News notes
Arbitron Inc., New York. has released an initial round of ratings results from the second phase of the Portable People Meter (PPM) U.S. market trial in Philadelphia. Compared to existing methods of measuring media audiences, the Portable People Meter continues to report higher average quarter-hour audiences on a 24-hour day, total-week basis for the combined electronic media stations and networks that encoded full-time. The February 2002 PPM results show increased average quarter-hour audiences for broadcast and cable television, and somewhat higher average quarter-hour audiences for radio.
The findings from the early weeks of the expanded panel of 1,500 consumers in the Philadelphia radio and television market confirm the pattern of observations reported in the previous three ratings comparisons from last year’s more limited phase of the trial in Wilmington, Del. These findings continue to suggest that Arbitron’s new ratings technology is tracking media exposure that is not included in today’s generation of TV and radio ratings methods.
Nielsen Media Research, which has an option to join Arbitron in the commercial deployment of the Portable People Meter in the United States, will participate in an expanded evaluation of the PPM results and will assist Arbitron in its analysis of the differences between the PPM trial results and Nielsen’s reported audience measurement data in Philadelphia.
Millennium Research Inc., Apple Valley, Minn., recently celebrated its fifth year in business.
Survey Sampling, Fairfield, Conn., has awarded over $175,000 in prize money so far this year to winning survey respondents who completed SurveySpot and e-LITe online surveys.
Acquistions
The Ipsos Group, Paris, has acquired the assets of ACNielsen’s U.S.-based strategic marketing research and product development consultancy, ACNielsen Vantis. Upon completion of the sale, the company will be lcnown as Ipsos-Novaction & Vantis.
Greenwich, Conn.-based NFO WorldGroup has acquired FYI Worldwide, a provider of new product volume forecasts. The new firm will be known as NFO FYI. Terms of the acquisition were not disclosed. FYI partners Ken Sobel, George Ciardi, and Dave Bieber will remain with NFO FYI. The firm will stay headquartered in Wilton, Conn., with a western regional office in Fountain Hills, Ariz.
NetRatings, Inc., Milpitas, Calif., has acquired substantially all of the assets of the AdRelevance online advertising expenditure measurement division of Jupiter Media Metrix for $8.5 million. The terms of the transaction include the immediate transfer of substantially all AdRelevance assets, including the AdRelevance suite of services, employees, historical data, client base, and an array of patent applications, trademarks, and copyrights.
NetRatings will also assume certain identified liabilities. The AdRelevance product family will be sold alongside the Nielsen//NetRatings suite of audience measurement services. Will Hodgman, the former president of the Jupiter Media Metrix Measurement Group, will join the NetRatings management team reporting directly to William Pulver, chief executive officer, NetRatings.
Schaumburg, Ill.-based ACNielsen U.S. has acquired complete ownership of the multi-channel alcoholbeverage information services that were previously owned by a joint venture with Adams Business Research. The services, marketed under the name LiquorScan, are now fully owned and operated by ACNielsen.
Aegis Communications Group, Inc., Irving Texas, has sold the business and assets of Elrick & Lavidge, its Atlanta-based marketing research division, to a wholly-owned U.S. subsidiary of U.K.-based Taylor Nelson Sofres plc. The business will become part of the TNS Intersearch family (TNS). Elrick & Lavidge revenues in the year ended December 31, 2001 were $22.9 million and pro-forma net assets at that date were $2.6 million. In a press release, Herman M. Schwarz, Aegis Communications Group’s president and chief executive officer, said, “In our review of Aegis’s position in the customer relationship management sector, we concluded that the core research offerings of our marketing research division were no longer strategic for the company. It also has become increasingly clear that the clients and employees of Elrick & Lavidge are best served with a company concentrated on marketing research. Our strategy is to focus on our core competency of delivering customer interaction solutions. To this end, the Data Analytics Group that was housed in Elrick & Lavidge has not been included in this transaction and is now part of the core Aegis offering.” Key personnel from Elrick & Lavidge will be offered positions with TNS Intersearch. Marketing research operations will be continued in Atlanta; Kansas City, Kan.; Westchester, Ill.; Clarksville, Tenn.; and Cincinnati but will formally become part of the TMS Intersearch family.
