Market Research Project Profitability: Where Profits Go

Tracking market research project profitability requires more than comparing the project fee with sample costs. Research agencies also need to account for internal staff time, supplier expenses, respondent incentives, data processing, and any additional work completed during the project.

Every market research project has two main types of costs. The first is direct cost, which includes sample purchases, respondent incentives, hourly interviewers, translation, coding, and outsourced data processing. The second is internal staff time spent on project management, survey scripting, data processing, analysis, and reporting.

Project profit is the amount remaining after deducting both types of costs from the client fee. To calculate it accurately, agencies need to track these expenses against the same project record, from the initial quotation to the final invoice.

OnGraph’s guide to market research supplier management software explains how agencies can manage supplier rates and compare projected costs with actual expenses. This article focuses on how direct costs and staff time affect profitability, how to track margins throughout a project, and which financial information research teams should monitor.

Understand the Project Pricing Model

Before calculating profitability, research agencies need to understand how the project is priced. Different pricing models determine which costs the agency must absorb and which can be passed on to the client.

The three common pricing models are fixed-fee, per-complete, and cost-plus.

The pricing model should be recorded before the project begins, along with assumptions about incidence rate, interview length, sample source, and staff hours.

Industry guidance also supports separating these costs clearly.

ISBA’s guide to working with market research agencies, endorsed by the Market Research Society (MRS) and first published in 2011, explains that adding a margin to third-party costs can be reasonable when the agency performs additional work.

MRS’s 2012 recommendations to the UK Government Procurement Service also recommended separating data collection costs from advisory services, including staff time spent interpreting research findings.

Similarly, ESOMAR’s guideline on how to commission research recommends documenting assumptions such as interview length, contact rates, qualification rates, provisional pricing, and additional analysis or presentations.

These details matter because they determine which changes can be discussed with the client and which costs the agency may need to absorb.

Understand the Difference Between Markup and Margin

Markup and margin are often confused, but they measure different things.

Markup is calculated as a percentage of cost, while margin is calculated as a percentage of the selling price.

For example:

• Project cost: $10,000
• Markup: 25%
• Client price: $12,500
• Profit: $2,500
• Profit margin: 20%

A 25% markup does not produce a 25% margin.

Agencies should use the correct calculation when preparing quotations and reviewing project profitability.

Direct Costs vs. Staff Time: What Research Agencies Need to Track

Research projects involve both external delivery costs and internal employee time.

Direct costs generally include expenses associated with collecting and processing research data. Internal staff costs cover the work performed by salaried employees throughout the project.

Both cost categories affect profitability, but their relative importance varies by research methodology and business model.

What Industry Financial Reports Show

Ipsos’s 2025 Universal Registration Document defines direct costs as external variable expenses associated with data collection, including third-party services, hourly temporary staff, and fieldwork subcontractors.

According to its 2025 annual results:

• Revenue was €2,524.7 million.
• Direct costs were €813.7 million, representing 32.2% of revenue.
• Staff costs, including share-based compensation, were €1,129.6 million, representing 44.7% of revenue.

YouGov’s 2025 Annual Report includes panel incentives, third-party panel purchases, data costs, panel acquisition amortization, and hourly CATI staff within cost of sales.

For the year ended July 2025, YouGov reported cost of sales equivalent to 17.8% of revenue, while staff costs represented 51.7%.

These figures demonstrate that staff expenses can be a major part of a research company’s cost structure.

However, company-level payroll includes sales, finance, technology, management, and other functions. It should not be treated as a direct measure of staff time spent on individual research projects.

Business models also make a difference. Agencies that purchase most of their sample from external suppliers may have higher direct costs than companies operating their own panels or selling subscription-based data products.

The ISBA guide suggests that, as a broad rule of thumb, running and interpreting quantitative research can cost approximately as much as carrying out the research itself. For qualitative projects, executive time often accounts for a larger share of costs.

Why Direct-Cost Margin Is Not Enough

YouGov’s 2025 financial reporting also shows why gross margin alone cannot explain overall profitability.

Its Research segment, covering omnibus, self-service, custom research, and trackers, reported a gross margin of approximately 79% and an adjusted operating margin of 11% before unallocated costs.

Its subscription-based Data Products segment reported a gross margin of approximately 82% and an adjusted operating margin of 31%.

Although the gross margins were relatively close, operating margins differed considerably.

The segment disclosures do not identify exactly how much of that difference came from project staff time, technology, sales, or other administrative expenses.

