News notes
Ciao, the European data collection subsidiary of Greenfield Online Inc., has completed a reorganization of its client service department. The reorganization, which started in the summer of 2005, has resulted in a 30 percent increase in operations headcount, including expanded project management, survey scripting, data processing, translations and quality assurance teams. Operations will be centered in Munich and Timisoara, Romania, with project managers also located in London, Paris and Amsterdam.
New York research firm FIND/SVP, Inc. has changed its name to Guideline.
Symmetrics, the loyalty practice of research firm Synovate, has been rebranded as Synovate Loyalty.
In response to the growth potential of the emerging markets outside of Central Europe and North America, London-based TNS has aligned its business across the Middle East, Africa and Latin America with the high-growth markets of Asia-Pacific. The new region, which makes up the rest of the world, will use the acronym ALM for Asia-Pacific, Latin America, the Middle East and Africa and includes the three economies of China, India and Brazil. TNS CEO David Lowden has placed control of the greater ALM region with the current Asia-Pacific regional management board led by James Hall.
New York-based Return Path, Inc., has changed the name of its market research solutions division, Survey Direct, to Authentic Response.
In early March, Netherlands-based VNU N.V. and Valcon Acquisition B.V., a holding company newly incorporated in the Netherlands, announced that they have agreed to a public offer for VNU that values the company’s equity at EUR 7.5 billion, or EUR 28.75 per common share. The expectation that VNU would reach an agreement on the intended public offer for all of the company’s issued common shares and 7 percent preferred shares was realized after a meeting of the company’s supervisory board. Following the meeting, VNU and Valcon entered into a merger protocol for the purchase of the company. Valcon is controlled by a private-equity group consisting of affiliated funds of AlpInvest Partners N.V., the Blackstone Group L.P., the Carlyle Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. L.P. and Thomas H. Lee Partners, L.P.
The supervisory and executive boards of VNU unanimously support the offer and concluded that it is in the best interests of shareholders and all other stakeholders of VNU. The offer will be an all-cash offer for all of the issued and outstanding common shares and all of the issued and outstanding 7 percent preferred shares of VNU N.V. Based on the offer price of EUR 28.75 per common share, the value of the offer for the common shares is approximately EUR 7.5 billion. Based on the offer price of EUR 13.00 per 7 percent preferred share, the value of the offer for the 7 percent preferred shares is approximately EUR 2 million. Launch of the offer is subject to completion of preparations and customary conditions. Rob van den Bergh, chief executive officer of VNU, had previously announced that he would step down as chief executive officer. This is now anticipated to happen upon the closing of the transaction.
Separately, on March 1 VNU announced that its Nielsen Media Research will pursue multiple options to measure television and, as a consequence, will decline to enter into a joint venture with Arbitron Inc. to commercially deploy its Portable People Meter (PPM) as the primary measurement tool for media ratings. This decision will have no impact on Nielsen’s plan to proceed with Arbitron for Project Apollo, the market research joint venture among VNU’s Nielsen Media Research and ACNielsen units and Arbitron in which the three businesses will collaborate on a national marketing research service which would collect multimedia and purchase information from a common sample of consumers.
Nielsen, in a separate press release, said it will communicate within 90 days a detailed plan for expanding electronic measurement across all television platforms. Taking advantage of recent advances in engineering, software and metering technology, Nielsen will pursue a portfolio strategy that will meet the needs and financial abilities of the television markets it serves. Nielsen said that the quality threshold required for market research is very different from the thresholds demanded of a television “currency” service, and that it believes the PPM offers potential for market research applications.
Acquisitions/transactions
Boulder, Colo.-based Market Force Information Inc., has acquired Shop’n Chek Inc., an Atlanta mystery shopping firm.
Milwaukee marketing research company Market Probe Inc. has acquired Maywood, N.J.-based pharmaceutical marketing research firm Rowin Group Inc. Terms were not disclosed. Market Probe will operate Rowin from its current location with its existing staff.
Alliances/strategic partnerships
Synovate has signed a licensing agreement to market U.S.-based KDPaine & Partners’ public relations measurement software, known as DIY Dashboard, throughout Asia.
Chicago researcher Technomic, Inc. will collaborate with Seattle research firm the Hartman Group to develop business-building tools for food-service organizations and their suppliers.
Norway-based research software maker FIRM and the NPD Group, Port Washington, N.Y., will develop a new panel management and sample selection platform.
