News notes
In mid-January, Netherlands-based VNU said it had received a non-binding proposal to purchase the company for EUR 28 to 28.50 per common share from a private equity consortium consisting of AlpInvest Partners, the Blackstone Group, the Carlyle Group, Hellman and Friedman, Kohlberg Kravis Roberts and Co., Permira and Thomas H. Lee Partners. This proposal was made by the private equity consortium after several weeks of diligence and access to VNU management. VNU said it will proceed with discussions with this private equity consortium as VNU continues to weigh alternatives and evaluate what course of action will serve the best interests of its stakeholders.
Acquisitions/transactions
Opinion Research Corporation, Princeton, N.J., has sold its teleservices segment and closed certain non-strategic market research operations. Effective December 31, 2005 the teleservices segment was sold to a management group in exchange for the assumption of all liabilities and the potential for future payments from the buyer. In addition, the company expects that the transaction will generate a material cash tax benefit. A company press release stated: “Although the historic profitability of this business unit met our expectations and exceeded that of its industry, the recent decline in revenues and the resulting losses have made such a sale a desirable transaction.” In addition, the firm announced the closure of market research operations in South Korea and Mexico and one of its domestic call centers.
New York researchers BuzzMetrics and Intelliseek announced an agreement in principle under which BuzzMetrics will acquire Intelliseek. The firms’ technologies mine publicly archived online sources including blogs and discussion forums. Upon closing of the acquisition, the combined company, BuzzMetrics, Inc., will operate under the Nielsen BuzzMetrics brand and be headquartered in New York. Nielsen parent VNU will become a majority shareholder in the new BuzzMetrics with 50.1 percent ownership.
Boston research firm Chadwick Martin Bailey (CMB) has acquired Sage Research, a Framingham, Mass., research and consulting firm serving technology product and service providers. Sage Research will be integrated into CMB as a new technology group.
Germany-based research firm GfK now has a 51 percent stake in the market research company Merc in Mexico and an 80 percent stake in the market research company KleimanSygnos in Argentina. Marcelo de Fuentes, who owns 49 percent of Merc, will continue in his capacity as managing director of Merc. Mónica Kleiman and Norah Schmeichel, who both have a minority shareholding in KleimanSygnos, will continue to act as joint managing directors of KleimanSygnos.
Montreal research firm Leger Marketing has acquired Claros Research Corporation in Calgary. With the acquisition, Marc Tremblay has been named vice president Calgary of Leger Marketing.
Research International has acquired Pentor, an independent Polish market research agency which has been affiliated to Research International since 1991. Pentor is headquartered in Warsaw, with offices in Katowice, Wroclaw and Poznan, and employs 107 people.
Alliances/strategic partnerships
Arbitron Inc., New York, announced that three Houston advertising agencies - FogartyKleinMonroe, Love Advertising and Mediagraphix Media Services - have signed a commitment to use radio audience estimates based on the Portable People Meter when Arbitron deploys its audience measurement service.
Association/organization news
In a press release outlining trends affecting the research industry in 2006, Larry Brownell, executive director of the Marketing Research Association (MRA) cited technology and globalization as two of the main driving forces, along with the growth of relatively inexpensive online survey research methods. “Online research is surging, and within the next few years is likely to become the most common form of all marketing research fieldwork conducted,” said Brownell. Problems arise when amateurs hop on the online research bandwagon without the expertise that a professional researcher provides. “A lot of flawed research is being conducted online, and the sample accuracy of online panels is raising questions in the industry,” Brownell said. “It’s critically important that a bona fide marketing research professional shapes surveys and ensures the correct use of the appropriate tools and techniques.”
Although some industry watchers believe new technologies may cause a decline in the role of focus groups, traditional focus groups have been yielding critical guiding insights for many companies for decades, the MRA release stated. Even as online technology expands, industry statistics indicate that the use of focus groups is on the rise, with money spent on focus groups up 6 percent.
While online research gives users the advantage of reaching a much larger quantity of consumers, focus groups provide the kind of accuracy and depth that can emerge from probing, controlled, face-to-face interaction, the MRA said. The goal of the research should dictate which of these and many other research tools is utilized. Often a combination of methodologies is recommended.
