News notes

New York-based Nielsen Media Research has created the African American Advisory Council (AAAC), which consists of 12 industry, community and business leaders who will advise Nielsen on a range of issues involving sampling of African-Americans for television audience measurement in the U.S. and will assist Nielsen in reaching out to African-American communities and those within the industry.

Acquisitions/transactions

ACNielsen, New York, has acquired the Modeling Group, a Stamford, Conn.-based provider of marketing-mix modeling data. The Modeling Group will become part of ACNielsen’s Analytic Consulting global business unit. Financial terms were not disclosed. The Modeling Group’s two principals, Sharon Ameri and Dipita Chakraborty, will take senior leadership positions within ACNielsen Analytic Consulting.

Market research group Taylor Nelson Sofres has bought a controlling interest in Time Research SA, a Chile-based firm, for an undisclosed sum.

Millward Brown has acquired Argentina-based research firm ID Consultores. ID Consultores has operated as a Millward Brown licensee since 1995. Millward Brown’s Argentinean office will be led by the existing head of ID Consultores, Julio Fresno Aparicio.

Cambridge, Ma., research firm MedPanel has been acquired by MCF Corporation, San Francisco, and will become a wholly-owned subsidiary of MCF operating under the name Panel Intelligence Inc. Clients will continue to pay a subscription fee directly to MedPanel for primary research.

Seattle-based Global Market Insite Inc. has acquired Appian Analytics, a San Ramon, Calif., developer of business analytics solutions. Appian Analytics will help support GMI’s Enterprise Research Management vision by rounding out GMI’s service offering through its three core competencies: business analytics services, high-volume data processing, and data visualization. Appian Analytics Founder Anthony Milano will continue to serve as president of Appian Analytics. The terms of the acquisition were not disclosed.

MarketingExperiments.com, a Jacksonville Beach, Fla., research firm, has acquired MarketingSherpa Inc., a Warren, R.I., publisher of marketing case studies and benchmark data. Financial details were not disclosed.

Alliances/strategic partnerships

Wilton, Conn., research firm Greenfield Online Inc. and Turnkey Sports and Entertainment, Haddonfield, N.J., have formed an alliance under which sports marketers will be able to survey core sports fans like ticket buyers and event attendees to measure the effectiveness of sponsorship and audience-building efforts.

Association/organization news

The Mystery Shopping Providers Association announced four new members and two new directors for its 2006-2007 North America board of directors. Tom Mills, CEO of Howard Services Inc., has been named president; Christopher Warzynski, vice president of Beyond Hello, has been named vice president; Judi Hess, owner of Customer Perspectives, has been named treasurer; Reb Henry, president of Feedback Plus, has been named secretary. The two new directors are Renee DeSantis, president of Mystery Shoppers Inc. and Game Film Consultants, and Arcadio Roselli, with Service Evaluation Concepts.

The Interactive Marketing Research Organization (IMRO) has released its Professional Standards for Database Best Practices. The goal of the document is to set a standard for online research as well as provide a tool for online researchers to conduct research in an ethical way that will also meet client needs. “I believe the document is groundbreaking and will provide invaluable direction for those working in the online research space,” said Donna Wydra of Socratic Technologies and chair of IMRO’s Professional Standard Committee in a press release. The standards include questions that individual practitioners and panel providers must be able to address to their clients’ satisfaction, along with recommended policy points, where appropriate. They can be viewed at www.imro.org.

Awards/rankings

Research Reporter, a market research information management system from Australian company Insight Marketing Systems, won the MRS/ASC Award for Technology Effectiveness at the Market Research Society’s annual award ceremony for Research Excellence and Effectiveness in London in November.

San Francisco-based MarketTools has been named to Deloitte & Touche’s 2006 Technology Fast 50 Program for Silicon Valley, ranking 13th in the Internet, media and entertainment, and communications category. In addition, MarketTools ranked 269 on Deloitte’s 2006 Technology Fast 500, a listing of the 500 fastest-growing technology, media, telecommunications and life sciences companies in North America. Rankings are based on percentage revenue growth over five years from 2001–2005, during which MarketTools grew 563 percent.