Association/organization news
G & S Research is among the newest affiliate members of the Pharmaceutical Business Intelligence and Research Group (PBIRG). PBIRG is a not-for-profit industry association dedicated to the advancement of global health care marketing research, business intelligence and strategic planning in theory and practice. To qualify for membership, applicants must demonstrate accomplishment in the field of pharmaceutical market research on the global level. Applicants must also be approved by at least two-thirds of elected officers.
The Council for Marketing and Opinion Research (CMOR) has named Michael Mermelstein of Evans McDonough Company, Inc. as the new co-chair of the organization’s government affairs committee. CMOR has also named Patrick Glaser as its new director of respondent cooperation.
Awards/rankings
Harris Interactive, Rochester, N.Y., and UBS have been awarded the John and Mary Goodyear Award for best international research paper by an ESOMAR international jury. Titled “Building the Corporate Brand - Beyond Individual Loyalties,” the paper elaborates on the values-based research approach designed by Harris Interactive that assists organizations such as UBS with the development of their global corporate brand positioning. Patricia Kidd, vice president of the Harris-Wirthlin Brand and Strategy Consulting Practice at Harris Interactive, and Oliver Loch, UBS global head of brand research, co-authored the paper, which was submitted in 2005. ESOMAR will publish the award-winning paper and the nominee papers in the ESOMAR Yearbook titled “Excellence in International Research 2006.” The paper can also be purchased on ESOMAR’s Web site at www.esomar.org/web/show/id=43300/pubid= 1029.
In a ranking by the International Association of Outsourcing Professionals, India-based research outsourcing firm Cross-Tab Marketing Services was ranked as one of the top 100 outsourcing companies in the world. The list of the Global Outsourcing 100 was published in a special advertising feature in the April 3 issue of Fortune magazine.
Golden, Colo.-based ingather research was selected from a group of local business finalists to receive the 2006 CEBA Ethics in Business Award. This award is sponsored by the Colorado Ethics in Business Alliance. Christine Farber-Cook, president of ingather research, accepted the award.
A paper co-authored last year by two Ipsos researchers examining the benefits of uniting brand and customer relationship management was cited as one of the top 50 articles by Emerald Management Reviews of Emerald Group Publishing, Ltd., a publisher of academic and professional literature in the fields of management and library and information services. The paper, “The Brand-Customer Connection,” originally appeared in the July/August 2005 issue of the American Marketing Association’s Marketing Management journal and can be found at www.ipsosloyalty.com/knowledgecenter/whitepaper.cfm. The paper, by authors Timothy L. Keiningham, Lerzan Aksoy, Tiffany Perkins-Munn and Terry G. Vavra, received the Citation of Excellence, the highest accolade that Emerald Management Reviews awards to authors. Another paper from Keiningham, entitled, “Does Customer Satisfaction Lead to Profitability? The Mediating Role of Share of Wallet,” was selected as a finalist for best paper by the International Journal of Managing Service Quality. This paper was co-authored with Perkins-Munn, Aksoy, and Demitry Estrin. It, too, can be found at www.ipsosloyalty.com/knowledgecenter/whitepaper.cfm.
New accounts/projects
Greenfield Online Inc., Wilton, Conn., reported that two marketing research clients - Guideline Inc. (formerly Find/SVP Inc.) and Hall & Partners L.L.C. - renewed their client/partnership agreements for the company’s survey sample and programming solutions.
San Diego-based marketing and information firm Claritas Inc. has signed a multi-year agreement with OfficeMax to provide a national business-to-business marketing database in support of OfficeMax’s acquisition and customer intelligence initiatives.
A consortium led by the Gallup Organization has been selected by the European Commission (EC) to manage polls for the next four years. The commission selected Gallup to lead the consortium running the EC’s Flash Eurobarometer opinion polls. As traditional telephone sampling continues to decline, Gallup will lead Flash Eurobarometer with a mixture of mobile and traditional telephone interviewing, combined with face-to-face interviewing, to provide complete coverage. A total of 34 countries will be involved, including EU member states, candidate countries and other European nations. Gallup’s Hungary office will coordinate the survey work using centrally-controlled remote interviewers located in countries covered by the surveys and linked through secure Internet connections. The survey software will be webCATI, from San Francisco research software company CfMC.
