News notes

Target Research Group, Nanuet, N.Y., celebrated its 20th anniversary in October.

Pollster John Zogby, president and CEO of Zogby International, Utica, N.Y., will host a one-hour weekly radio program, Pulse of the Nation, which will air on the Nova M Radio network, based in Phoenix. (At press time the date of the show’s debut was unknown.) Focusing on polling data on a variety of topics, each program will include expert guests and audience participation. The show will be heard on affiliates across the nation and will also be streamed live at the network’s Web site www.novamradio.com.

Arbitron Inc., New York, has filed a patent infringement suit against International Demographics Inc. (dba the Media Audit), Ipsos Group S.A., Ipsos ASI Inc., Ipsos America Inc. aka Ipsos North America and Ipsos Media (collectively “the Ipsos entities”). The complaint, filed in the United States District Court for the Eastern District of Texas, alleges that International Demographics and the Ipsos entities are infringing three patents owned by Arbitron, United States Patents No. 5,787,334, No. 5,574,962 and No. 5,483,276, each relating to electronic audience measurement technology.

In its suit, Arbitron seeks a permanent injunction against International Demographics and the Ipsos entities, in addition to adequate compensatory damages as determined by the court.

NetRatings Inc., New York, and Coremetrics, San Mateo, Calif., announced in October the settlement of NetRatings’ patent infringement action against Coremetrics. Under the terms of the settlement, NetRatings has dismissed all pending legal claims and has licensed its patent portfolio to Coremetrics, granting worldwide rights under all of NetRatings’ patents. The financial terms of the settlement were not disclosed.

India’s Great Lakes Institute of Management has created the Kotler-Srinivasan Centre for Research in Marketing to develop knowledge in marketing, focusing on research in India and its global role. The center is named for Professor Philip Kotler, S.C. Johnson & Son Distinguished Professor of International Marketing of the Kellogg School of Management, and V. Seenu Srinivasan, the Adams Distinguished Professor of Management at the Stanford Graduate School of Business. Great Lakes Institute is located in Chennai in the Indian state of Tamil Nadu.

Norway-based research software company FIRM has formed the Confirmit advisory board to provide a link for the Confirmit R&D team and FIRM’s executive management to meet with research industry executives. Board members are: Tony Cowling, president and special advisor at TNS; Ben Willson, director of online research services at ACNielsen; David St. Pierre, chief technology officer at Greenfield Online; Denis Conway, senior vice president at the NPD Group; Joe Giacobbe, senior vice president at Ipsos; Rick Rodgers, executive director at Carbonview Research.

The Council for Research Excellence, an independent forum of media industry researchers created by Nielsen Media Research, will commission a pilot study by Ball State University’s Center for Media Design (CMD) to observe how individuals consume traditional and emerging video platforms inside and outside the home.

The study, proposed jointly by CMD and Sequent Partners, a brand and media metrics consultancy, is intended to help media researchers understand the relative positions of video-based media and how people interact with each of them.

To conduct the pilot, researchers will directly observe the minute-by-minute activities of sample participants. These observers will categorize participants’ media exposure, life activities, location and attention. The insights derived from the pilot will help researchers assess the viability of a larger project that would be run over a full year which - if pursued - will be designed to inform how different emerging video platforms are approached and prioritized for measurement.

The Council for Research Excellence was created by Nielsen Media Research in 2005, via a dedicated $2.5 million research and development fund, and renewed for an additional $2.5 million earlier this year. It serves as an independent forum for Nielsen to gain greater insights into video viewing habits and to ensure that client priorities are reflected in Nielsen’s R&D spending.

NetRatings Inc., New York, announced the expansion of its patent enforcement program and the filing of lawsuits against four companies, alleging infringement of patents owned or controlled by NetRatings. NetRatings has filed complaints in federal courts in the District of Oregon against WebTrends Inc., the District of Minnesota, Fourth Division, against Digital River Inc. and its subsidiary, Fireclick Inc.; and the Southern District of New York against TACODA Inc. The NetRatings patent portfolio, which relates generally to the collection, analysis and reporting of information concerning Internet and/or computer usage and activity, includes United States Patent Nos. 5,675,510; 5,796,952; 6,108,637; 6,115,680; 6,138,155; 6,643,696 and 6,763,386. Several of these patents were asserted in the lawsuits.