U.K.-based Millward Brown has acquired the Irish Marketing Surveyes (IMS) Group. Founded in 1963 by the late John Meagher, the group operates three major companies; Irish Marketing Surveys (to be rebranded Millward Brown IMS) and Lansdowne Market Research, both based in Dublin; and Ulster Marketing Surveys (to be rebranded Millward Brown Ulster) which is Belfast-based. The group employs 130 people full-time in Dublin and Belfast. The existing structure and local management personnel of the IMS Group will continue unchanged.
Separately, Millward Brown has acquired Westport, Conn.-based research firm Greenfield Consulting Group. Founded by Andy Greenfield in 1983, Greenfield Consulting, a Millward Brown company, reporting to Eileen Campbell, Millward Brown North America’s CEO. All other Greenfield Consulting management and staff will be retained and will continue to serve their existing clients.
Indianapolis-based Walker Information has announced Smarketing as the newest member to its global network. Founded in 1993, Mexico-based Smartketing conducts market research studies and public opinion surveys for both business-to-consumer and business-to-business companies. The firm has more than 150 full-time employees.
Taylor Nelson Sofres has completed the acquisition of the broadcast division of U.K.-based BMC News, following receipt of approval from Britain’s Office of Fair Trading. The activities of BMC’s broadcast division will be combined with the group’s existing media intelligence activities in the U.K. These activities form part of TNS Media Intelligence.
Germany-based GfK Group has acquired 51 percent of the shares in Germany-based Macon AG. Established in 1991, Macon AG produces geographical information systems. GfK has supplied Macon with basic demographic and sales data, which it uses in the digital maps and Regiograph and District software it offers. The new company, which will trade under the name GfK Macon, achieved sales of around EUR 3 million in 2001, and has 22 employees. In addition, GfK Group’s Spanish subsidiary EMER GfK increased its 27.6 percent participation in the Portuguese research firm Intercampus to a majority shareholding of 50.1 percent. Intercampus, established in 1990, achieved sales of around EUR 2.5 million in 2001.
Alliances/strategic partnerships
MSRI (Marketing Research Services Inc.), Cincinnati, has announced partnerships with Greenfield Online Inc. and Global Market Insite, Inc. (GMI). Under the terms of the agreement, Greenfield Online will provide MSRI with qualified survey respondents from its panel of 1.2 million members and through its MSN “river” sampling capabilities. MSRI has entered into an enterprise licensing agreement with GMI to use its Net-MR software suite for Web-based data collection and reporting.
Rochester, N.Y., research firm Harris Interactive has signed an agreement with Tradelink Reputation Management, S.A., Athens, Greece, making it the newest Harris Interactive Global Network member company. Tradelink will represent Harris Interactive in Greece, as well as in Bulgaria and in Cypress.
Association/organization news
At press time in May, The European Society for Opinion and Marketing Research (ESOMAR) had resumed its search for a new director general after previously named Director General Chris van Schijndel resigned due to "hitherto unforeseen private circumstances." The ESOMAR Council has asked former Director General Mario van Hamersveld to continue in his role as acting director general until a replacement is found. Separately, ESOMAR donated EUR 100,000 to Princess Margriet of the Netherlands for the Red Cross and Red Crescent Societies. Princess Margriet is chair of the Worldwide Standing Commission of the International Federation of the Red Cross and Red Crescent Societies. The EUR 100,000 will be spent on international programs in a variety of countries. After the events of September 11th, the ESOMAR council gave consideration to the cancellation policy to be applied to those who were unable to attend the ESOMAR annual congress in Rome in September 2001. The council unanimously decided that rather than reimburse registration fees to those who cancelled, ESOMAR should donate an amount equivalent to the value of these cancellation fees to charity. The council also agreed that ESOMAR should add an equivalent sum to the donation.
New accounts/projects
Sunnyvale, Calif., research firm NetRaker Corporation has entered into an agreement with Yahoo! Inc. to provide the NetRaker Suite of Web site evaluation tools to all Yahoo! business groups worldwide.