Research firm TNS announced a five-year contract with the Kazakhstan television Joint Industry Committee (JIC) to provide trading currency television audience measurement using the Arbitron Portable People Meter (PPM) system. Installation of the PPM panel will begin in Almaty and the surrounding regions, with a rollout to other areas of Kazakhstan planned for January 2007. The move to the PPM system from the current diary-based television audience measurement service will signify an increase in the number of households covered across Kazakhstan, from 600 to 715, making a panel of 2,000 individuals. It will also mean an increase in the number of urban centers covered, from seven to 13.
Los Angeles research firm PhaseOne is completing a brand communications audit for Blue Shield of California. The audit includes more than 200 pieces of communication aimed at four distinct audiences: consumer/member, producer/agent, employer and internal. The objective of the audit is to understand where the Blue Shield brand stands in terms of current communications, what personality and attributes have been conveyed, the likely brand impression that has been communicated and to identify the gap between where the communication is and where the client wanted it to be. In addition, PhaseOne has worked with the brand team to develop messaging guidelines, designed to help them bridge the gap when creating new communications.
OMD and PHD, two media services agencies, have signed a contract for the use of New York-based Arbitron Inc. ’s Portable People Meter (PPM)-based radio audience estimates. The agreement covers the U.S.-based radio planning and buying activities of OMD and PHD, both part of the Omnicom Media Group. Arbitron will start the rollout of the PPM system as its radio ratings service in the top 50 markets, beginning with Houston in July 2006.
Separately, Horizon Media has signed a commitment to use radio audience estimates for Houston and Philadelphia based on the PPM when Arbitron deploys it in those markets. In addition, advertising agency J.L. Media has signed an agreement for the PPM ratings service when deployed in the Houston and Philadelphia markets. Fast-food firm Wendy’s has entered into a multi-year agreement for the PPM service when it begins commercial deployment in the U.S. radio marketplace. Spanish Broadcasting System Inc., has entered into a multi-year, multi-market agreement for PPM audience measurement services when deployed in New York, Los Angeles, Chicago, San Francisco and Miami. These five mainland U.S. markets are served by nine Spanish Broadcasting System stations. In addition, 23 broadcasters in the Québec Franco market have chosen to increase the Portable People Meter panel to 800 households.
New companies/new divisions/ relocations/ expansions
London-based TNS has expanded its Asia-Pacific network to include New Caledonia and French Polynesia. The addition of the two new offices in Noumea and Papeete are the result of the extension of an existing relationship between TNS and SARL MBA Consultants. While the two companies’ Asia-Pacific operations did not previously have any formalized relationship, TNS Australia and SARL MBA Consultants have collaborated on projects several times in the years since their European counterparts signed an agreement in 1999 (SARL MBA Consultants was a franchise of Louis Harris, which belongs to TNS).
Seattle research firm Global Market Insite Inc. has opened a new office in Los Angeles, supported by the appointment of Thyra Lees-Smith as sales director for the L.A. area. The Los Angeles office is located at CNN Tower, 6430 Sunset Boulevard, Suite 415, Los Angeles, Calif., 90028. Phone 323-825-2641. Fax 323-960-9162. E-mail info@gmi-mr.com.
Marketing and research firm Hilty Moore & Associates LLC, Chagrin Falls, Ohio, has opened an office at 92 Murphy’s Crossing Dr., Powell, Ohio, 43065. Phone 614-323-3292.
Market research company Synovate has opened a new office in Mexico City and named Evelyn Jabiles as managing director of Synovate in Mexico.
Baltimore Research Inc. has formed a non-partisan public affairs-voter research division and named political analyst and consultant Gerry R. Patnode Jr. as director.
Company earnings reports
Netherlands-based VNU reported 2005 earnings per share of EUR 1.00, exceeding the company’s earlier guidance of EUR 0.85 to EUR 0.90 per share. Reported EPS of EUR 1.00 was driven by better-than-expected business results, along with a positive impact of EUR 0.22 per share related to a lower effective tax rate resulting primarily from the closing of several tax audits and the associated release of provisions for potential tax exposures. Reported 2005 earnings also benefited from a gain on the disposition of businesses (EUR 0.04), a gain associated with the change in pension and post-retirement obligations in the Netherlands (EUR 0.03) and revised provisions associated with discontinued operations (EUR 0.02). The net positive impact of these items, in total, more than offset the negative impact of one-time transaction costs associated with the IMS merger and costs related to the settlement of the IRI antitrust litigation (combined negative impact of EUR - 0.20 per share).