Still, they show why research agencies should track more than direct sample costs when evaluating profitability.

Track Five Stages of Market Research Project Margin

A research project’s profitability changes as work progresses.

Instead of checking margin only when the project closes, agencies should measure it at five stages: quoted, booked, field-adjusted, reconciled, and closed.

These are five points in the project lifecycle where the same underlying profitability calculation is updated, rather than five separate accounting definitions of profit.

1. Quoted Margin

Quoted margin is the expected profit calculated when preparing the client proposal.

It depends on estimated sample costs, respondent incentives, interview length, incidence rate, and staff hours by role.

For example, an agency may estimate that a project will require 40 hours of project management, 30 hours of scripting, and 50 hours of data analysis.

These estimates should be included in the quotation rather than treating staff time as an indirect expense.

Consistent quotation calculations are an important function of bid management software for research agencies.

2. Booked Margin

Booked margin is calculated once the client approves the project through a signed proposal, contract, or purchase order.

At this stage, the agency should record an approved budget covering each direct-cost category and estimated staff hours.

This becomes the baseline against which future cost changes are measured.

Any additional work should be recorded as a scope change, whether the client agrees to pay for it or the agency absorbs the cost.

3. Field-Adjusted Margin

Field-adjusted margin reflects the latest profitability forecast while fieldwork is running.

It combines actual costs already incurred with estimated costs required to finish the project.

For example, a lower-than-expected incidence rate may increase the number of respondents suppliers must contact to deliver the required completes.

This can increase sample costs and extend the time project managers spend coordinating fieldwork.

Research agencies should update the forecast as actual supplier performance becomes available.

OnGraph’s guide to tracking quotas across multiple suppliers explains how supplier-level and quota-level monitoring supports fieldwork cost control.

4. Reconciled Margin

Reconciled margin is calculated after accepted completes, rejected responses, supplier charges, and client invoices have been reviewed.

This stage accounts for adjustments such as removed respondents, replacement completes, supplier credits, and billing differences.

Research teams need to confirm that the number of payable completes matches the relevant supplier agreements.

OnGraph’s guide to automated invoicing software for research agencies covers related billing and reconciliation workflows.

5. Closed Margin

Closed margin is the final profitability figure after all project costs have been recorded.

This includes supplier invoices, internal staff hours, approved changes, write-offs, credit notes, and other applicable adjustments.

The final result should be compared with the booked margin to identify where the project gained or lost profitability.

All five stages should include staff time. At quotation and booking, use estimated hours; during fieldwork, combine actual hours with the estimated hours remaining; and at close, use finalized actual hours.

Agencies also need a consistent approach to revenue recognition for work in progress. Ipsos, for example, describes recognizing gross margin on studies in progress using percentage of completion and estimated revenue and costs at completion.

For internal project reporting, the chosen revenue recognition method should be documented so that open and closed projects can be compared consistently.

Example: How to Calculate Market Research Project Profitability

Consider a research agency delivering an online quantitative study for a client.

The following figures are illustrative and show how direct costs and staff time affect the final project margin.

The basic calculation is:

Project Profit = Project Fee − Direct Costs − Staff Time Costs

Project Profit = $20,000 − $8,000 − $5,000 = $7,000

To calculate the profit margin:

Project Margin (%) = (Project Profit ÷ Project Fee) × 100

Project Margin = ($7,000 ÷ $20,000) × 100 = 35%

If the agency tracks only direct costs, the project appears to have a 60% margin after direct costs.

Once internal staff time is included, the margin falls to 35%.

This example assumes staff costs are calculated using the agency’s chosen loaded cost rates. The exact margin depends on how the agency allocates overhead and defines project-level profitability.

The calculation shows why sample cost tracking alone can give an incomplete picture of project performance.

How Direct Costs and Staff Time Increase Together

One of the biggest challenges in research project profitability is that additional direct costs often create extra work for internal teams.

For example, a delay in fieldwork may increase supplier costs while also requiring more project management, quality checks, and reporting time.

Research agencies should monitor both effects when project conditions change.

1. Lower-Than-Expected Incidence Rates

Incidence rate measures the proportion of screened respondents who qualify for a study, according to the definition used for that project.

When actual incidence is lower than expected, suppliers may need to screen more respondents to deliver the required completes.

The Insights Association’s Global Data Quality Benchmarking Report for the first half of 2025 analyzed approximately two million records from 51 companies.

It reported the following differences between sold and actual incidence rates:

Lower incidence can increase the effective cost per complete.

