Language Services Market Trends

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1 Language Services Market Trends Nataly Kelly Chief Research Copyright 2011 by Common Sense Advisory, Inc.

2 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

3 How we conduct research

4 1. Growth

5 Growth Common Sense Advisory calculates that the market for outsourced language services is worth US$ billion in 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.

6 Actual reported change in revenue from 2008 to 2009 Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

7 Actual reported change in revenue from 2008 to 2009 Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

8 Technology and experience affect growth Attitude toward Technology Respondents Average Growth Rate We re for it % We have mixed feelings % We re against it % Years in Business Respondents Average Growth Rate 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 % Actual reported change in revenue from 2008 to 2009 Source: Language Service Provider Growth Factors, Common Sense Advisory, Inc.

9 Which Services Are Growing the Fastest? Percent 2010 Percent 2011 Percent Change 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 Source: The Language Services Market: 2011, Common Sense Advisory, Inc.

10 2. Fragmentation

11

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

13 3. Maturity

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

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

16

17 4. Vendor Management

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

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

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

21 5. Speed

22

23 Global social media

24 6. Pricing

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

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

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

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

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

30 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, outsell, and out-perform them Yes, prices could eventually increase but it s unlikely Source: Translation and Localization Pricing, Common Sense Advisory, Inc.

31 7. Transcreation

32

33 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

34

35

36

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38

39

40

41 8. Crowdsourcing

42 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

43 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

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

45 9. Machine Translation

46

47

48

49 10. Globalization

50

51 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

52 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?

53 Q&A

54 Thank you! Nataly Kelly x1203 Research: Blog: Insight for global market leaders

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