News notes
Minneapolis research firm Iconoculture has secured a $10 million financing round led by WaldenVC, a San Francisco venture capital firm. Additional investors include Venture Strategy Partners and General Mills.
St. Petersburg, Fla., media research firm erinMedia issued a press release in late November in which it reported that the Middle District Federal Court ruled in its favor, and against Nielsen Media Research (NMR), in NMR’s attempt to have the court dismiss erinMedia’s federal antitrust suit against NMR. The ruling clears the way for erinMedia to begin conducting discovery and to prepare for trial in this matter. The Court’s order has been posted on erinMedia’s Web site (www.erinmedia.net) as well as on www.weshouldallcount.com.
Netherlands-based information and media firm VNU NV has agreed with IMS Health, Inc. to terminate the planned merger of the two companies. VNU said the two companies decided to call off their merger after shareholders claiming to represent nearly 50 percent of VNU’s outstanding shares said they would not support the transaction under any circumstances. The merger, announced July 11, 2005, would have required approval from a majority of shareholders to be completed. Under the terms of the termination agreement, VNU has agreed to reimburse IMS $15 million for its actual out-of-pocket costs, and pay an additional $45 million to IMS should VNU be acquired pursuant to any agreement entered into within the next 12 months. For its part, IMS has agreed to pay VNU $15 million should IMS be acquired pursuant to any agreement entered into within the next 12 months. Rob Van den Bergh has stepped down as CEO but will remain until the firm’s supervisory board has completed its search for a successor.
Going forward as a stand-alone company, VNU said it will maintain its focus on accelerating the profitable growth of its existing businesses. The company said it also would explore additional steps to maximize shareholder value, including: initiating a program to return approximately EUR 1 billion to shareholders, on top of the regular dividend now in place; expanding current cost-management initiatives to all areas of the company worldwide, possibly including some restructuring; optimizing its portfolio by continuing to evaluate targeted changes that will enhance existing lines of business; and pursuing a listing on the New York Stock Exchange.
Preparations are underway for building a new hospital in Kalkudah, eastern Sri Lanka, which will be named as the Heinrich A. Litzenroth Memorial Ward District Hospital after the GfK management board member who died in the December 2004 tsunami. The two-story hospital building, which will have between 80 and 100 beds, is being financed by donations totaling EUR 300,000 given by the employees and management board of GfK and suppliers working with GfK.
Norway-based Future Information Research Management (FIRM) announced in November that it has submitted an application for public listing at the Oslo Stock Exchange.
Arbitron announced in November that, in answer to the concerns of the NAB Committee on Local Radio Audience Measurement and of the Arbitron Radio Advisory Council, it has decided to revise its plans for including new diary instructions that tell radio survey participants to record listening to Internet and/or satellite radio as well as to over-the-air radio. Arbitron originally intended to modify its diary instructions starting with the Winter 2006 survey. “COLRAM raised the issue with us, and the Arbitron Advisory Council seconded their concerns,” said Owen Charlebois, president, U.S. Media Services, Arbitron Inc., in a company statement. “While we believe that modifying the diary instructions is the right thing to do from a research quality standpoint, Arbitron has decided to address more fully our customers’ concerns with a limited test of the revised instructions in 25 markets in February 2006. Implementation would follow a successful outcome, but not sooner than summer 2006.”
The current diary does not ask respondents to indicate whether they listen to radio stations over the Internet or via satellite services. The revised instructions are intended to capture and report radio listening recorded by respondents regardless of the delivery vehicle.
The revised diary instructions being tested in February 2006 are meant to clarify to respondents that listening can be to over-the-air radio, Internet and/or satellite radio. The proposed instructions would also refer to Internet and satellite radio in one of the items in the diary completion checklist. Arbitron will also include an Internet and satellite reference in the illustrated diary example.
Acquisitions/transactions
Synovate has acquired Plus REMARK, an independent full-service research company in Turkey. Plus REMARK is located in Istanbul and employs 76 staff.
Port Washington, N.Y., research firm the NPD Group has agreed to purchase select assets related to New York-based ACNielsen’s information technology tracking business in Canada. NPD will offer both retail and commercial sales tracking of computers and related peripherals in Canada, as it does in the U.S.
Separately, ACNielsen has become the full owner of ACNielsen Chile, purchasing the 49 percent stake held by Cadem, its business partner in Chile since 1993.
Paris researcher Ipsos has acquired Understanding UnLtd (UU), a U.S. research company specializing in qualitative research. Based in Cincinnati, UU employs approximately 40 people and is managed by its founders Marilyn O’Brien and Denise Patton, who will keep their positions in the newly formed Ipsos Understanding UnLtd.
