News notes
Chicago-based Information Resources, Inc. has retained the investment banking firm of William Blair & Company to assist the company in its exploration of strategic options. "We have been working with William Blair for a few months. We are exploring a variety of strategic alternatives, including the sale of all or parts of the company, joint ventures, restructuring and capital infusions in order to enhance stockholder value and to better serve our customers," said Joe Durrett, chairman and CEO of IRI, in a company press release. "Our plans are to continue serving this industry for the long term."
As part of a new brand strategy, Catalina Marketing Corporation, St. Petersburg, Fla., has brought subsidiaries previously branded as Health Resource Publishing, Market Logic and Alliance Research under the Catalina Marketing brand. Health Resource Publishing becomes Catalina Health Resource, Market Logic becomes Catalina Marketing Direct Marketing Services and Alliance Research becomes Catalina Marketing Research Solutions. The new brand strategy includes a new corporate logo.
Lionville, Pa.-based West Pharmaceutical Services, Inc. has sold its Indianapolis-based consumer health care research business to Concentrics Research, LLC. The consumer health care research business, previously a component of West’s Drug Delivery Systems Division, conducts customized contract research primarily for Phase III, Phase IV, Rx-to-OTC switch and product line extensions. Concentrics Research is a new company formed by the management team of West’s consumer health care research business and Bindley Capital Partners, LLC.
Wilton, Conn.-based Greenfield Online has announced its investment in Confirmit, a Web survey and feedback software product licensed by Future Information Research Management - FIRM. Greenfield Online will integrate Confirmit into its online survey systems.
New York-based Nielsen Media Research announced a rollout schedule for bringing continuous, overnight demographic ratings into the top 10 television markets in the U.S. Nielsen said it would launch electronic People Meter ratings service in Los Angeles, New York, Chicago and San Francisco next year.
People Meter service will be expanded to include Philadelphia, Washington, D.C., Detroit and Dallas-Ft. Worth in 2005, and Atlanta the following year. Nielsen announced support from NBC, ABC, Comcast, Time Warner Cable in N.Y. and Los Angeles, and Adlink in Los Angeles for the local People Meter service.
The Nielsen People Meter will replace the current meter-diary measurement system in the top 10 markets, which include nearly 32 million TV households, or 30 percent of all U.S. television households. More than $8 billion is spent just on loca! television advertising in the top 10 markets.
At the same time, Nielsen Media Research announced it intends to nearly double the size of the National People Meter Sample over the next four years. The National People Meter Sample produces the ratings that are the currency for all broadcast and cable networks and national syndication sales.
Acquisitions
U.K.-based Quæstor Research & Marketing Strategists has been acquired by eq group plc, a U.K. marketing services group.
Beverly Hills, Calif.-based Creative Artists Agency (CAA) has acquired New York- and Los Angeles-based market research firm Youth Intelligence.
Alliances/strategic partnerships
New York-based firms Arbitron Inc. and Nielsen Media Research announced an expansion of their agreement that increases Nielsen’s involvement in a joint research program to evaluate the Arbitron Portable People Meter (PPM). The two companies are exploring the feasibility of using the PPM as a data collection tool for television audience measurement. Arbitron and Nielsen first announced an agreement in June 2000 to test jointly the PPM in Philadelphia.
This latest agreement expands this relationship to include a number of research initiatives that will be supported, in part, by increasing the financial involvement and commitment of resources from Nielsen Media Research.
Statability, an Atlanta Web-based reporting company, and SyncSurvey, an Alpharetta, Ga., research firm, have formed a strategic alliance to give SyncSurvey customers access to Statability’s data packaging abilities.
New York research firms Millward Brown and Dynamic Logic announced a strategic partnership. Millward Brown will use Dynamic Logic’s AdIndex system to enhance its online advertising and brand evaluation research programs. The partnership will also provide Dynamic Logic with access to Millward Brown’s advertising and branding abilities. The firms will work together in North America under a nonexclusive agreement to support the development of industry standards for online advertising and marketing effectiveness metrics. In addition, they will develop new product offerings for measuring the effectiveness of multichannel marketing efforts, using online and offiine media vehicles.
San Mateo, Calif.-based ePocrates, a provider of clinical Information at the point-of-care, and Techneos Systems, a Vancouver, B.C., developer of mobile survey software, are collaborating to offer point-of-experience data collection to the health care market research arena. EPocrates believes that the response rates it observes for its Web-based surveys will hold true for hand-held data collection as it will simplify participation in patient encounter studies and other appropriate point-of-experience surveys.