Schaumburg, Ill.-based ACNielsen U.S., has become the preferred provider of syndicated market research information to Fleming’s Retail Group. Fleming’s Retail Group operates 101 Rainbow and Food4Less "price impact" grocery stores in seven states. The Retail Group will utilize ACNielsen for sales tracking and analysis, space management, and for the creation of custom trade area reports to be used in conjunction with Fleming’s manufacturer partners.
Kadence, a London research firm, has decided to use Dub Interviewer software from Netherlands-based Nebu for its global data collection requirements.
Information Resources, Inc., Chicago, has entered into an agreement with Wyeth Consumer Healthcare, Madison, N.J., under which IRI will provide the InfoScan Reviews databases and a range of analytic services.
Jorge Garcia-Gonzalez has opened JGG Consulting, a Buenos Aires firm offering strategic marketing consulting and business performance improvement services. The firm is located at Av. Pueyrredon 2449, Piso 11, Cl119 Buenos Aires, Argentina.
Population Research Systems (PRS), a San Francisco research firm, has relocated. With the firm’s parent company, Freeman, Sullivan & Co., PRS has moved 100 Spear St., Suite 1700, San Francisco, Calif., 94105.
J.D. Power and Associates has moved its California corporate headquarters from Agoura Hills to a new and larger facility in Westlake Village. The move consolidates the firm’s corporate office with its Newbury Park, Calif., facility. The new address and contact information for the corporate headquarters: 2625 Townsgate Road, Wesflake Village, Calif., 91361.
TRBI (The Research Business International), a U.K.-based qualitative research firm, has opened two new offices in the United States. TRBI is a part of Marltz Research Inc. The two new offices will be located in New York City and Chicago, and will offer exploratory approaches such as observation and ethnography, along with other qualitative methodologies.
Robert Shulman has launched a new research firm, Markitecture, at 5 New Street, Norwalk, Conn.
Company earnings reports
For the first quarter ended March 31, Arbitron Inc., N.Y., reported revenue of $65.9 million, an increase of 9.5 percent over revenue of $60.2 million during the first quarter of 2001. Earnings before interest and taxes (EBIT) for the quarter were $27.6 million, compared with EBIT of $27.3 million during the same period last year. Net income for the quarter was $14.2 million, compared with $16.3 million for the first quarter of 2001.
Cost and expenses were higher than last year because of planned increased spending related to the RADAR service, the Portable People Meter initiative, royalties, data collection, and research and development. Net income compared to 2001 declined as a result of interest expense related to the debt incurred in connection with the reverse spin-off from Cerldian on March 30, 2001.
Net income per share for the quarter was $0.49 (basic) and $0.48 (diluted), compared with $0.56 (basic and diluted) per share during the comparable period last year. The 2001 earnings per share amounts have been adjusted to reflect the one-for-five reverse split, which became effective following Arbitron’s reverse spin-off from Ceridian on March 30, 2001. Effective January 1, 2002, the company discontinued the amortization of goodwill in accordance with generally accepted accounting principles. Had the company been required to adopt this accounting effective as of January 1, 2001, net income and diluted net income per share for the three months ended March 31, 2001 would have been $16.7 million and $0.57, respectively.
Catalina Marketing Corporation, St. Petersburg, Fla., reported results for its fourth quarter and fiscal year ended March 31. Revenue for the quarter grew 18 percent to $133.5 million compared to $113.4 million in the prior year fourth quarter. Net income for the quarter totaled $22.7 million, or $0.40 per diluted share, compared to $14.5 million, or $0.25 per diluted share, for the prior year period.
Revenue in the company’s research operations decreased approximately 9 percent compared to the prior year fourth quarter. For the fiscal year ended March 31, revenue increased approximately 7 percent over fiscal year 2001. The company’s research operations are conducted by Alliance Research. Earnings for the research operations were equal to approximately $0.01 per company common diluted share this quarter. For the fiscal year, the research operations contributed approximately $0.04 per company common diluted share.