Dallas-based research firm eRewards Inc. ranked number 22 in the Dallas 100 Awards, presented by the SMU Cox Caruth Institute for Entrepreneurship, which recognizes the top 100 fastest-growing, privately-held companies in the Dallas/Fort Worth area.

Separately, eRewards Inc. announced it ranked number 197 on Deloitte’s 2006 Technology Fast 500. Rankings are based on percentage revenue growth over five years, from 2001–2005. eRewards, Inc. grew 816 percent during this period.

In addition, eRewards ranked 23rd on the Texas Technology Fast 50, a ranking of the 50 fastest-growing technology firms in Texas.

New accounts/projects

ACNielsen U.S. and Church & Dwight Co., Inc. jointly announced a new long-term arrangement designating ACNielsen as a primary provider of marketing information services on a global basis. ACNielsen will provide point-of-sale and consumer panel information plus a range of analytics and related software. In addition, Church & Dwight will have access to a number of other ACNielsen capabilities.

New York-based Nielsen Media Research and News Corporation announced an eight-year agreement under which Nielsen will provide audience measurement services for 49 News Corp. television entities. The pact consolidates more than 150 individual agreements between the companies. Financial terms were not disclosed.

Reckitt Benkiser has inked a three-year agreement to extend its use of Research Reporter, the Web-based market research management system developed by Australian company Insight Marketing Systems.

New York-based Arbitron Inc. and VNU announced that Wal-Mart Stores Inc. has signed a subscription agreement for 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. Wal-Mart will also join the Project Apollo Steering Committee, a group of seven advertisers who, along with their advertising agencies, are advising Arbitron and VNU on the design of the Project Apollo service.

Intuit Inc. has renewed its information services agreement with comScore Networks, Reston, Va., for an additional two-year period. During this time, comScore will provide Intuit with marketing intelligence including Internet audience measurement services and analyses of consumers’ online behavior.

New York-based Arbitron Inc. announced that Interep, an independent national radio representative firm, has signed an agreement for Arbitron Portable People Meter (PPM) radio ratings services in the top 50 radio markets when Arbitron commercializes the PPM.
Separately, Hispanic agencies Zubi Advertising and Lopez Negrete Communications have signed an agreement for Arbitron PPM radio ratings services in Houston.

New York-based TNS Media Research has signed an agreement to make media agency Starcom USA the first user of TNS’s digital audience measurement services. Based on anonymous set-top box data coming from 300,000 Charter Communications digital subscribers in the Los Angeles market, the research will help Starcom advance its understanding of the viewing habits of digital consumers, thus enhancing the media plans it activates on behalf of clients.

New companies/new divisions/ relocations/ expansions

London-based Research Now has opened a Chicago office and named Mike Gray vice president - client development to build the Chicago team.

Boston-based researcher Kadence has opened Kadence Research India, a full-service operation, in Delhi.

Paris-based Ipsos has opened two new offices, one in Cairo and one in Baghdad. In Egypt, Ipsos acquired 80 percent of the shares of local research company International Marketing and Management Institute. Amr Kais serves as managing director. In Iraq, Ipsos acquired 70 percent of the shares of research company IDRS, which was established two years ago based on an agreement with Ipsos for the purpose of exclusively handling all Ipsos fieldwork business in Iraq.

Company earnings reports

For the three-month period ended September 30, 2006, Datascension Inc., Brea, Calif., reported having booked $4,217,471 in gross revenue during the quarter. This compares to $2,365,454 for the same quarter in 2005, representing a year-over-year increase of 78 percent in revenue. Gross profit for the quarter was $1,213,617, which compares to $238,197 for the third quarter 2005, representing a year-over-year increase of 410 percent in gross profit. For the nine-month comparables, Datascension booked revenue of $10,827,468 for the first three quarters in 2006, which compares to $6,864,011 for the first three quarters in 2005. Datascension booked $9,752,935 in revenue for the full year 2005.