New York-based NPD Group, Inc., and Parkod Europe, a Paris developer of European selective beauty product classification and instore retail point-of-sale systems, have signed a memorandum of understanding that will lead to a strategic partnership between the companies. NPD and Parkod Europe will deliver retail sales information to selective beauty retailers and manufacturers. France is the first step in the partners’ European rollout of selective beauty POS tracking. Discussions are underway to expand the partnership’s beauty industry market tracking to include Italy, Germany, Spain and the United Kingdom. The service of the joint venture will be modeled after NPD BeautyTrends, NPD’s U.S.-based retail tracking service.
Association/organization news
The European Society for Opinion and Marketing Research (ESOMAR) has become a partner of the United Nations Environment Program (UNEP), whose mission is to provide leadership and encourage partnership in fostering poverty eradication and preventing environmental damage by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.
The focus is on policies and practices that are cleaner and safer, making a more efficient use of natural resources and reducing pollution while incorporating environmental costs and reducing risk. Within its role of improving decision making in business and society worldwide, ESOMAR wants to promote research-based "responsible marketing." The partnership involves stimulating research on consumer attitudes and behavior, providing background information on sustainable consumption by consumerg and corporate buyers. It will bring together professionals from governments, industries and marketing and research. The goals are: to share experience, define issues and develop joint initiatives and follow-up. ESOMAR and UNEP are in the process of developing a detailed action program for 2003-2004.
New accounts/projects
Schaumburg, Ill.-based ACNielsen U.S. announced that it will provide syndicated sales information and consumer insights for The Great Atlantic & Pacific Tea Company, Inc.’s U.S. A&P operations. A&P U.S. operates more than 500 supermarkets in 15 states and the District of Columbia.
British grocer Tesco has commissioned U.K.-based ORC International to develop a customized survey management system that will enable the company’s HR team to design, process and analyze data from various employee research projects in-house. The Internet portal tool will allow Tesco to customize Viewpoint - its annual survey of around 215,000 employees in the U.K. and Ireland - from the creation of questions through to the delivery of individual reports to managers.
Taylor Nelson Sofres has won a contract with Belgian broadcasting companies VRT and VAR to research the listening and viewing habits of the Flemish community.
Nielsen Media Research has reached a seven-year agreement with NBC to provide audience measurement services to all of NBC’s national and local television businesses. These include the NBC television network; cable networks Bravo, CNBC and MSNBC; Telemundo; the 14 NBC-owned-and-operated television stations,, and the 13 Telemundo television stations. Also, NBC has agreed to support the expansion of Nielsen’s National People Meter Sample.
ForeSee Results, an Ann Arbor, Mich., online customer satisfaction management firm, announced that global staffing provider Kelly Services has selected the company’s online customer satisfaction management solution for its public and private Web sites. After using ForeSee Results’ solutions to analyze customer satisfaction scores for job seekers, Kelly now plans to implement the solution to measure satisfaction with its Kelly eOrder online ordering process and its internal Web sites.
New companies/new divisions/relocations/expansions
Colwell & Salmon Communications, Inc. has signed an agreement to lease an additional 4,500 square-feet of space at its corporate headquarters in Albany, N.Y. The additional space will house administrative offices, a training facility equipped with videoconferencing capabilities and an expanded lunch facility.
Herndon, Va.-based WebSurveyor has expanded its operations and moved into a larger office facility at 505 Huntmar Park Drive, Suite 225, in Herndon.
Germany-based GfK Group has launched GfK Media Ltd., a U.K.- based media research company.
Company earnings reports
Paris-based Ipsos generated revenues of EUR 538.5 million in its financial year ended December 31,2002. This represents an increase of 12.1 percent on the 2001 figure of EUR 480.2 million. The euro’s rise affected the pace of Ipsos’ growth. Had exchange rates stayed the same, revenues would have risen by 18.1 percent to almost EUR 570 million. At constant scope and exchange rates, Ipsos’ revenue growth was 8.0 percent, in 2002. In the fourth quarter of 2002, Ipsos’ revenues totaled EUR 164.9 million, up 12.0 percent with respect to the 147.3 million achieved in the year-earlier period. At constant scope and exchange rates, fourth-quarter growth was 8.3 percent, slightly higher than the recorded rate of the third quarter (8.0 percent). Revenues grew very strongly in North America as well as in Latin America, while revenue growth remained moderate in Europe.
WebSurveyor Corporation, Herndon, Va., announced record revenues for the 2002 calendar year. Revenue grew by more than 100 percent, marking the fourth consecutive year of revenue growth at 100 percent or more for the company.