Marketing research initiatives have become global in scope, fueling more alliances and/or acquisitions, not only among marketing research vendors, but among research trade organizations as well. Outsourcing, both within the U.S. and overseas, will continue to be seen as a source of potential cost savings, but, once again, “quality counts.” The MR industry will need to ensure that the outsourced survey researchers are up to the task and reflect positively on MR. In the technology industry, for example, outsourced customer service has negatively affected customer relations in some cases when service providers have significant cultural and language differences from their customers.
Today’s research professionals play a critical role in the business decision-making value chain, the MRA said. Increasingly quoted in the media, this new breed of well-qualified, experienced researcher can confidently act as a marketing consultant who captures consumer information, analyzes it and provides clients with practical insights to guide decisions based on empirical market data.
In a separate release, Brownell said the MRA’s year-old Professional Researcher Certification (PRC) program has exceeded all expectations in terms of number of applicants and interest-level. “We’ve passed the number of applicants we had set as a goal for the first year and we’ve just re-configured our goals for year two to be double our original projections based on our experience,” he said. “Having a credential for marketing research professionals has been a long time in coming. The overwhelming response is a credit to our profession from which we will all benefit.”
The PRC program offers an open application period until February 2007 for those who are currently marketing research practitioners and meet a set of criteria. During this period, candidates are grandfathered in based on their experience, education and ethics, with the application materials providing a full representation of the candidate’s expertise. No exam is necessary during this phase, but all of those certified must continue their professional development through education. The PRC examination is currently in development, led by a special MRA committee researchers. The first exam is set to be administered in February 2007.
The Marketing Research Institute International (MRII), which will celebrate its 10th anniversary in June 2006, has announced its 2006 board of directors. Officers: president - Susan Adelman, Survey Service, Inc.; president-elect - John Kelly, Marketing Direction (Great Britain); secretary/treasurer - Ron Kornokovich, OPINIONation; past president - Terry Grapentine, Grapentine Company, Inc. Directors: David Ashley, Department of Homeland Security; Pam Bracken, University of Georgia; Branimir Brankov, Merck & Co., Inc.; Larry Brownell, Marketing Research Association; Judith Brynildson, Concentrics Research; Robert Cohen, Scarborough Research; Patrick Crane, Eastman Kodak Company; Charles (Chuck) Dodson, A.M. Todd Co.; William Douglas, Coca-Cola Company; Denis Evangelista, IBM; J. Patrick Galloway, Galloway Research Service, Inc.; Joel Goodman, Carter’s Inc.; Jon Last, The Golf Digest Companies; Robert Leiter, University of Georgia; Srinivas Reddy, University of Georgia (MMR Program); Diane Streckfuss, ARF; Mary Wang, SPSS; Julie Williams, Maritz Marketing Research Inc.; Brenden Wycks, Marketing Research and Intelligence Association (Canada). MRII is a non-profit organization devoted to fulfilling the educational needs of marketing researchers.
Awards/rankings
Mexico-based marketing magazine Merca2.0 named ACNielsen Mexico as 2005’s best marketing research agency.
New accounts/projects
New York-based Nielsen Media Research and Comcast Spotlight, the advertising sales division of Comcast Cable, announced a six-year agreement that consolidates into one single contract all of Comcast’s Local People Meter (LPM) services in each of the 10 major television markets where Nielsen provides LPM audience ratings. The agreement covers the local markets in which Nielsen already operates LPM services - New York, Los Angeles, Chicago, Boston, San Francisco, Philadelphia, Washington, D.C., Detroit and Dallas - plus Atlanta, where Nielsen will roll out LPMs later this year.
Lightspeed Research, Basking Ridge, N.J., has renewed its licensing of the Confirmit software from Norway-based research software provider FIRM. Separately, FIRM announced that ACNielsen has also renewed its licensing of Confirmit.
Aruba Cruise Tourism (ACT), a non-profit organization of the government of Aruba, selected Diatouch, Inc., a Phoenix, Ariz., software firm, to provide survey and information kiosks in its cruise terminals. In its new “Welcome Back” campaign, ACT is striving to convert cruise passengers into land-based vacationers. Using proximity sensor technology, the kiosks welcome disembarking cruise passengers with Caribbean steel band music and a friendly voice inviting them to retrieve information on Aruba from the kiosks. The kiosks include Diatouch’s Digivey Survey Suite to gather comments from cruise passengers about their Aruba experience. The survey tool offers six languages to select from and also provides a sign-up form to participate in a drawing for a free stay in Aruba.