Under the company’s patent enforcement program, NetRatings has entered into patent licensing agreements with Omniture Inc., Coremetrics Inc., SageMetrics Corp., Unica Corp., and Visual Sciences. In addition, NetRatings has patent infringement suits pending against WebSideStory Inc., WhenU.com Inc., and 180solutions Inc.

Acquisitions/transactions

Lightspeed Research, Basking Ridge, N.J., has acquired the Ultimate Consumer Panel business of Forrester Research Inc., Cambridge, Mass. The Forrester Ultimate Consumer Panel examines consumer credit card, banking statement and transaction data to help understand consumers’ financial services behaviors. As part of the acquisition, members of Forrester’s Ultimate Consumer Panel business team, including Senior Vice President Gregory Flemming and Business Development Director Melissa Hurley Lynch, have joined Lightspeed and continue to manage the Ultimate Consumer Panel operation.

Germany-based GfK Group has acquired a majority stake in the Latvian market research institute InMind, based in Riga, which will operate under the name GfK Custom Research Baltic. Gfk also established Riga-based GfK Marketing Services Baltic. The new companies in Latvia will coordinate all Baltic projects.

Copenhagen-based iMotions - Emotion Technology A/S, which develops emotional response software, has raised $1.7 million in bridge funding to be used to strengthen and expand its organization worldwide. The new investor is Niwa Group, an investment group controlled by Niels Wall.

Netherlands-based VNU Group B.V. has completed the sale of its 34.3 percent stake in Solucient, an information products company serving the health care industry, to the Thomson Corporation. Terms were not disclosed. VNU announced an agreement to sell its stake in Solucient on September 18, 2006, saying the business no longer was considered a strategic fit with VNU’s Marketing Information group, which focuses primarily on the fast-moving consumer goods sector. VNU had been a minority owner in Solucient since 1999, when it formed a joint-venture business with private-equity firm Veronis, Suhler & Associates (now Veronis Suhler Stevenson) that was later renamed Solucient. With the closing of this transaction, Thomson now owns 100 percent of Solucient.

Separately, VNU Group announced in October that it was proposing to acquire the outstanding publicly held minority interest in NetRatings Inc. for $16 per share in cash, representing a 10 percent premium over the company’s closing price on October 6, 2006, and a 16 percent premium to the six-month average closing price. VNU owns 60.5 percent of the common stock of NetRatings currently outstanding. Following the transaction, NetRatings would become a wholly-owned subsidiary of VNU.

Separately, VNU Group announced that it plans to explore strategic alternatives for its Business Media Europe (BME) group, including a possible sale of the business. BME is a Europe-based business-to-business media company.

Association/organization news

Canada’s Marketing Research and Intelligence Association (MRIA) has launched a Charter of Respondent Rights, to articulate to Canadians the industry’s commitment to respect their time, privacy and to honor the societal contribution they make by voicing their opinions.

The Charter, which sets out nine rights of respondents, is a public expression of the fact that MRIA members must adhere to the association’s code of professional conduct that protects the relationship that exists between researchers and the general public.
“Canadians clearly see the value in participating in opinion research - it’s an important forum that allows them to express their opinions to government and corporate decision-makers,” said MRIA President Nik Nanos in a press statement. “And Canadians recognize how their opinions can help shape new products and services, improve existing ones, and improve customer service; and, by the same measure, how their views can influence laws and public policies.

“Unfortunately, though, there are unscrupulous companies out there that pose as bona fide research companies, and play upon this good relationship in an attempt to sell products or services. With our new MRIA Charter as a declaration of their rights as respondents, Canadians can now better distinguish between legitimate research and fraudulent selling-under-the-guise-of-research.”

The Charter encapsulates MRIA’s Responsibilities to Respondents standards into one respondent-friendly document, informing research participants of their rights. For example: they will never be sold anything or asked for money; they are entitled to know the approximate duration of the research interview and, if contacted at an inconvenient time, may ask to be re-contacted at a preferred time; and their privacy and the privacy of their answers will be respected and strictly preserved in accordance with the law.