Alliances/strategic partnerships
Sawtooth Software, Sequim, Wash., has established a strategic alliance with Seattle research firm Global Market Insite, Inc. (GMI). GMI will act as a sales and technical support representative for Sawtooth Software in Asia-Pacific and Latin America. Netherlands-based SKIM Software Division will continue as a sales representative in the European region. Sawtooth Software customers will be able to purchase, at a preferred group discount of 15 percent, sample and e-mail invitation services (for their SSI Web surveys) through GMI’s panel.
Vancouver, B.C., research firm Vision Critical and Dallas-based Common Knowledge Research Services have formed a strategic partnership which provides clients access to Common Knowledge Research Services Your2Cents online opinion panel and Vision Critical’s panel management system, Panel+.
Faith Popcorn’s New York marketing consultancy BrainReserve and PR firm Weber Shandwick have formed a strategic alliance. The new alliance, designed to fuse BrainReserve’s “Applied Futurism” with communications, will offer clients an integrated approach to identifying the next culturally relevant trends and developing a strategy to communicate the vision. The new alliance will be led by Billee Howard and Jennifer Risi, the co-leaders of Weber Shandwick’s global strategic media group, and Todd A. Myers, BrainReserve alliance chief.
Association/organization news
San Francisco research software company CfMC has been awarded the first Celebrated Company Award for outstanding volunteer efforts and support by the Marketing Research Association.
The Council for Marketing and Opinion Research (CMOR) joined with other Census advocates in celebrating their victory in convincing a House and Senate conference committee to approve $812.237 million in federal spending for the U.S. Census Bureau in fiscal year 2006, rejecting a much lower funding level adopted by the U.S. Senate in September 2005. The victory is further emphasized by passage of the House bill that included the Census funding at this agreed-upon amount by the full House of Representatives with a vote of 397-19.
“The U.S. Census Bureau provides crucial data, records, and other information to a wide array of research-related interests,” says CMOR Director of Operations Donna Gillin. “Beyond the marketing and opinion research profession, the data from the Census is critical to local, state and federal government, diverse commercial interests, academia, and many non-profit organizations.”
CMOR, the American Association for Public Opinion Research (AAPOR), and other organizations feared that budget cuts would severely hamper the Bureau’s capacity to collect and report information.
Howard Gershowitz, CMOR’s board of directors co-chair, credits the successful effort to a three-prong strategy. “We were proactive in lobbying the offices of all 26 conferees,” he says. “We launched a member letter-writing campaign and we had strong alliances with other groups for whom a fully funded U.S. Census is critical.”
CMOR has long supported the Census and its impact on the marketing and opinion research profession and was an official partner of the Census Bureau during the 2000 Census to actively educate respondents and encourage participation. During this recent effort, CMOR worked in conjunction with AAPOR, other industry associations, as well as other stakeholders who formed the U.S. Census Project.
In addition to taking a census of the population every 10 years, the Census Bureau conducts censuses of economic activity and state and local governments every five years. The next census of the population is planned for 2010, but every year the Census Bureau conducts more than 100 other surveys. The fiscal year 2006 funding would have an impact on all of these activities.
Don Marek has been named executive director of the Marketing Research Institute International (MRII). The MRII was formed by the MRA and the University of Georgia as a not-for-profit educational institute in 1996. Its purpose is to create and deliver comprehensive professional education and training in marketing research.
Awards/rankings
Opinion Research Corporation (ORC), Princeton, N.J., announced that the National Alcohol and Drug Addiction Recovery Month Web site, which is developed and maintained by ORC, recently won a Gold Award in the MarCom Creative Awards 2005 competition, an honor that recognizes excellence in marketing and communications.
Findlay, Ohio-based mystery shopping firm Corporate Research International was ranked No. 396 on the annual Inc. 500 list of the fastest-growing private companies in the country, with three-year sales growth of 346.1 percent. The company employs 104 people.
Harris Interactive, Rochester, N.Y., was named a winner in the Service category of the IDG InfoWorld 100 awards for 2005. The awards honor IT projects that demonstrate the most creative use of technologies to further business goals. Harris Interactive won for its Web/telecom integration project or ICW as it is known at Harris Interactive. ICW integrates telephone agent-based data collection and Web-based data collection - providing centralized control over voice interviewers, telephone and online sample - and combines market research data into a single, real-time reportable data store. Nominations for the award were submitted by InfoWorld readers, technology partners and end-user companies in late summer 2005.
New accounts/projects
Fort Lauderdale, Fla., research firm Simmons has signed a multi-year, multimillion-dollar agreement to provide the Interpublic Group of Companies (IPG) with new and renewed Simmons products. The contract will provide IPG, an organization of advertising agencies and marketing-services companies, with new and expanded access to Simmons Market Research consumer data.
ACNielsen U.S., Schaumburg, Ill., has a new and expanded agreement with Winn-Dixie under which the grocer will utilize ACNielsen as its preferred provider of syndicated sales information and consumer insights. An on-site ACNielsen team will lead Winn-Dixie’s category management initiatives from a syndicated data perspective.
