P.O. Box 183
Opinion Research Corporation is focused on delivering superior marketing, research, management consulting, and technology services to private- and public-sector organizations on a global basis. We are committed to excellence in all that we do, to ethical business practices, and to intellectual leadership in our fields of endeavor. We strive to provide superior returns to our shareholders. We are committed to offering a challenging, diverse, and supportive work environment to our employees; to nurturing the entrepreneurial spirit that fuels our growth; and to improving continually our knowledge, our skills, and our technological capabilities.
Primarily through acquisitions, Opinion Research Corporation (ORC) has evolved into a leading global measurement-based, marketing-services firm to provide businesses and governments with sophisticated market research and teleservices. The company functions as three complementary businesses: ORC International conducts research in global marketing; ORC Macro specializes in research, social marketing, and information technology; and ORC ProTel provides premium-quality teleservices. The company has conducted studies in over 100 countries, supports 31 offices across the United States, Latin America, Europe, Asia, and Africa and operates ten research call centers located in the United States, the United Kingdom, Korea, and Taiwan. ORC's blue-chip multinational clients include 28 of Financial Times Global 100 companies and 27 of US Fortune 100 companies, including 6 of the top 10. The company's services and products include advanced analytics and data modeling, market and social research, demographic and health surveys, data collection and processing, management consulting, information technologies, public-sector research, and premium-quality teleservices. Most of its commercial projects are for businesses selling to other businesses and address issues such as customer loyalty and retention, market demand and forecasting, corporate image, and competitive positioning. Public-sector clients represent virtually every department of the U.S. government, many state and local governments, and non-government organizations around the world. Fortune Small Business magazine lists ORC as one of its "100 Fastest-Growing Small Companies" and Forbes magazine places the company among its "200 Best Small Companies."
1938-67: Pioneering Corporate Market Research
Claude Everett Robinson, while still in his early thirties, published an influential book on the 1928 presidential election, and during 1936-38 developed new scientific sampling techniques for the Gallup Poll. On October 26, 1938, for the purpose of applying the principles of general-public opinion polling to the marketing issues facing America's largest companies, Robinson founded and began to operate Opinion Research Corporation (ORC) in a two-room suite of New York City's Chrysler Building. During that first year, the company's clients included Sears & Roebuck, Standard Oil of New Jersey, The New York Times, Hoover, Time Inc., and General Motors. In 1939, rapid increase of business and a growing staff necessitated the company's move to Princeton, New Jersey. Billings for 1938-39 totaled $41,043; expenses amounted to $46,292. However, ORC had a backlog of work with which to begin a new year.
Seventeen new clients requested more than 60 surveys in 1940. ORC, one of the first organizations to conduct pre-election polling, completed its first political survey in 1941. The company also tested advertising copy and convinced a group of U.S. business leaders of their need to know about social and economic trends. To this end, in 1943 the company introduced the ORC Public Opinion Index which, for 40 years, included monthly surveys of how basic opinion trends affected business and commerce. In 1945, ORC initiated research on how consumers accepted new products and services and began biennial studies of how financial-security analysts evaluated industries and companies in the United States. Additionally, ORC conducted its first benchmark studies of trademark design, brand image, and product placement--and, for General Motors, conducted its first-ever survey of employee attitudes.
In the early 1960s ORC launched CARAVAN, a weekly shared-cost telephone survey that allowed multiple clients to gather the best of timely information at a relatively low cost. By 2001, CARAVAN was a twice-weekly national survey and the oldest continually running consumer omnibus survey in the nation. The company also became the leading polling firm for the U.S. Republican Party and its presidential candidates. Members of ORC's highly qualified professional staff--many of whom held advanced university degrees--were drawn from many disciplines and specializations. When Robinson died in 1961, the company he founded had expanded its offerings to mirror changing social conditions in the United States; for instance, studies about controlling air and water pollution, about judging the impact of inflation on the public, and about finding ways of attracting youth to business careers.
1968-91: Prosperity, Decline, and Resurgence
In 1968, ORC expanded its services by opening offices in Canada and Mexico. At the end of that year, the company was purchased by the New York-based publishing firm of McGraw-Hill. According to Michael R. Cooper's comment in the October 1998 issue of The ORaCle, an ORC International Associates publication, the companies were not complementary. (Cooper served as ORC's President in 1989 and later also as Chief Executive Officer and Chairman.) "The trade publication Advertising Age," wrote Cooper, "reported 'poor communications' between the companies and quoted an industry source that 'McGraw-Hill really didn't know what it was getting itself into when it acquired ORC.'" In 1975 McGraw-Hill sold ORC to Cambridge, Massachusetts-based Arthur D. Little Inc., a consulting firm also based in Cambridge.