The American Marketing Association Foundation (AMAF) named Managing Customers as Investments: The Strategic Value of Customers in the Long Run by Sunil Gupta and Donald R. Lehmann as the recipient of the 2006 Berry-AMA Book Prize for the best book in marketing. The book brings together both customer and financial views of marketing, demonstrating a “rigorous yet simple approach to measuring the value of customers, and how to use the results to improve marketing decisions and ROI.”

The annual Berry-AMA Book Prize recognizes books whose innovative ideas have had significant impact on marketing and related fields. The following Berry-AMA Book Prize finalists were named as runners-up:

  • Don’t Just Relate – Advocate: A Blueprint for Profit in the Era of Customer Power, by Glen Urban;
  • Effective Advertising: Understanding When, How, and Why Advertising Works, by Gerard J. Tellis;
  • Hispanic Marketing: A Cultural Perspective, by Felipe and Betty Ann Korzenny;
  • Return on Customer: Creating Maximum Value from your Scarcest Resource, by Don Peppers and Martha Rogers; and
  • Social Marketing in the 21st Century, by Alan R. Andreasen.

The World Federation of Advertisers - a network of 55 national advertiser associations - has officially endorsed the development of Project Apollo in the United States. Project Apollo is a proposed marketing information service being developed by Arbitron and VNU to give advertisers a better understanding of the connection between consumer exposure to advertising on multiple media and their shopping/purchase behavior.

Arbitron and VNU have deployed a pilot panel of more than 5,000 households as a demonstration of the Project Apollo national marketing research service, which would collect multi-media and purchase information from a common sample of consumers. The pilot panel is designed to show advertisers how Project Apollo would enable a better understanding of the link between consumer exposure to advertising on multiple media and their shopping/purchase behavior. Currently six advertisers, along with their advertising agencies, are members of the Project Apollo steering committee, a group of marketers who have signed agreements for the Project Apollo pilot panel data.

Marketing Research Institute International and the University of Georgia Center for Continuing Education, developers of the Principles of Marketing Research - an online certificate course - have launched an integrated parallel track to the main course entitled Pharmaceutical Supplements. Incorporated directly into the framework of the core course, this industry-focused curriculum was created to meet the needs of marketing researchers working in the pharmaceutical industry. For more information visit www.georgiacenter.uga.edu/is/mrpharma.

Awards/rankings

Kansas City, Mo.-based Decision Insight and Frito-Lay won the American Marketing Association’s (AMA) 2006 EXPLOR award for their virtual ethnography research. The award, established in 1999, recognizes performance and leadership in online research and acknowledges the most innovative applications of technology. The field of finalists presented their research case studies at breakout sessions during the AMA’s Marketing Research Conference in Chicago in September. Decision Insight and Frito-Lay were announced the winning team during the general session on the final day of the conference and submitted an encore presentation of their case study.

Presented jointly by Frito-Lay’s strategy and insights team, led by Michelle Adams and Melanie Leach, and Decision Insight’s Brad Barash, the winning presentation - entitled “Virtual Ethnography: Predicting and Understanding Shopping Behavior (In Hyperdrive)” - provided an in-depth look at the opportunity for the snack maker to combine a simulated shopping model and ethnography techniques to speed up consumer learnings and strengthen research’s role in understanding consumers’ decision-making process.

The team used Decision Insight’s qualitative-quantitative solution, SimuShop Plus, to develop a research platform with in-depth, one-on-one chat sessions to uncover the “why” behind purchase selection. The sessions, in partnership with iModerate Research Technologies, resulted in numerous insights for Frito-Lay.

Greenfield Online Inc., Wilton, Conn., has been named to Deloitte’s Technology Fast 50 Program for the Connecticut Region, a ranking of the 50 fastest-growing technology companies in the area by Deloitte & Touche USA LLP. Rankings are based on the percentage revenue growth over five years from 2001 to 2005.

New York-based researcher TNS has received the 2006 Microsoft Vendor Program (MSVP) Excellence Award in the service category. TNS is the first market research company to have won the MSVP Excellence Award for service. In addition to this award, TNS received nominations in the quality category and was one of three finalists for overall Microsoft Vendor of the Year.

Research process outsourcing firm Pulse Group won the 2006 APICTA Award, an international program governed by a network of 16 Asian economies to provide a platform to recognize innovators and entrepreneurs in the information and communications technology sector.