Germany-based GfK Group reported sales in the first nine months of 2006 increased by 27.5 percent year-on-year to EUR 800.4 million. Adjusted operating income increased 34.2 percent to EUR 100.2 million. The margin - the ratio of adjusted operating income to sales - amounted to 12.5 percent and was significantly higher than the prior year’s 11.9 percent.

In the first nine months, in organic terms, the company grew by 5.7 percent. Growth from acquisitions amounted to 21.5 percent. This increase stemmed essentially from the consolidation of the former NOP World companies, whose business performance has been included as of June 1, 2005. Positive currency effects contributed 0.3 percent to growth.

At EUR 371.7 million, sales generated by custom research in the first nine months were 38.9 percent higher than in the prior year. The retail and technology division contributed EUR 166.5 million to consolidated sales. Sales in the consumer tracking division rose by 9.8 percent to EUR 78.8 million; the growth was completely organic in origin. The division recorded the strongest organic growth of all five business divisions. Over the same period, total income climbed 152.4 percent to EUR 5.3 million. The margin also rose from 2.9 percent in the prior year to 6.8 percent.

GfK’s sales in its media division rose by 35.1 percent to EUR 84 million in the first nine months. This increase was due to a large extent to the acquisition of NOP World companies. Organic growth in sales amounted to 4.8 percent. Total income improved to EUR 18.8 million, with growth from acquisitions accounting for 67.5 percent and organic growth 44.2 percent. The margin climbed from 14.3 percent in the prior year to 22.3 percent. Business activities by U.S. subsidiary Mediamark Research were particularly successful.

Sales in the health care division rose in the first nine months by 39.7 percent to EUR 95.7 million. While acquisitions increased sales by 37.1 percent, organic sales improved by 2.3 percent. Total income climbed 27.2 percent to EUR 8.9 million. The margin improved from 8.9 percent in the first half of the year to 9.3 percent in the first nine months. The margin for the prior year stood at 10.2 percent.

In results for the third quarter and nine months ended September 30, 2006, National Research Corporation, Lincoln, Neb., reported revenues for the quarter were $13.3 million, compared with revenues of $10.1 million for the same period in 2005, an increase of 31 percent. Net income for the quarter was $2.3 million, or $0.34 per basic and diluted share, compared with net income of $2 million, or $0.29 per basic and diluted share, in the prior year period. Earnings per share for the quarter were negatively impacted by $0.02 per share as a result of the effect of Statement of Financial Accounting Standards (SFAS) No. 123R adopted in the first quarter 2006. Revenues for the nine months ended September 30, 2006 were $33.5 million compared with revenues of $23.9 million for the same period of 2005. Net income for the nine months was $4.9 million, or $0.71 per basic and $0.70 per diluted share, compared with $3.7 million, or $0.52 per basic and diluted share, in the prior-year period. Earnings per share for the nine months were negatively impacted by $0.06 per share as a result of the effect of the company’s adoption of SFAS No. 123R.

In results for the quarter and nine months ended September 30, 2006, Chicago-based SPSS Inc. reported record third-quarter revenues of $64.7 million, an 11 percent increase from $58.3 million in the third quarter of 2005. New license revenues were $30 million, up 10 percent from $27.4 million in the 2005 third quarter. For the nine months ended September 30, 2006, revenues totaled $190.4 million, a 10 percent increase from $173.8 million in the same period in 2005. New license revenues were $89.2 million, up 15 percent from $77.8 million in the first nine months of 2005.

Operating income in the third quarter rose 18 percent to $9.6 million, or 15 percent of total revenues, from $8.2 million, or 14 percent of total revenues, in the same quarter in the previous year. Operating income for the nine months ended September 30, 2006 increased 16 percent to $22.6 million, or 12 percent of total revenues, from $19.4 million, or 11 percent of total revenues, for the same period in 2005. Operating income for 2006 is net of the impact of charges for share-based compensation of $1.9 million and $5 million in the third quarter and nine-month periods, respectively, primarily reflecting the 2006 required adoption of SFAS 123R.

Diluted earnings per share (EPS) in the 2006 third quarter were $0.28, compared to $0.22 for the same period in 2005. EPS for the nine months ended September 30, 2006 were $0.63, compared to $0.55 in the same 2005 period. The effective income tax rate for the 2006 nine-month period is estimated at 37 percent, compared with the 41 percent effective tax rate in the same period in 2005. Cash totaled $119.5 million as of September 30, 2006, up from $84.4 million on December 31, 2005.