The companies were optimistic about mutual development of their potential: ADL strategy and ORC fact-based analysis. However, 14 years later, ORC had grown either slightly or not at all. The company had prospered "in the '40s, '50s, and '60s [but declined] in the '70s and '80s," Cooper noted in the ORaCle source cited above. When he, John Short (who succeeded Cooper in 1998), and others joined ORC in 1989, they "saw a Company with a rich heritage and a premier pedigree--but without direction. Neglect from its then-owner had left it without motivation and without reason to succeed. The company was bleeding and going nowhere but down," Cooper emphasized.
The new managers, however, saw the possibility for "a new company--[one] with the same name, a new spirit of innovation and devotion to quality performance--but with a new corporate raison d'être," Cooper wrote. Management infused energy into the company and defined a strategy to return it to profitability by providing clients with research-based knowledge--market intelligence that would help companies define their strategic direction and overall profitability. To bring about this turnaround, in 1991 ORC's top management bought the company back from Arthur D. Little, reinstated it as an independent firm, and went public in 1993 by successfully completing an initial public offering (IPO).
1992-97: Strategic Acquisitions and Organic Growth
ORC's top management refined and implemented the vision that had brought the company through the end of the 1980s and the beginning of the 1990s. Founder Robinson had defined the field of corporate market research; however, to stay at the forefront of the industry, ORC needed to increase its national visibility and establish a strong worldwide presence to deal with issues emerging for corporations intent on globalization. During 1992, the company acquired London-based Research by Telephone and in 1993 purchased Gordon Simmons Research Group (GSR), also headquartered in London. GSR was a market-research firm conducting studies for companies, such as Ford Motor Company, Marks and Spenser, and Woolworth, plc.
Next, ORC's 1994 acquisition of Toledo-based Strategic Research and Consulting, Inc. gave it access to the U.S. auto industry; first-ever clients included General Motors, Chrysler Corporation, and Harley Davidson, Inc. The company also opened an office in Detroit and a European Information Centre in London. In 1994, ORC created two syndicated global-research products: CORPerceptions and BrandPerceptions. These programs quantified and compared the value of brand equity and corporate equity for clients throughout Asia/Pacific, Europe, and North America. Furthermore, the development of an international network of preferred-partner research firms increased ORC's marketing power by connecting the company to local-service providers.
In 1995 the company opened ORC Asia as its Hong Kong-based headquarters on that continent; the company also built a new telephone-interviewing call center in Tucson, Ohio. Then, the acquisition of Marketing Information Quest in Korea, of Chicago-based Quality Expectations, and of SIA (a public sector/technology company operating in London and Manchester) further extended ORC's global presence. By year-end 1996, ORC, now known as ORC International, offered many services and products, including measurement and tracking of customer satisfaction, image assessment and competitive positioning, advertising evaluation and tracking, assistance for the introduction of new products, and business panels for executives and professionals. The company focused on client projects that required periodic updating and tracking of information, thereby creating the potential for higher-margin recurring revenues. For fiscal 1996, net revenues increased to $47.27 million from $44.10 million in 1995; net income reached $810,000, compared to a net-income loss of $1.67 million in 1995.
With the acquisition of Korea-based Marketing Information Quest, Taiwan-based Tripro, and Mexico-based Strategic Insight, ORC increased its offices abroad. According to its 1997 Annual Report, ORC's outreach was based on a four-point strategy: l. globalization of its market-research business; 2. strategic extension of modeling and analytics into teleservices; 3. building of differentiated value; and 4. implementation of targeted resource-allocation focused on globalization, teleservices, and differentiation. ORC created TeleScience, an innovative teleservice capability through which in-depth experience in advanced analytics and modeling techniques was applied to superior telemarketing. Furthermore, to add differential value to its products, ORC developed proprietary specialties--such as Market Demand Analysis and Forecasting--which assisted clients for the introduction of new products and, if relevant, the preparation of an Initial Product Offering.
For fiscal 1997, ORC's revenues reached $56.67 million and net income peaked at $1.15 million. Revenues from overseas accounted for 31 percent of ORC's these results. According to Flaherty and Arnaldo's story in the December 13, 1998 issue of Equities, ORC also established longstanding relationships with affiliate companies in major markets around the world.