Seattle-based Global Market Insite Inc. ranks No. 4 on Deloitte’s Technology Fast 50 Program for the Pacific Northwest, a ranking of the 50 fastest-growing technology, media, telecommunications and life sciences companies in Washington, Oregon and Idaho by Deloitte & Touche USA LLP. Rankings are based on the percentage revenue growth over five years, from 2001 to 2005.

New accounts/projects

Buckley Radio has entered into a multi-year agreement for Arbitron’s radio ratings services that include Portable People Meter audience measurement services when deployed in New York.

Norway-based research software company FIRM announced that Bernett Research, Boston, has licensed the Confirmit survey, community panel and report platform.

New companies/new divisions/ relocations/expansions

Portland, Ore., research firm Doxus announced plans to open an office in China in 2007. Doxus China will be led by David Ying Hong Ho.

AllPoints Research Inc. has moved to a new location at 200 West First St., Suite 100, Winston-Salem, N.C., 27101.

Research firm Kadence has opened Kadence Research India, a full-service operation, in Delhi. The office launches with a senior team of three directors, headed up by Aman Makkar, who becomes managing director of Kadence Research India.

A new research company, Forefront Consulting Group, has been founded by Kristin Luck and Ji Yeong Kim. Its offices are located at 1106 N. Hudson Ave., Hollywood, Calif., 90038. Phone 866-866-8016.

Behavioral Insights LLC has moved to 800 Westchester Ave., Suite N319, Rye Brook, N.Y., 10573. Phone 914-253-8228. Fax 914-253-8278.

Company earnings reports

In results for the second quarter of 2006, Netherlands-based VNU Group reported operating revenue of EUR 943 million for the three months ended June 30, 2006, an increase of 6 percent in constant currency over the prior year. The 2006 amount excludes a EUR 71 million reduction in revenue due to the preliminary purchase price allocation (the “deferred revenue adjustment”) related to the sale of the company to a group of private-equity investors on May 24, 2006. Operating revenue, including the deferred revenue adjustment, was EUR 872 million, up 2 percent including a favorable impact from foreign-currency translation.

VNU said its pro forma operating income for the second quarter was EUR 114 million, up 11 percent in constant currency, before items related to the sale of the company and excluding book gains in 2005. Including these items, VNU had a second-quarter operating loss of EUR 6 million, compared with operating income of EUR 101 million last year. The 2006 result includes EUR 34 million of transaction costs related to the sale of the company and a negative impact of EUR 71 million from the deferred revenue adjustment, among other smaller items. Operating income in 2005 benefited from a EUR 5 million gain from the disposition of an equity investment.

Summarizing its performance for the second quarter, the company said it continues to see good growth from expanded retail measurement, consumer panel and television audience measurement services, from new client initiatives and new products, and from U.S. trade shows and certain print and online media in Europe. The company noted that business was soft for ACNielsen in the U.S., and that its trade magazines continued to face a tough advertising climate in the U.S. and Europe.

For the first six months of 2006, pro forma operating revenue was EUR 1,833 million, up 5 percent in constant currency from operating revenue of EUR 1,648 million in 2005. The 2006 amount excludes the deferred revenue adjustment of EUR 71 million described earlier. Including this adjustment, operating revenue was EUR 1,762 million, up 1 percent in constant currency. Pro forma operating income for the first half of 2006 was EUR 185 million, up 13 percent in constant currency, before items related to the sale of the company and excluding book gains in 2005. Including these items, operating income was EUR 21 million, compared with operating income of EUR 159 million in 2005. Operating income in 2006 was reduced primarily by EUR 78 million of transaction costs related to the sale of the company and EUR 71 million as a result of the deferred revenue adjustment. First-half 2005 results include a EUR 11 million book gain from the disposition of certain businesses.

For the third quarter 2006, ended September 30, Arbitron Inc., New York, reported revenue of $90.7 million, an increase of 6 percent over revenue of $85.6 million during the third quarter of 2005. Planned spending on the Portable People Meter and Project Apollo initiatives along with the required expensing of share-based compensation contributed to increased costs and expenses for the third quarter of 7.8 percent, from $52.7 million in 2005 to $56.8 million in 2006.

Arbitron’s equity in the net income (loss) of its affiliate, Scarborough Research, declined from $193,000 in the third quarter 2005 to a loss of $1.8 million in the third quarter of 2006. This decline is due primarily to changes in the delivery schedule for Scarborough market reports.