Paris-based Ipsos’ revenues for the first nine months of 2006 came to EUR 613.2 million, a 24.9 percent increase on the same period a year earlier. Three factors drove the growth in revenues over the first nine months: changes in the scope of consolidation, with the integration of MORI in the U.K., Understanding UnLtd in the U.S. and Camelford Graham in Canada, generated growth of 14.7 percent; currency effects contributed 2.2 percent; organic growth contributed 8 percent.

Taking the third quarter alone, growth was slightly less strong, although it still remained ahead of the market as a whole. Changes in the scope of consolidation generated growth of 16 percent, reflecting strong performances at recently acquired companies. Currency effects made a negative contribution of 1.6 percent. Organic growth was 7 percent, due to a less favorable basis of comparison than in the first half and a level of sales activity that recovered more slowly than expected after the summer.

Harris Interactive, Rochester, N.Y., released financial results for its first quarter of fiscal 2007, which ended September 30, 2006. Revenue for the first quarter of FY2007 was $48 million, down 2 percent when compared with $48.9 million of revenue reported for the same period a year ago. U.S. revenue was $36.6 million, down 1 percent from $37.1 million reported for the FY2006 first quarter. European revenue was $11.4 million, down 4 percent from the $11.8 million of revenue reported for the same period a year ago. Foreign currency exchange rates had a $0.6 million positive revenue impact for the quarter.

Global Internet revenue for the first quarter of FY2007 was $28.9 million, up 3 percent from the previous year’s first quarter Internet revenue of $28 million. U.S. Internet revenue was $24.4 million, down 1 percent when compared with $24.8 million in the first quarter of FY2006. European Internet revenue was $4.5 million, up 40 percent from the $3.2 million of Internet revenue reported in the same period in 2005. For the quarter, Internet revenue comprised 60 percent of consolidated revenue, 67 percent of the U.S. revenue and 39 percent of the European revenue, versus 57 percent, 67 percent and 27 percent respectively one year ago.

First fiscal quarter operating income was $1 million or 2.1 percent of revenue, compared with operating income of $2 million, or 4.1 percent of revenue in 2005. Net income for the quarter was $0.9 million, or $0.02 per diluted share, as compared with net income of $1.2 million, or $0.02 per diluted share for the first quarter of fiscal 2006.

Sales bookings for the first fiscal quarter were $43.9 million, down 2 percent when compared with $44.9 million in sales bookings reported for the same period a year ago.

For the third quarter of 2006, Norway-based FIRM reported an increase in revenue of 32 percent compared to 2005. FIRM achieved revenue of $4.9 million in the third quarter of 2006 compared to $3.7 million in the corresponding quarter of 2005. In other highlights of the third quarter of 2006, the company reported 32 percent organic revenue growth (Q3 2005: 35 percent), 11 percent EBIT margin (Q3 2005: 2 percent margin), and strong growth in both North America and EMEA.

For its third quarter ended September 30, 2006, Greenfield Online Inc., Wilton, Conn., reported total net revenue of $24.9 million, compared to $23.1 million for the prior year period. Total gross profit was $18.9 million or 76 percent of revenues for the third quarter of 2006, as compared with $16.4 million or 71 percent of revenues in the prior year period.

Operating income was $2.5 million for the third quarter of 2006 or 10 percent of revenue, including a one-time charge of $0.4 million related to the management change in the company’s Ciao survey solutions and comparison shopping segments announced on July 25, 2006, as compared to $0.8 million or 3.6 percent of revenue for the prior year period, which included a $1 million one-time charge related to the management changes the company announced on September 29, 2005.

Net income for the third quarter of 2006 was $1.8 million, including the one-time charge, as compared with $1.6 million, including the one-time charge, for the prior year period.

Net cash flow provided by operating activities was $5.8 million for the third quarter of 2006 as compared to $7.2 million for the prior year period.