1998-2000: Expanding Services and Solidifying Global Infrastructure
In 1998, ORC Chairman/CEO/President Michael R. Cooper resigned and was succeeded by John F. Short, the company's former vice-chairman and chief financial officer. The $11-billion market research industry was still "highly fragmented with thousands" of small companies, observed Flaherty and Arnaldo in their Equities essay. "About 90 percent of research firms ... were 'data suppliers' focusing on branded consumer goods (the low end of the industry). ORC, however ... did business-to-business research, applying sophisticated mathematical models and quantitative analysis in order to provide clients with unique market insight."
The 1998, purchase of Lansing, Illinois-based ProTel Marketing, Inc. (renamed ORC ProTel, Inc.) extended the company's core business into teleservices. ORC combined its market-research expertise in segmentation modeling and database management with ProTel's quality teleservices to quantify buyer behavior, optimize targeting of customers, and provide feedback to improve sales. This breakthrough capability, named ORC TeleScience, applied sophisticated modeling techniques to cutting-edge teleservices, thereby lowering the costs of increased sales and the acquisition of customers. "A year-long beta test conducted by a major credit-card company showed that ORC's model resulted in an activation rate 100 percent higher than that of its competitors," noted Flaherty and Arnaldo.
The desire to serve clients in new markets abroad fueled ORC's 1998 acquisition of Macro International Marketing Inc. (renamed ORC Macro International Inc.), a firm supporting businesses and governments worldwide. ORC Macro's substantial government-client business and social research expertise complemented ORC's leading position with corporate clients to create an organization having expanded international capabilities and innovative offerings for government agencies. Continuing integration of ORC's social and business-to-business operations also improved overall efficiency. In September, ORC Macro won an estimated $50 million in new contracts from various federal agencies and in October received a five-year contract, worth up to $14.2 million, from the Department of Health and Human Services.
Outbound telemarketing services for Cendant Corporation, ORC's largest single client, accounted for 18 percent of the company's 1998 revenues. The offering of "global-market research that provides consistent, comparable intelligence across borders and cultures corresponds exactly to marketplace demands," Short commented in the company's 1998 Annual Report. Revenues increased 29 percent to $73.17 million in 1998, from $56.67 million in 1997. This increase was due principally to $15.92 million in revenues generated by ORC ProTel and ORC Mexico, as well as by an increase in market-research revenues in the United States and Great Britain.
The company--with 1999 Internet-related revenues of $6.6 million--also benefitted from owning The Quantum Research Corporation (now a division of ORC Macro), a firm that specialized in delivering Internet-based survey research, data analysis, and dynamic databases for some of the nation's leading science, health, and education organizations. ORC introduced e.Tr@ck--a nationally syndicated research study of online shoppers--that provided e-commerce companies with vital consumer insights gleaned from a complete demographic portrait of the nation's adults, whether or not they shopped online.
In fiscal 1999, ORC posted record financial results for the fourth consecutive year. Revenues peaked at $118.62 million, a 62 percent increase over fiscal 1998 revenues of $73.17 million. The increase resulted principally from revenues generated by ORC Macro, and from improvements in ORC's teleservices business. Net income rose to $2.42 million, compared to a loss of $170,000 in 1998. A Macro client since 1989, the United States Agency for International Development (USAID) accounted for 11 percent of the company's revenues.
2000 and Beyond
In response to a Fortune 1000 financial institution's contract for an Internet-based business panel, ORC developed an Internet B2B (business-to-business) panel, which it began to manage and maintain in February 2000. The panel, consisting of 1,000 executives from small- and medium-sized businesses across the United States, collected and updated information to help the client make decisions about marketing and sales strategies. ORC also created a Syndicated Business Panel consisting of 1,400 middle-market companies; a client could contract for unrestricted access to a panel, but ORC owned the panel and could use it with other clients.
The July ISO 9001 Certification of ORC's offices in Ohio and Michigan placed ORC among the few in its industry to be thus recognized for the quality standardization mandated by ISO 9001. In September, ORC acquired C/J Research, a premier market-research organization with a blue-chip client list that included Walt Disney Company, Wendy's International, Sprint Corporation, and The Chicago Tribune. Furthermore, C/J improved ORC positioning for work with companies dealing with fast-moving consumer goods (FMCG).