It may also extend fieldwork, require additional supplier coordination, and increase the hours spent by project managers.

Agencies should review both the additional sample expense and the internal time needed to complete the study.

2. Quality Removals and Replacement Interviews

Quality checks can also affect project profitability.

The same Insights Association benchmark found that research agencies screened out 9.4% of records for quality before or during surveys, compared with 13.7% for suppliers.

After qualification, a further 6.6% and 7.4% of completes were removed, respectively. The reported post-qualification removal rate for general B2B studies was 18.9%.

When responses are removed, the agency may need additional interviews to reach the target.

Depending on supplier reconciliation rules, some removed responses may be credited, while others may remain chargeable.

Replacement interviews can also require additional staff time for quota management, fieldwork coordination, data checking, and updated reporting.

3. Questionnaire Revisions

Changes to a questionnaire after project approval can affect both cost categories.

A late revision may require additional scripting, testing, translation, and client review.

If the change happens after fieldwork begins, some previously collected interviews may no longer be usable.

Longer questionnaires can also increase sample costs when supplier pricing depends on interview length.

The Insights Association benchmark reported that abandonment and removals increased with longer surveys.

Agencies should record questionnaire revisions as scope changes and estimate their impact on both direct costs and staff hours.

4. Additional Analysis and Reporting

Some projects require more analysis or reporting than originally agreed.

Examples include additional data cuts, revised weighting, extra presentation rounds, and new reporting formats.

The ISBA guide notes that presenting research findings and work beyond basic feedback may involve additional charges.

ESOMAR also recommends identifying the cost of extra analyses, meetings, and presentations in research quotations.

For fixed-fee projects, this additional work reduces profitability unless it is approved and charged separately.

A supplier interviewed in Quirk’s May 2025 Q Report also emphasized that scope changes after quotation and approval can affect project price or delivery timelines.

Research agencies should record these changes when they happen rather than discovering the additional costs during project closure.

How to Calculate Staff Time Costs

Tracking staff hours is useful only when those hours are assigned a cost.

Different research roles have different cost structures, so using one average hourly rate for every employee can produce misleading results.

Westat’s 2024–25 GSA Price List lists an hourly billing rate of $41.90 for a telephone center interviewer and $360.78 for a Project Director I.

These are commercial billing rates, not the company’s internal employee costs. However, they demonstrate why different research roles should not be treated as having the same hourly value.

Use Loaded Cost Rates by Role

A loaded cost rate includes salary, employment-related expenses, and any overhead allocated under the agency’s costing policy.

A simplified calculation is:

Loaded Hourly Cost = Annual Loaded Employment Cost ÷ Expected Project-Working Hours

For example, if a role has an annual loaded cost of $80,000 and is expected to contribute 1,600 project-working hours:

Loaded Hourly Cost = $80,000 ÷ 1,600 = $50 per hour

A project requiring 40 hours of that role would carry a staff cost of $2,000.

This is an illustrative example, not an industry benchmark.

Using role-based rates also helps agencies avoid exposing individual salaries in project reports.

Account for Staff Utilization

Utilization matters because employees do not spend every working hour on billable projects.

They may also attend internal meetings, complete training, support sales activities, or perform administrative work.

If the loaded cost rate is calculated using all available working hours rather than expected project-working hours, the cost assigned to projects may be understated.

Agencies should also ensure that their margin targets match the overhead included in their loaded cost rates.

If actual utilization falls below the assumed level, some employment costs may remain unrecovered even when individual projects meet their planned margins.

Compare Estimated and Actual Staff Hours

Research agencies should compare planned and actual hours across major activities, including:

• Project management.
• Survey scripting and testing.
• Data processing.
• Data analysis.
• Reporting and presentations.

The importance of checking estimates against actual outcomes is supported by Buehler, Griffin, and Ross’s 1994 study on the planning fallacy.

In that study, students predicted that they would complete their theses in an average of 33.9 days, but the actual average was 55.5 days.

Although the study did not examine market research agencies, it illustrates how people can underestimate the time required to complete complex work.

Agencies can improve future quotations by comparing estimated hours with actual hours after each project.

Compare Profitability by Client, Research Method, and Project Size

A project’s final margin shows whether that particular job was profitable.

Comparing results across multiple projects helps agencies understand which types of work are more profitable and where pricing needs to change.

Research teams should review closed margins across several categories.

Why Small Projects Need Attention

Small research projects often require many of the same setup activities as larger studies.

These may include briefing, questionnaire review, scripting, testing, and reporting preparation.