Earnings before interest and income tax expense (EBIT) for the quarter were $32.1 million, a decrease of 3 percent over EBIT of $33.1 million during the comparable period last year.

Net income for the third quarter decreased by 3.4 percent from $20.9 million in 2005 to $20.2 million in 2006.

Net income per share for the third quarter 2006 was $0.68 (diluted) compared with $0.66 (diluted) for the third quarter 2005. The increase in net income per share for the third quarter relative to the decrease in net income for the quarter is attributable to a reduction in shares outstanding due to the company’s repurchase of its shares in the first half of 2006.

For the nine months ended September 30, 2006, revenue was $250 million, an increase of 6.5 percent over the same period last year. EBIT was $73.1 million, compared to $84.4 million in 2005. Net income for the nine months was $45.7 million or $1.51 per share (diluted), compared with $56.1 million or $1.77 per share (diluted) during the comparable period last year.

IMS Health, Fairfield, Conn., announced third-quarter 2006 revenue of $482.7 million, up 12 percent (10 percent constant dollar), compared with revenue of $432.8 million for the third quarter of 2005.

Third-quarter 2006 diluted earnings per share on a GAAP basis was $0.34, compared with $0.30 in the prior year, up 13 percent. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, earnings per share was $0.39, a 15 percent increase, compared with $0.34 per share in the same period last year. Including the expensing of equity-based compensation, adjusted (non-GAAP) earnings per share for the third quarter was $0.36, up 6 percent.

Net income on a GAAP basis was $69.3 million, compared with $71.1 million in the year-earlier quarter, a 3 percent decline. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, net income for the 2006 third quarter was $79.4 million, compared with net income of $80.6 million in the prior year, down 1 percent. Including the expensing of equity-based compensation, adjusted (non-GAAP) net income for the third quarter of 2006 declined 9 percent to $73.5 million.

Operating income in the third quarter of 2006 was $115.4 million on a GAAP basis, up 13 percent, compared with $102.2 million in the year-earlier period. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, third-quarter operating income was $123.8 million, up 12 percent on both a reported and constant-dollar basis, compared with $110.7 million in the year-earlier period. Including the expensing of equity-based compensation, adjusted (non-GAAP) operating income in the 2006 third quarter was $115.4 million, up 4 percent reported and constant dollar, over the prior year.

For the first nine months of 2006, revenues were $1,415.1 million, up 11 percent (12 percent constant dollar), compared with revenue of $1,277.1 million in the year-earlier period. Diluted earnings per share on a GAAP basis for the first nine months of 2006 was $1.20, compared with $0.84 in the prior year. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, earnings per share for the first nine months of 2006 was $1.11, a 13 percent increase, compared with $0.98 per share in the same period last year. Including the expensing of equity-based compensation, adjusted (non-GAAP) earnings per share for the first nine months of this year was $1.01, up 3 percent. Net income on a GAAP basis for the 2006 first nine months was $250 million, compared with $194.7 million in the year-earlier period. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, net income for the first nine months of 2006 rose 2 percent to $230.8 million, compared with net income of $226.5 million in the same period last year. Including the expensing of equity-based compensation, adjusted (non-GAAP) net income for the first nine months of 2006 was $209.6 million, down 7 percent.

For the first nine months of 2006, operating income was $318.5 million on a GAAP basis, a 5 percent increase, compared with $302.4 million in the year-earlier period. On an adjusted (non-GAAP) basis and excluding the expensing of equity-based compensation, operating income for the first nine months of 2006 was $354.6 million, an 11 percent increase (12 percent constant dollar), compared with $318.3 million in the year-earlier period. Including the expensing of equity-based compensation, adjusted (non-GAAP) operating income in the 2006 first nine months was $324.5 million, up 2 percent on both a reported and constant-dollar basis over the prior year.

Adjusted (non-GAAP) results for the 2006 first nine months exclude certain pre-tax income items totaling $37.3 million, primarily from the terminated VNU merger, as well as certain net tax provisions of $3.1 million. For the first nine months of 2005, results on an adjusted (non-GAAP) basis exclude certain items including a one-time tax charge of $39.5 million related to repatriating $647 million of previously undistributed foreign earnings under the American Jobs Creation Act.