For the third quarter of 2006, adjusted EBITDA excluding restructuring charges and one-time charges, a non-GAAP financial measure, was $6.7 million or 27.1 percent of revenue, as compared to $4.6 million or 19.8 percent of revenue for the prior year period.

For its third quarter ended September 30, 2006, Forrester Research Inc., Cambridge, Mass., reported total revenues were $44.1 million, compared with $39 million for the third quarter of 2005. Revenue related to the Ultimate Consumer Panel business, which was sold during the third quarter, is included as a component of income from discontinued operations for both periods.

On a GAAP-reported basis, Forrester reported net income of $5.3 million or $0.22 per diluted share, compared with net income of $2.6 million, or $0.12 per diluted share, for the same period in the previous.

On a pro forma basis, net income was $6 million, or $0.26 per diluted share, for the third quarter of 2006, which excludes non-cash stock-based compensation of $2.5 million, amortization of $474,000 of acquisition-related intangible assets, net non-marketable investment gains of $98,000, gains from the sale of the discontinued operations of $1.4 million, and income from discontinued operations of $51,000 and which reflects a pro forma effective tax rate of 37 percent. This compares with pro forma net income of $4.2 million, or $0.19 per diluted share, for the same period in 2005, which excludes non-cash stock-based compensation of $729,000, amortization of $786,000 of acquisition-related intangible assets, non-marketable investment gains of $241,000, and $82,000 of losses from discontinued operations and reflects a pro forma effective tax rate of 35 percent.

In nine-month results, total revenues were $132.5 million, compared with $110.7 million for the same period in 2005. Revenue related to the Ultimate Consumer Panel business, which was sold during the third quarter, is included as a component of income from discontinued operations for both periods.

On a GAAP-reported basis, Forrester reported net income of $10.7 million, or $0.47 per diluted share, for the nine months ended September 30, 2006, compared with net income of $7.8 million, or $0.36 per diluted share, for the same period in 2005.

On a pro forma basis, net income was $15 million, or $0.66 per diluted share, for the nine months ended September 30, 2006, which excludes non-cash stock-based compensation of $6 million, amortization of $1.6 million of acquisition-related intangible assets, net non-marketable investment gains of $305,000, gains from the sale of discontinued operations of $1.4 million, and income from discontinued operations of $300,000 and which reflects a pro forma effective tax rate of 37 percent. This compares with pro forma net income of $10.4 million, or $0.47 per diluted share, for the same period in the previous year, which excludes non-cash stock-based compensation of $1 million, amortization of $2.7 million of acquisition-related intangible assets, and marketable and non-marketable investment gains of $2 million, and $314,000 of losses from discontinued operations, and which reflects a pro forma effective tax rate of 35 percent.

New York-based Guideline Inc. reported revenues for the nine months ended September 30, 2006 of $34,671,000, an increase of 10 percent versus revenues of $31,548,000 in the prior year. Net income attributable to common shareholders for the nine months ended September 30, 2006 was $1,057,000 or $0.05 per basic and fully diluted share as compared to a loss of ($101,000), or ($0.01) per basic and fully diluted share for the same period of the prior year.

EBITDA for the nine months ended September 30, 2006 was $3,029,000, a 122 percent increase compared to EBITDA of $1,367,000 in the prior year. Operating income for the nine months ended September 30, 2006 of $1,283,000 represents a 142 percent increase compared to operating income of $531,000 in the prior year. EBITDA exclusive of non-cash stock compensation expense for the nine months ended September 30, 2006 was $3,699,000, a 100 percent increase compared to $1,850,000 in the same period of the prior year.

During the nine months and quarter ended September 30, 2006, Guideline recognized a pre-tax gain of $626,000 resulting from proceeds received related to its prior proportionate minority ownership interest in Strategic Research Institute, which was sold.
Revenues in the third quarter of 2006 were $11,453,000 versus revenues of $11,433,000 in the prior year. Net income attributable to common shareholders for the third quarter was $489,000 or $0.02 per basic and fully diluted share, a 12 percent increase compared to income of $435,000, or $0.02 per basic and fully diluted share in the third quarter of the prior year.