisory.com Blog: www.globalwatchtower.com Twitter: @CSA_Research, @natalykelly

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