New companies/new divisions/ relocations/expansions
Research software and services firm the Analytical Group Inc. recently moved to a new office building in Scottsdale, Ariz., increasing the phone center to 72 WinQuery interviewing stations.
London-based Research Now plc has opened a New York sales office and named Scott Toro and Alex Sunnerstam client service/sales director. Heading up the new U.S. team will be Research Now Managing Director Andrew Cooper, who will remain based in London. Sadia Perveen, Research Now’s client service manager will move from London to the New York office.
Millward Brown has launched its global brand consulting practice in Asia Pacific. The practice, Millward Brown Optimor, will be headed by Yixin Zhang, who has been appointed director. She will be based in Beijing.
GfK Healthcare has expanded into Asia by opening a health care division in Thailand. The Thailand health care division, known as GfK Healthcare, will be headed by Alan John.
Company earnings reports
In results for the quarter ended September 30, 2005, SPSS Inc., Chicago, reported its fourth consecutive quarter of record revenues, with third-quarter 2005 net revenues of $58.3 million, compared to $53.5 million in the third quarter of 2004, and earnings per diluted share (EPS) of $0.22, compared with $0.05 in the same period last year. Net earnings for third-quarter 2005 included a $1.0 million, or $0.05 per diluted share, non-cash income tax charge largely representing a reassessment of the global deferred income tax accounts.
New license revenues increased 22 percent to $27.4 million from the third quarter of 2004. This increase was driven by double-digit growth in both the company’s tools and applications offerings. Operating income in the 2005 third quarter was $8.2 million, or 14 percent of total revenues, compared to $1.2 million, or 2 percent of total revenues, in the same quarter last year.
For the nine months ended September 30, 2005, net revenues totaled $173.8 million, with EPS of $0.55, compared with $163.6 million and $0.11, respectively, for the same period last year. New license revenues increased 14 percent to $77.8 million for the first nine months of 2005. Operating income totaled $19.4 million for the first nine months of 2005, or 11 percent of total revenues, up from $2.9 million, or 2 percent of total revenues, for the same period in 2004. Operating expenses declined by 4 percent from the prior year.
Cash totaled $59.1 million, as of September 30, 2005, up from $37.1 million as of December 31, 2004. Net cash flow from operating activities was $34.1 million for the nine months ended September 30, 2005, compared with $8.5 million for the same period last year.
New York-based NetRatings, Inc. reported third-quarter revenues of $16.8 million, an 8 percent increase over revenues of $15.6 million in the third quarter of 2004. Net loss for the third quarter of 2005 was ($3.7 million), or ($0.10) per share, on approximately 36.2 million shares. This compares with a net loss of ($4.3 million), or ($0.12) per share, in the third quarter of 2004, on approximately 34.8 million shares.
During the quarter, the company recorded a restructuring charge of $1.7 million. The charge negatively affected net earnings by $0.05 per share and was related to severance expenses associated with a restructuring in NetRatings’ European business.
On a pro forma EBITDA basis, the company reported a third-quarter loss of ($488,000), or ($0.01) per share. This compares with a pro forma EBITDA loss in the third quarter of 2004 of ($1.2 million), or ($0.04) per share.
National Research Corporation, Lincoln, Neb., reported third-quarter revenues of $10.1 million compared with revenues of $9.3 million for the same period in 2004. Net income for the quarter ended September 30, 2005 was $2 million, or $0.29 per basic and diluted share, compared with net income of $1.7 million, or $0.24 per basic and diluted share, in the prior year period. Revenues for the nine months ended September 30, 2005 were $23.9 million compared with revenues of $23.3 million for the same nine-month period of 2004. Net income for the nine months ended September 30, 2005 was $3.7 million, or $0.52 per basic and diluted share, compared with $3.6 million, or $0.50 per basic and diluted share, in the prior-year period.
At Harris Interactive, Rochester, N.Y., revenue for the first fiscal quarter of 2006 was $48.9 million, up 24 percent when compared with $39.3 million of revenue from the same period a year ago. U.S. revenue was $37.1 million, up 26 percent from the $29.6 million of revenue reported for the same period a year ago. European revenue was $11.8 million, up 21 percent from the $9.8 million of revenue reported for the same period a year ago. Favorable foreign currency exchange rates added $0.2 million to revenue for the first fiscal quarter of 2006.
Global Internet revenue for the first fiscal quarter of 2006 was $28.0 million, up 16 percent from Internet revenue of $24.2 million for the same period a year ago. U.S. first fiscal quarter 2006 Internet revenue was $24.8 million, up 14 percent when compared to the $21.7 million from the same period a year ago. European Internet revenue for the first fiscal quarter of 2006 was $3.2 million, up 29 percent from the $2.5 million of Internet revenue reported for the same period a year ago. Internet revenue comprised 57 percent of total revenue, 67 percent of the U.S. revenue and 27 percent of the European revenue.