In the following month, ORC announced a $17-million increase to its contract with USAID. In November, ORC Macro acquired Maryland-based Social & Health Services, Ltd. (SHS), a leading communications and information-management company. At this time, Forbes magazine recognized ORC "for financial performance over a five-year period in five key criteria, including sales and profit growth, net income, and return on equity," listing the company among its "200 Best Small Companies." Furthermore, in December ORC announced that its SHS unit was among the first organizations to be awarded a subcontract in the federal government's new school-violence-prevention program.
In fiscal 2000, for the fifth consecutive year, ORC reported record earnings. United States market research, in rounded numbers, amounted to 24 percent of revenues, United Kingdom market research to 11 percent, teleservices to 13 percent, and social research to 53 percent. Annual revenues increased 36 percent to $160.91 million and net income grew 31 percent to $3.30 million. Internet-related revenues were $11 million, an increase of 57 percent compared to 1999.
As 2001 got underway, ORC was recognized as one of the few organizations with the skills, technology and systems to effectively administer worldwide social research projects when Eurostat, the Statistical Office of the European Communities, contracted for a series of social research projects across Europe in order to obtain data about social welfare throughout the European Union.
Furthermore, at the request of several government offices, ORC created "fourth generation" search engines, also known as "Deep Search" engines, that probed narrowly and deeply into the Web. At regular intervals, these engines automatically updated all materials available at each site. These Web sites, searchable in several languages, included www.health.org (articles on the prevention of alcohol, tobacco, and illicit drug use) and www.parentsmart.com (over 21,000 articles parents could use to help their children with school work). In March 2001, ORC introduced www.enterpriseworks.org, a powerful, first-of-its-kind search engine for information on efforts to fight poverty and promote sustainable development in Africa, Asia, and Latin America. ORC also won database-management contracts--valued in excess of $14 million over a period of three to four years--from government agencies in both the United States and the United Kingdom. The contracts stipulated that ORC would develop new error-pattern identification technology, design and code record-matching algorithms, and build web portals with multiple layers of embedded access control.
Further recognition was published in the July issue of Fortune Small Business magazine, which listed ORC as one of its "100 Fastest-Growing Small Companies." The choice of companies was based on several key financial criteria, including earnings growth, revenue growth, and total stock return.
When ORC was awarded a $7-million contract by the Centers for Disease Control and Prevention to support the new "Healthy Passages" initiative, the company agreed to serve as the coordinating center for data collected by three prominent universities. CDC also gave ORC a $4.7-million, five-year contract, to implement National Youth Risk Behavior Surveys (YRBS), a project ORC had supported since 1988. At the end of the third quarter of 2001, ORC's Social Research Business had won approximately $85 million in new contracts, thereby providing a foundation for solid growth in fiscal 2002, Chairman Short observed in an early October news release.
Since its inception in 1938, Opinion Research Corporation had known good times and hard times but nothing quite so bad as the events of 2001. The effects of an economic recession, an era of terrorism introduced by the demolition of New York City's World Trade Center and part of Washington D.C.'s Pentagon, and continuing war in Afghanistan brought many companies to either the brink of bankruptcy or total destruction. Nevertheless, as Chairman Short commented in an October 25 news release, ORC was "able to sustain revenue growth and positive cash flow during these challenging times," although weakness in national market research and teleservices made for lower-than-expected financial results.
For the first nine months of 2001, revenues were $132.9 million, or 13 percent, when compared to $117.2 million for the first nine months of 2000. Chairman Short continued his October comment by saying he strongly believed that "our diversification in the products we offer, the markets we serve and the worldwide geographies in which we operate, will provide a strong foundation and help the company achieve long-term growth and succeed in this difficult economic environment." Indeed, judging from the company's past history, it is possible to believe that ORC, with its wealth of intellectual capital and sophisticated technological infrastructure, would continue to thrive as it lived up to its motto and provided "Insight Beyond Measure."
Principal Subsidiaries: European Information Centre Limited (United Kingdom); Macro International Inc.; Opinion Research Corporation, S.A. de C.V. (United Kingdom); O.R.C. International Ltd. (United Kingdom); ORC Consumer, Inc.; ORC Holdings, Ltd. (United Kingdom); ORC Korea, Ltd.; ORC International Holdings, Inc. (Cayman Islands); ORC Protel, Inc.; ORC Teleservices Corp.; Social & Health Services, Ltd.
Principal Competitors: Harris Interactive; Information Resources, Inc.; Market Facts, Inc.; NFO WorldGroup, Inc.; The NPD Group, Inc.; Taylor Nelson Sofres plc.