St. Paul-based Minnesota Public Radio (MPR) used the services of Seattle research firm QuestionPro to create a conjoint-based online survey, dubbed Medical Matchmaker, which walks listeners who visit the MPR Web site through 12 pairs of hypothetical health care plans, each with a different mix of features. Listeners choose the one they prefer from each pair. The software then compares the chosen plans against those that weren’t chosen. At the end, it shows which features the respondent really cares about (cost, choice of provider, etc.) and which general type of health insurance plan best fits their priorities. MPR news staff will use information provided by those who use Medical Matchmaker to help design future news coverage on health care. The online survey is available at www.mpr.org/medicalmatchmaker.
Arbitron Inc., New York, announced that media firms the Interpublic Group, WPP and Carat Americas have signed contracts to use Arbitron’s Portable People Meter-based radio audience estimates.
Separately, Arbitron Inc. and VNU announced that Unilever United States has signed a subscription agreement to the pilot panel of Project Apollo, the single-source, national research service based on Arbitron’s Portable People Meter system and ACNielsen’s HomeScan technology. Unilever is one of six advertisers and who, along with their advertising agencies, are members of the Project Apollo Steering Committee, a group of marketers who have signed or are in the process of signing agreements for the Project Apollo pilot panel data.
Republic Beverage Company has renewed its business relationship Chicago-based research firm Information Resources, Inc. Under the multi-year contract, IRI will continue to provide services to Republic Beverage in Arizona and Louisiana and will expand services to include operations in Texas. Republic Beverage is the fourth largest distributor of premium wine and spirits in the U.S.
New companies/new divisions/relocations/expansions
Research firm TNS has announced organizational changes to its U.S. custom research division. It has: consolidated its IT, telecom and media and entertainment units into one broad technology sector; established a new “Client Solutions” group to address strategic business issues and create new research solutions and technologies, and; created an expanded multi-country project team within TNS Operations to support global clients’ multinational research.
Former McCann Erickson executive Alison Gilbertson has opened a new research firm, Unravel Research and Planning, in the U.K. The firm’s Web site is www.unravelresearch.co.uk.
Australia-based Pulse Group, a research process outsourcing firm, has opened an office in Amsterdam to enhance client servicing and support for its European clients.
Ed Keller, former CEO of Roper ASW, and Brad Fay, former managing director, have formed the Keller Fay Group, a research consultancy dedicated to word-of-mouth marketing campaigns. The firm’s Web site is www.kellerfay.com.
Company earnings reports
For the fourth quarter 2005, ended December 31, New York-based Arbitron Inc., reported revenue of $75.3 million, an increase of 3.3 percent over revenue of $72.9 million during the fourth quarter of 2004. Costs and expenses for the fourth quarter increased by 2.7 percent, from $62.1 million in 2004 to $63.8 million in 2005. Earnings before interest and income tax expense (EBIT) for the quarter were $17 million, an increase of 0.4 percent compared with EBIT of $16.9 million for the fourth quarter of 2004. Interest expense for the quarter declined 43.9 percent, from $1.7 million in 2004 to $0.9 million in 2005, due to reductions in the company’s long-term debt.
Net income for the quarter was $11.2 million, compared with $9.6 million for the fourth quarter of 2004, an increase of 16.2 percent. Net income per share for the fourth quarter 2005 increased to $0.36 (diluted), compared with $0.31 (diluted) during the comparable period last year.
For the year ended December 31, 2005, revenue was $310 million, an increase of 4.5 percent over revenue of $296.6 million for 2004.
A planned increase in expenses for the Houston Portable People Meter market demonstration and for the rollout of the Project Apollo pilot contributed to an increase in costs and expenses for the year of 5.2 percent, from $205.7 million in 2004 to $216.3 million in 2005.
EBIT for 2005 increased 3 percent to $101.4 million compared with $98.4 million in 2004. Income tax expense for 2005 was $33.2 million, an increase of 7 percent over $31.1 million in 2004. Net income for 2005 increased 11.1 percent to $67.3 million compared with $60.6 million in 2004. Net income in 2005 was $2.14 per share (diluted), compared with $1.92 per share (diluted) last year. In 2005 and 2004, the company recognized a tax benefit relating primarily to the reversal of certain liabilities for tax contingencies related to prior periods in the amounts of $4.7 million and $4.2 million, respectively.
Knowledge Networks, Menlo Park, Calif., announced it has surpassed previous records for quarterly and annual revenue, posting over $9 million in fourth quarter (2005) revenue and $32 million for the year overall, a significant increase over 2004.