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 Respondents Average Growth Rate

“We’re for it.” 363 63.94% “We have mixed feelings.” 187 18.33%

“We’re against it.” 18 18.73%

Years in Business Respondents Average Growth Rate 1 to 2 years 53 120.98% 3 to 5 years 114 34.50% 6 to 10 years 164 31.43% 11 to 15 years 137 114.88% 16 to 20 years 117 12.92% 21 to 30 years 85 17.49% More than 30 years 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?

Percent 2010

Percent 2011

Percent Change

Translation 60.16 59.32 -1.40 Multimedia localization 9.48 10.20 7.62 Software localization 18.27 16.56 -9.36 Website globalization 19.64 18.31 -6.79 Technology / software 8.65 6.91 -20.15 International testing / QA 6.18 5.81 -6.01 Internationalization services 6.32 4.06 -35.75 Business process outsourcing 3.85 2.74 -28.76 On-site interpreting 12.36 13.71 10.90 Telephone interpreting 7.42 7.79 5.02 Video interpreting 2.47 3.62 46.41 Subtitling 5.49 5.59 1.74 Voice-over / dubbing / narration 7.42 6.47 -12.78 Transcreation 4.53 4.61 1.70 Other services 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

  Don’t immediately assume the low cost = low quality

  What to do about low-cost competition: out-market, out-

sell, and out-perform them

  Yes, prices could eventually increase – but it’s 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

Insight for global market leaders