As described below, the company implemented Statement of Financial Accounting Standard No. 142 (SFAS 142) as of the beginning of the current fiscal year, relating to the accounting for goodwill. As a result of adopting the new standard, the company’s net income and diluted earnings per share were increased during the fourth quarter by approximately $1.6 million and $0.03, respectively. Under the new standard, pro forma net income for the fourth quarter of the prior year would have been $15.5 million, or $0.27 per Diluted share.
For the 12 months ended March 31, revenue totaled $446.7 million, up 7 percent compared to $417.9 million for the prior year. Net income for the current fiscal year totaled $61.9 million, compared to $58.1 million for the annual period last year. For fiscal year 2002, earnings per diluted share were $1.08, compared to earnings per diluted share of $1.00 in fiscal year 2001. Under SFAS 142, pro forma net income for the prior year twelve-month period would have been $61.7 million, or $1.06 per diluted share.
For the fiscal 2002 third quarter ended March 31, Harris Interactive, Rochester, N.Y., reported revenue of $28.3 million, up 14 percent from the $24.8 million reported in the fiscal 2002 second quarter, and up 79 percent from the $15.8 million reported in the same period a year ago. The results include the first full quarter of revenue from Total Research Corporation, which was acquired by Harris Interactive in November 2001.
The company was cash flow-positive for the quarter for the first time and achieved $0.3 million in EBITDA. For the third fiscal quarter, the company reported a net loss of $1.2 million or ($0.02) per share, improved from a net loss of ($0.17) per share a year ago. The firm reported $28.5 million in cash and marketable securities as of March 31.
Fairfield, Conn.-based IMS Health reported diluted earnings per share from recurring operations of $0.20 for the quarter ended March 31, up 5 percent from last year’s first quarter. Net income from recurring operations grew 5 percent year over year to $58.8 million. Recurring results exclude certain pretax gains and charges totaling $0.7 million.
During the first quarter of 2002, revenue totaled $331.4 million, up 5 percent constant dollar and 1 percent on a reported basis compared with last year’s first quarter. Operating income was $91.3 million, up 2 percent constant dollar and down 5 percent on a reported basis from the year-earlier quarter. Net income rose 5 percent to $58.8 million, or $0.20 per share, in the 2002 first quarter.
NetRatings, Inc., Milpitas, Calif., announced financial results for its first quarter ended March 31. Revenues were $4.3 million, compared with $6.7 million reported in the same period one year ago. Pro forma net loss for the first quarter of 2002 was $2.3 million or a loss of ($0.07) per share on approximately 32.9 million weighted shares outstanding. (The pro forma results exclude amortization of non-cash stockbased compensation and one-time charges related to the previously announced restructuring plan and the termination of the Jupiter MediaMetrix and AC Nielsen eRatings.com acquisitions.) This compares with pro forma net loss in the same period one year ago of $700,000 or a loss of ($0.02) per share on approximately 32.6 million shares outstanding.
On a GAAP basis, which includes the amortization of non-cash stock-based compensation, and one-time charges related to the first quarter restructuring and termination of the Jupiter MediaMetrix and AC Nielsen eRatings.com acquisitions, net loss for the first quarter of 2002 was $17.7 million, or a loss of ($0.54) per share. This compares with anet loss of $3.4 million, or a loss of ($0.10) per share during the same period one year ago.
Pro forma operating expenses decreased to $5.4 million in the first quarter of 2002 from $5.8 million in the fourth quarter of 2001. During the first quarter the company completed a 15 percent workforce reduction and discontinued two unprofitable product lines. The company expects these actions to result in annualized operating expense savings of $6 million to $8 million.
First quarter gross margins were 38 percent, in line with the company’s guidance and equal to the margins posted in the fourth quarter. Cash at the end of the first quarter was approximately $297 million following the repurchase of 1.5 million shares during the quarter and the company continued to have no longterm debt.
For the first quarter of 2002, Opinion Research Corporation, Princeton, N.J., reported revenues of $42.5 million compared to first quarter 2001 revenues of $45.8 million. For the first quarter, EBITDA was $3.6 million compared to $5.4 million in the first quarter of 2001. Income for the first quarter was $789,000 and diluted earnings per share were $0.13. Both income and diluted earnings per share exclude the cumulative effect of a change in accounting principle resulting from the adoption of FASB Statement 142.
