Trends in Translation Pricing - Common Sense Advisory

Trends in Translation Pricing Falling Rates Accompany Changes in Economy and Buying Behaviors By Donald A. DePalma and Robert G. Stewart September 2012

Trends in Translation Pricing By Donald A. DePalma and Robert G. Stewart September 2012 Copyright © 2012 by Common Sense Advisory, Inc., Lowell, Massachusetts, United States of America. Published by: Common Sense Advisory, Inc. 100 Merrimack Street Suite 301 Lowell, MA 01852-1708 USA +1.978.275.0500 [email protected] www.commonsenseadvisory.com

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Trends in Translation Pricing

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Table of Contents Topic........................................................................................................................................................ 1 Major Findings from Our Survey of Translation Providers..........................................1 Structure of This Report.....................................................................................................1 Findings.................................................................................................................................................. 3 A Brief Description of the Survey and Methodology ....................................................3 The Bottom Line: Most Rates Plunged Since 2010..........................................................3 Just What Does “Translation” Mean Anyway? ..............................................................9 Some Vendors Assess Project and Management Fees..............................................9 Rates Typically Include More than Just Translation ..............................................10 Have Special Requirements? Expect to Pay to Have Them Met...........................11 Translation Suppliers Also Do the Heavy Lifting for Content ...................................14 Marking Up and Publishing Text Often Accompany Translation .......................14 Developing Content Assets Yields More Fees ........................................................14 Business Factors and Automation Yield Discounts .....................................................15 Reasons for Discounts Cover a Broad but Predictable Range...............................15 Translation Memory Repetitions and Fuzzy Matches Lower Price .....................16 Automation Use Holds Steady among Translation Providers .............................17 Post-Edited Machine Translation Will Further Reduce Invoices .........................19 Summary of Findings from the Survey on Translation Rates ....................................21 Analysis ................................................................................................................................................ 22 A Paradox: Rising Demand, Shrinking Supply, but Declining Rates........................22 First, the Good News about the Translation Business ...........................................22 Now for Some Bad News: Macroeconomic Forces Depress Rates .......................23 Language Sector Issues Further Deflate Rates ........................................................25 Implications ......................................................................................................................................... 27 The Market for Translation Is What It Is – Make the Most of It .................................27 Will Translation As We Know It Fade into Obsolescence? .........................................28 Localization Maturity Divides Buyers into Haves and Have-Nots .....................28 Translation Providers Will Find Their Natural Clients .........................................29 Both Buyers and Suppliers Need to Invest in the Future............................................29 Methodology ....................................................................................................................................... 31 History of the Translation Pricing Survey.....................................................................31 The 2012 Study on Translation Pricing ..........................................................................32 The Demographics of Our Respondents..................................................................32 How We Collected and Analyzed the Data.............................................................34 Details about the Survey, Its Questions, and Decisions.........................................34 About Common Sense Advisory ..............................................................................36 Future Research...........................................................................................................36 Applied Research and Advisory Services ...............................................................36

Copyright © 2012 by Common Sense Advisory, Inc. Unauthorized Reproduction & Distribution Prohibited

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Figures Figure 1: Translation Per-Word Rates Have Fallen Since 2008.........................................4 Figure 2: Rates for Most Language Pairs Declined Since 2010..........................................8 Figure 3: Macroeconomic and Market Forces Compress Translation Rates .................24 Figure 4: Location of Pricing Survey Respondents...........................................................33

Tables Table 1: Rates Changes Since 2008 and 2010 for Top 30 Online Languages ...................5 Table 2: Translation Rates per Word for Top 30 Languages into English .......................6 Table 3: Translation Rates per Word from English into Top 30 Languages ...................7 Table 4: Average Fees for Project Set-up and Management ..............................................9 Table 5: The Services that Suppliers Include in the Prix Fixe..........................................11 Table 6: Suppliers Charge for Deeper Review Services ...................................................11 Table 7: Urgency or Special Handling Raises the Cost of Translation...........................12 Table 8: Specialized Content Can Add to the Bill .............................................................12 Table 9: Providers Bill Multimedia Tasks by the Hour....................................................13 Table 10: Translators Charge More When Working on Localization Projects ..............13 Table 11: Formatting and Publishing Tasks Incur Additional Charges ........................14 Table 12: Content Asset Development Generates Higher Hourly Fees.........................15 Table 13: Suppliers Discount for a Variety of Factors ......................................................16 Table 14: Translation Automation Raises Buyer Expectations for Discounts...............17 Table 15: Large LSPs Favor More Translation Automation ............................................19 Table 16: Post-Edited Machine Translation Is Part of Most LSP Futures ......................20 Table 17: Large LSPs Favor More Translation Automation ............................................20 Table 19: Responses for Surveys from 2004 to 2012 .........................................................33

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Topic Translation prices have tumbled in the two years since Common Sense Advisory last surveyed what providers charge for their work. In this report, we review the results of our 2012 study of translation rates for 222 language pairs from 3,772 providers in 114 countries. Our data includes responses from an online survey and rate tables from freelancer websites. For detailed rates for specific language pairs, see “Translation Pricing by Language Pair” (Sep12). That report includes the full set of translation rates for all 222 combinations. Pricing for other language-related services will be revealed in a subsequent report.

Major Findings from Our Survey of Translation Providers The broad decrease in pricing follows a pattern that we have observed throughout our long-term research. Why are rates falling? In our 2010 study we observed that global supply, advances in technology, economic issues, and more aggressive buyers conspired to drive down the prices of most mega-languages since our 2008 report. Our Analysis this year confirmed those trends. However, we also found that changes to the formula for translation – that is, just what suppliers include in their rates – have affected pricing.

Structure of This Report This report contains the following sections: 

The Findings summarize translation rates and pricing changes, centering on comparisons with 2010 data for our benchmark group of the top 30 online language pairs. They are ranked by their economic potential (see “ROI Lifts the Long Tail of Languages in 2012,” Jun12). This section also presents data that pertains to all language pairs in our study, including project management fees, set-up charges, other services that are bundled with the base rates or that generate extra charges, discounts, and the financial impact of translation technology use.

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The Analysis highlights the trends that we observed in the data and evaluates the impact on buyers and suppliers.


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The Methodology reviews the history of our pricing research, identifies previous research on the topic, and describes our approach. It includes a description of how we collected the data, who responded to our survey, and important details about our analysis. It also details the dataset – the languages compared in the Findings represent just 30 of the 222 for which we calculated prices and 593 in total for which we collected rate data.

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About Common Sense Advisory Common Sense Advisory, Inc. is an independent research firm committed to objective research and analysis of the business practices, services, and technology for translation, localization, and interpreting. With its research for both Global Leaders and Industry Providers, Common Sense Advisory endeavors to improve the quality and practice of international business, and the efficiency of the online and offline operations that support it. To find out more about our research and how to become a member: 

E-mail us [email protected].

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Visit www.commonsenseadvisory.com.

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Call +1.978.275.0500.

Future Research Common Sense Advisory seeks interviewees from the community of people involved in building business applications for international use. If you would like to be interviewed or have clients who would like to share their experiences, please e-mail us at [email protected]. We anonymize participants and hold all information in the strictest confidence.

Applied Research and Advisory Services This report and other Common Sense Advisory research into the best practices of business globalization serve as the foundation for our Applied Research and Advisory Services including International Customer Experience Assessments, Vendor Selection, Localization Business Process Audits, Globalization Excellence and Optimization Assessments, and Globalization Roadmaps. E-mail us at [email protected] for more information.

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