VNU continued to deliver top-line growth, with most businesses performing well, particularly VNU Media Measurement & Information, which grew organic revenues 11 percent. Overall, organic revenue growth was just over 5 percent, at the low end of the previous guidance, due primarily to difficult economic conditions in Europe that affected both ACNielsen and VNU’s trade magazines, particularly its IT titles. Reported revenues, at EUR 3,457 million, were up 4 percent from the prior year.
Organic EBITDA, excluding one-time items, rose 11 percent, surpassing the previous estimate of high single-digit growth. Reported EBITDA of EUR 587 million was up 2 percent, reflecting the negative impact of IMS Health merger costs (EUR -30 million) and IRI settlement costs (EUR -47 million) in 2005, and restructuring provisions (EUR -38 million) and a real estate gain (EUR 14 million) in 2004.
In financial year 2005, Germany-based GfK Group exceeded its guidance for sales and income announced in early 2005. Following the acquisition of NOP World and the extended scope of consolidation as of June 1, 2005, GfK revised its guidance to expected sales of around EUR 900 million and an EBIT margin after income from participations and including highlighted items of at least 12.5 percent. GfK will exceed this guidance by around 4 percent for sales and around 10 percent for EBIT after income from participations including highlighted items. The EBIT margin will stand at 13.7 instead of the expected minimum of 12.5 percent.
For the quarter ended December 31, 2005, Jupitermedia Corporation, New York, reported revenues of $36.1 million compared to revenues of $18.1 million for the same period last year, an increase of 99 percent. Operating income for the fourth quarter of 2005 was $9.0 million compared to operating income of $4.9 million for the same period last year. Income before income taxes for the fourth quarter of 2005 was $6.6 million compared to $5.0 million for the same period last year. The provision for income taxes for the fourth quarter of 2005 increased to $1.4 million from $143,000 for the same period last year. Net income for the fourth quarter of 2005 was $5.4 million, or $0.15 per diluted share, compared to net income of $5.5 million, or $0.16 per diluted share, for the same period last year. Highlights for the year 2005 include: revenues grew 101 percent to $124.6 million; operating income before depreciation and amortization grew 120 percent to $38.1 million; overall gross profit margins were 66 percent; overall operating margins grew to 25 percent; net income was $78.4 million, or $2.15 per diluted share. Net income for 2005 included a gain of $29.1 million, net of income taxes, related to the sale of Jupitermedia’s Search Engine Strategies events and ClickZ.com Network, as well as a $23.5 million benefit from the reversal of a valuation allowance related to deferred income tax assets.
In financial results for the fourth quarter and the year ended December 31, 2005, Opinion Research Corporation, Princeton, N.J., reported revenues for the full year 2005 of $190 million, an increase of 6 percent from $179 million in 2004. Income from continuing operations was $1.6 million, as compared to $1.5 million in 2004. Social research revenues in 2005 were $138 million, increasing 7 percent from $128 million in 2004. Market research revenues totaled $52 million as compared to $51 million in 2004, an increase of 3 percent. Revenues for the last quarter of 2005 were $48.4 million, increasing 6 percent from $45.6 million in the prior year’s fourth quarter. Social research revenues were $33.7 million, an increase of 4 percent, as compared to $32.3 million in last year’s fourth quarter. Market research revenues totaled $14.7 million, increasing 11 percent from $13.3 million in the prior year’s fourth quarter. Income from continuing operations was $1.6 million in 2005 as compared to $1.5 million in 2004. Income from continuing operations in both years was reduced by refinancing related loan fee write-offs and in 2005 by the write-off of the costs of an abandoned equity offering, which together totaled $1.6 million in both years. Income from continuing operations was $266,000 for the fourth quarter as compared to $580,000 in the prior year’s fourth quarter. A principal reason for the lower results in the quarter was the interest on subordinated debt issued in July, 2005, offset in part with interest savings from the 2005 refinancing and debt repayments.
The loss from discontinued operations was $6.2 million in 2005 versus income of $911,000 in 2004. The loss from discontinued operations was $1.6 million in the fourth quarter versus income of $144,000 in the prior year’s fourth quarter. The results in 2005 included a loss from the disposition of the discontinued operations in the fourth quarter and a goodwill impairment charge in the third quarter that impacted income by $1.1 million and $3.6 million respectively. Both of these items relate to the teleservices segment.