For the first quarter of 2001, net income was $1.1 million and diluted earnings per share were $0.18. For cornparison purposes, net income for the first quarter of last year would have been $1.7 million or $0.29 per diluted share if goodwill amortization had been excluded consistent with FASB Statement 142.
After the cumulative effect of a change in accounting principle resulting from the adoption of FASB Statement 142, first quarter 2002 net income was $497,000, or $0.08 per share. This reflects a non-cash goodwill impairment loss from the write-off of $292,000 of goodwill associated with a non-U.S. subsidiary.
SPSS Inc., Chicago announced results for the first quarter 2002. On a pro forma basis, excluding acquisition-related and other non-recurring charges, and including the impact of the adoption of SFAS No. 142 (Goodwill and Other Intangible Assets), diluted eamings per share and revenues for the quarter ended March 31 were $0.00 and $49.4 million, respectively. These results compare to analyst expectations of earnings of between $0.03 and $0.08 and revenues of between $47.0 and $50.0 million. For the same period last year, pro fonna earnings per share and revenue were $0.05 and $44.1 million, respectively, and GAAPloss and revenues were ($0.77) and $36.5 million, respectively.
Revenues for the firm’s market research business were up 30 percent from pro forma market research revenues in the first quarter 2001 due to $1.7 million of AOL-related revenues; they were otherwise up 4 percent, reflecting the continued difficult climate for completing high-ticket sales to information technology departments in market research firms. The Online (AOL) business continued to draw most of its revenue in the quarter from the customer base inherited from AOL/DMS, but the pipeline of new prospects grew from December 2001 despite price pressure from new competitors.
For the quarter ended March 31,2002, Chicago-based Information Resources, Inc. (IRI) reported net income, before restructuring and other items, of $1.0 million or $0.03 per share compared to previous guidance for the quarter of $0.01 per share and to break even net income for the first quarter of 2001. Including the impact of restructuring and other items, IRI reported a net loss of $2.3 million or ($0.08) per share compared to a net loss of $2.5 million, or ($0.09) per share for last year’s first quarter.
Revenues of $133.1 million were 2 percent lower than the first quarter of 2001. U.S. revenues were $100.0 million, a decrease of 3 percent versus prior year. While revenue from lRI’s Retail Tracking business was down for the quarter, its Panel andAnalytics business posted 5 percent growth over the same period last year. International revenues of $33.1 million were essentially unchanged from last year in U.S. dollars, but 4 percent higher in local currencies. Operating income before restructuring and other items was $2.2 million compared to $1.5 million in the first quarter of 2001. U.S. and corporate expense savings offset the decline in U.S. revenues resulting in a slight improvement in overall operating results.
News spotlight
British research industry weathers downturn
The latest figures on the U.K. market research industry, released by the British Market Research Association (BMRA), show that the industry is riding out the recent economic downturn better than other sectors.
The industry is now worth £1.15 billion, and the revenues of BMRA-member companies grew by 7.1 percent in 2001, up from £1.07 billion in 2000. Although this increase is smaller than the 9.3 percent growth posted the year before, it still outstrips inflation. And other elements of the marketing mix, such as advertising, have had one of their worst years for a long time as expenditure has dried up.
Revenues of the 10 largest companies, which represent 74 percent of sales, grew by 6.5 percent. Domestic U.K. sales grew by 7.4 percent, a slightly higher rate than that for international sales, which increased by 6.3 percent.
The U.K. industry slowdown is reflected in Europe, where European countries reported lower growth in 2001 than in 2000. It is anticipated that, Europe-wide, 2002 will post only a 2 percent to 3 percent growth rate in research sales.
“The industry overall is showing the kind of growth we would expect, and in fact is showing better returns than other marketing disciplines, such as advertising, which has been one of the worst hit industries in the downturn,” says Ivor Stocker, BMRA chairman.
“In the current climate, we need to exercise caution where forecasting is concerned. Prospects are somewhat tight, particularly compared to one year ago. However, we can sound a note of cautious confidence and optimism, as we expect to benefit from the progressive renewal in business confidence, both here in Europe and in the USA.”