Because much of this work is relatively fixed, staff time can represent a larger percentage of the fee on smaller projects.

Agencies should consider minimum project fees or appropriate setup charges when preparing quotations.

Why Recurring Projects Can Be More Efficient

Recurring studies, such as trackers, may benefit from established questionnaires, reporting templates, and familiar workflows.

Once the initial setup is complete, later waves may require fewer staff hours.

However, recurring projects are not automatically more profitable.

Supplier costs, staff rates, and other expenses can increase over time, especially when contracts run for several years.

ESOMAR’s commissioning guidance recommends documenting price-indexing arrangements where applicable.

Agencies should also monitor clients who regularly request additional analysis, questionnaire revisions, or reporting changes.

These patterns can reduce profitability even when the original project pricing appears reasonable.

What Market Research Project Tracking Software Should Include

To calculate profitability across all five project stages, agencies need a shared record that connects commercial, operational, and financial information.

Research-specific software should support the following information, either directly or through integrations.

1. Pricing Model and Quote History

The project record should identify whether pricing is fixed-fee, per-complete, or cost-plus.

It should also store quotation versions, pricing assumptions, and any markup applied to pass-through costs.

2. Approved Project Budget

The budget should include direct costs by supplier, market, and service category, along with estimated staff hours by role.

This allows teams to compare approved costs with actual expenses throughout the project.

3. Actual Supplier and Sample Costs

Research teams need visibility into accepted completes, CPI, supplier charges, and any reconciliation adjustments.

For international projects, the system should also record transaction currencies and the exchange rates used in the original budget and final invoices.

4. Staff Hours and Role-Based Costs

Internal staff hours should be connected to the project and costed using approved role-based rates.

These records may come from an existing timekeeping or resource management system.

Hourly interviewer costs should be captured through the relevant fieldwork or payroll process.

5. Scope Changes and Additional Work

Every scope change should include a description, approval status, expected additional cost, and whether the client will be charged.

The impact on supplier expenses and internal staff hours should be recorded separately.

6. Invoices, Revenue, and Adjustments

The project record should connect client invoices, supplier invoices, revenue recognition, credit notes, and write-offs.

This makes it easier to calculate reconciled and closed margins without relying on separate spreadsheets.

OnGraph’s guide to market research project management tools compares software used to manage research operations.

Research-specific platforms can support bidding, supplier management, and fieldwork tracking, while timekeeping and accounting information may need to come from connected systems.

For a broader explanation of these workflows, see OnGraph’s guide to market research project management software.

Market Research Project Profitability Checklist

Before closing a project, research agencies should confirm that all relevant costs and financial adjustments have been recorded.

• Supplier invoices match accepted completes and agreed rates.
• Respondent removals, replacements, and supplier credits have been reconciled.
• Actual staff hours have been submitted and costed by role.
• Scope changes and additional work have been recorded.
• Currency differences and other direct-cost adjustments are included.
• Client invoices, credit notes, and write-offs have been reviewed.
• Final project margin has been compared with the booked margin.

Completing these checks helps agencies identify cost overruns, improve future quotations, and understand why individual projects performed differently from their original budgets.

Where OnGraph Fits

OnGraph develops custom and white-label software for market research agencies and research companies.

Its white-label market research platform describes capabilities for managing bidding, fieldwork, supplier costs, and invoicing within connected research workflows.

Published features include smart bidding for CAWI, CATI, and hybrid research projects, real-time tracking of survey progress, completes, call outcomes, and costs, along with client and supplier invoicing and payment reconciliation.

Team performance dashboards also support operational visibility across research projects.

These capabilities form part of OnGraph’s broader market research software development services.

For profitability tracking, agencies may also need to connect their existing staff timekeeping and accounting systems.

OnGraph’s published platform capabilities cover bidding, fieldwork, and invoicing, but do not explicitly list salaried staff timesheets as a standard feature. A custom implementation can be scoped to connect the required data sources.

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Final Thoughts

Tracking market research project profitability requires a clear view of both direct costs and internal staff time.

Sample expenses, respondent incentives, and supplier invoices are important, but they do not show the full cost of delivering a research project.

Agencies also need to track staff hours, questionnaire changes, additional analysis, and other work that affects the original budget.

Measuring margins at five stages — quoted, booked, field-adjusted, reconciled, and closed — helps teams identify cost changes before they become larger problems.

By connecting supplier costs, staff time, project budgets, and financial records, research agencies can improve cost control, prepare more accurate quotations, and make better pricing decisions for future projects.