Germany-based GfK Group reported preliminary figures indicating that 2002 sales rose by 10.5 percent from EUR 505.8 million to EUR 558.8 million. Earnings before interest and tax (EBIT) including income from participations increased by 53.2 percent to EUR 50.1 million (previous year: EUR 32.7 million). The margin rose from 6.5 percent to almost nine percent. GfK saw a 10.5 percent increase in sales to EUR 558.8 million and a sharp rise in EBIT including income from participations of 53.2 percent to EUR 50.1 million. Sales are 1.6 percent lower than the figure forecast in autumn 2002. This is essentially due to the strong euro and the fact that clients postponed some of their orders due at the end of the year until the new financial year. There has been an above average increase in the volume of orders received in January 2003 which are up 8.4 percent to EUR 105.6 million.
For financial year 2002, GfK’s annual accounts will be reported under U.S. GAAP for the first time. In order to make the special features associated with the change in accounting transparent and to facilitate comparison with the previous year, GfK is also publishing pro forma statements which include the results of the five companies that would not have been consolidated in 2001 under U.S. GAAP. These are G+E Marketing Research S.A. and Emer-GfK S.L., both in Spain, GfK Marketing Services and Metris, both in Portugal, for the full 12 months of the previous year, as well as Intomart GfK Benelux in the Netherlands for the first six months of the previous year. From January 1, 2002, all five companies fulfilled the U.S. GAAP requirements and accordingly were fully consolidated from that date onwards. The pro forma financial statements for 2001 below are intended for comparative purposes.
Following organic growth of 2.3 percent in the first nine months of 2002, GfK almost tripled this figure in the fourth quarter of the year. For 2002 as a whole, organic growth amounted to 3.5 percent. Net of the fixed volumes from long-term contracts, the figure stands at 5.3 percent. GfK has therefore achieved its
goal of growing faster than the market research sector as a whole, which, according to experts, grew by just under three percent over the same period. Acquisitions contributed 7.7 percent of growth. Exchange losses, particularly in Asia and the Pacific and America, reduced growth in sales by 0.7 percent.
United Business Media released 2002 financial results for its various marketing research holdings. Revenue at NOP World increased by 9.3 percent to £213.0 million. Adjusting for the effects of acquisitions and foreign exchange, underlying revenue decreased by 10.6 percent. Profits decreased by 25.4 percent to £17.9 million, or by 21.0 percent on an underlying basis. The U.K. operations, the U.S. continuous media and the automotive businesses performed strongly and contributed all of the profits in 2002. The health care and custom businesses in the U.S. experienced sharp downturns in revenue, which has necessitated extensive cost reduction programs. Profit margins reduced from 12.3 percent to 8.4 percent. NOP World Health was particularly impacted by the major market research trend to rapid growth in online data collection. At Market Measures/Cozint (MMC) this grew from $7 million in 2001 to over $30 million in 2002. Much of this has been cannibalistic, as traditional forms of data collection in the core custom business have switched over
to the Internet. This has had the effect of reducing the margin on custom research. At the same time as this transformation was taking place, the pharmaceutical industry experienced slower growth, fewer product approvals from the FDA and an increasing number of patent expirations. This reduced market research expenditures in areas which supported new product development and led to clients taking lower-cost options. The effect in 2002 of these changes has been a decline in underlying revenues in the old MMI business, a reduction in margin on custom research and considerable investment in next-generation product. Although NOP’s U.K. revenues were in line with last year’s, profit increased due to strong revenue performances from the business and health care divisions and margin improvements in both automotive and mystery shopping. Mediamark Research (MRI) maintained its growth record with improved revenue and profits and success in renewing all of its multi-year contracts. RoperASW’s revenues were reduced by client budget pressures and competitive pricing. Profitability was reduced by the investment in new product introductions. BothAllison-Fisher (AFI) and NOP Auto U.S. achieved increased revenues and profits. AFI’s syndicated sales and new additional custom business boosted topline growth. NOP Auto’s U.S. revenue was boosted by the opening of a new office in California. Investment in new product initiatives reduced profit by £2 million.
St. Petersburg, Fla.-based Catalina Marketing Corporation reported revenue in its research operations increased 8 percent compared to the third quarter of the prior year. The research operations are conducted by Alliance Research. Catalina Marketing Research contributed approximately $0.01 per company common diluted share during the quarter.