Operating income for the first fiscal quarter of 2006, which included $0.7 million of non-cash stock-based compensation expense, was $2 million, or 4.1 percent of revenue, down 25 percent when compared to operating income of $2.7 million (which included no stock-based compensation expense), or 6.9 percent of revenue for the same period a year ago.
Net income for the first fiscal quarter of 2006 was $1.2 million, or $0.02 per diluted share, compared with net income of $1.7 million, or $0.03 per diluted share for the same period a year ago. Results for the first fiscal quarter of 2005 include WirthlinWorldwide from the date of acquisition, September 8, 2004.
Paris-based Ipsos posted revenues of EUR 168.9 million for the third quarter of 2005, an increase of 19.1 percent on the same period in 2004. Over the first nine months of 2005, revenues were EUR 490.7 million, a 14.7 percent improvement on the first nine months of 2004.
With sales up 28.8 percent from EUR 487.1 million to EUR 627.5 million, Germany-based GfK Group posted good results for the first nine months of the current year. The firm also increased EBIT after income from participations by 84.6 percent from EUR 58.3 million to EUR 107.6 million. This figure does not take into account non-recurring costs of EUR 5.9 million attributable to the integration of NOP World.
The above-average rise in EBIT after income from participations is essentially due to four factors: strong growth in the core business, the business performance of the NOP World subsidiaries, positive currency effects and the sale of GfK’s 50 percent stake in IHA-IMS Health, Switzerland. This sale was reported by GfK at the beginning of the year. At 17.1 percent, the margin, i.e., EBIT after income from participations in relation to sales, was also higher than in the same period for the previous year. Consolidated total income after minority interests rose from EUR 34.6 million to EUR 62.3 million.
Greenfield Online, Wilton, Conn., reported that net revenues totaled $23.1 million for the third quarter of 2005 as compared with $12.0 million for the same period a year ago and $26.3 million in the second quarter of 2005. Revenue from Ciao, the company’s European subsidiary, totaled $8.1 million, including $2.7 million in revenue from the Ciao comparison-shopping business. The decline in revenue was primarily due to a 17 percent sequential quarterly revenue decline in North America. Ciao revenues were flat as compared to the second quarter.
Gross profit totaled $16.4 million or 71 percent of revenues for the third quarter of 2005, as compared with $9.5 million or 79 percent of revenues in the prior year period, and 73 percent of revenue in the second quarter of 2005.
Operating income was $0.8 million, or 4 percent of revenue for the third quarter of 2005, including a one-time charge of $1 million related to the management changes the company announced on September 29, 2005. Excluding this charge, operating income was $1.9 million or 8 percent of revenue. This compares to operating income of $2.3 million or 19 percent of revenue for the prior year period, and is down sequentially from $4.5 million or 17 percent of revenue in the second quarter.
For the third quarter 2005, adjusted EBITDA was $3.5 million or 15 percent of revenues, including the one-time charge, as compared to $3 million or 25 percent of revenue for the prior year period. Excluding the one-time charge, third quarter 2005 adjusted EBITDA was $4.6 million, or 20 percent of revenue.
Net income was $1.6 million including the one-time charge, as compared with $1.2 million for the prior year period. Net income for the third quarter 2005, excluding the one-time charge, was $2.6 million. Cash flow from operations was $7.2 million for the third quarter as compared to $1.9 million for the prior year period and $6.7 million in the second quarter.
FIND/SVP, Inc., New York, reported revenues in the third quarter were $11,433,000, an increase of 15 percent versus revenues of $9,915,000 in the prior year. Net income attributable to common shareholders for the third quarter was $435,000, or $.02 per basic and fully diluted share, a 47 percent increase over income of $296,000, or $0.02 and $0.01 per basic and fully diluted share, respectively, in the third quarter of the prior year.
EBITDA for the quarter was $1,083,000, a 26 percent increase over EBITDA of $859,000 in the prior year, and a 25 percent increase over adjusted EBITDA of $867,000 reported in the second quarter of 2005. Operating income for the third quarter increased 28 percent to $800,000 compared to $623,000 in the prior year.
The EBITDA, operating income and net income attributable to common shareholders results include stock compensation expense of $141,000, $126,000 and $204,000 for the third quarter of 2005, the third quarter of 2004, and the second quarter of 2005, respectively.
For the nine months ended September 30, 2005, revenues were $31,548,000, an increase of 8 percent versus revenues of $29,232,000 one year earlier. Net loss attributable to common shareholders for the nine months was ($101,000), or ($0.01) per share, a 93 percent improvement over a loss of ($1,378,000), or ($0.08) per share, in the same period of the prior year.