SPSS Inc., Chicago, announced results for the fourth quarter and fiscal year ended December 31, 2002. Revenues increased 12 percent to $54.0 million in the quarter ended December 31, 2002, as compared to $48.2 million in the same period in 2001. Pro forma diluted earnings per share (excluding non-recurring charges and including the effects of the adoption of SFAS No.142 concerning goodwill and other intangible assets) totaled $0.20 for the quarter ended December 31, 2002, as compared to $0.25 for the same period in 2001. These results were achieved with the effects of an increase of 15 percent to the weighted average shares outstanding for the quarter to 17,249,000, as compared to 15,016,000 for the same period in 2001.
On a reported basis, diluted earnings (loss) per share for the quarter ended December 31, 2002, was ($0.13) compared to ($0.73) in the same period in 2001. Such reported results include non-recurring charges and the effects of the adoption of SFAS No.142.
For the fiscal year ended December 31, 2002, pro forma diluted earnings per share and revenues were $0.48 and $209 million, respectively, compared to pro forma diluted earnings per share and revenue of $0.56 and $187.4 million, respectively, in the same period the previous year. Such pro forma results exclude acquisition and other non-recurring charges, as well as the company’s consolidated noncore investment in Illumitek Corporation, and include the effects of the adoption of SFAS No.142 (goodwill and other intangible assets). On a reported basis, diluted earnings (loss) per share and revenues were ($0.56) and $209.3 million, respectively, compared to diluted earnings (loss) per share and revenue of($1.52) and $176.6 million, respectively, in the same period in 2001.
Opinion Research Corporation, Princeton, N.J., announced financial results for the fourth quarter and fiscal year ended December 31, 2002. After a $5.9 million charge for goodwill impairment, the company experienced a net loss for the year of $2.9 million, or ($0.49)per diluted share, versus net income of $1.6 million, or $0.27 per diluted share in 2001. Because the goodwill impairment charge is a non-cash expense, it does not affect cash flow from operations. For 2002, cash flow from operations was $10.5 million, up from $9.4 million in 2001. This cash was used primarily to reduce debt. At December 31, 2002, total debt was $46.9 million, a reduction of $8.5 million, or 15 percent, since December 31,2001.
Revenues for the fourth quarter were $44.7 million, versus $44.0 million in the corresponding quarter last year. Social research revenues were $28.4 million, versus $24.5 million last year. U.S. and U.K. market research revenues were $13.5 million, up from $13.1 million in the prior year. Teleservices revenues were $3.2 million, down from $5.3 million last year.
Revenues for the full year were $175.3 million, versus $176.9 million in 2001. Social research revenues were $105.5 million, versus $95.3 million last year. U.S. and U.K. market research revenues were $52.0 million, down from $59.6 million in the prior year. Teleservices revenues were $15.6 million, versus $18.5 million last year.
Net loss for the fourth quarter was $5.3 million, or ($0.88) per diluted share, versus net income of $0.2 million, or $0.03 per share, in last year’s fourth quarter. Excluding a $5.9 million goodwill impairment charge, net income for the fourth quarter would have been $0.7 million or $0.11 per diluted share. This is below the company’s previous guidance of between $0.9 and $1.1 million, primarily due to lower than expected teleservices results and a higher than expected tax provision.
For the full year, the net loss was $2.9 million, or ($0.49) per diluted share, versus net income of $1.6 million, or $0.27 per diluted share in 2001. Excluding the goodwill impairment charge and the cumulative effect of an accounting change, net income for 2002 would have been $3.3 million or $0.55 per diluted share.
Jupitermedia Corporation, New York, reported results for the quarter ended December 31, 2002. Revenues for the fourth quarter of 2002 were $11.7 million compared to revenues of $10.9 million for the same period last year. Net income for the fourth quarter was $458,000, or $0.02 per share, compared to a net loss of $5.0 million, or ($0.20) per share, for the same period last year.
For the year ended December 31, 2002, revenues were $40.7 million compared to $44.0 million for 2001. Net loss for the year ended December 31, 2002 was $511,000, or ($0.02) per share, compared to a net loss of $102.2 million, or ($4.03) per share for the prior year.
IMS Health, Fairfield, Conn., reported full-year 2002 diluted earnings per share from recurring operations of $0.98, a 9 percent increase over 2001 results and consistent with guidance.
Revenue in 2002 grew to $1.4 billion, up 7 percent, and net income from recurring operations totaled $279.8 million, a 3 percent increase from a year earlier.
For the quarter ended December 31, 2002, IMS reported diluted earnings per share from recurring operations of $0.28, a 27 percent year-over-year increase. Fourth-quarter 2002 revenue totaled $381.9 million, up 9 percent constant dollar and 12 percent on a reported basis. Constant-dollar growth eliminates the impact of year-over-year foreign currency fluctuations. Net income from recurring operations was $78.3 million, a 17 percent increase from the year-earlier quarter.