News notes

Information and media firm VNU confirmed that in early March one of its offices and five of its subsidiary ACNielsen Company’s offices in Europe were visited by officials of the European Commission, Directorate General for Competition, with requests for information. Based on a complaint by ACNielsen competitor Information Resources, Inc. (IRI), Chicago, the commission sought documents concerning ACNielsen’s contracting and pricing practices in Europe. In a press statement VNU said it is cooperating fully with the commission and is confident that its practices fully comply with European law. IRI’s U.S. antitrust lawsuit against ACNielsen was dismissed in February 2005 for failure of proof by the U.S. District Court for the Southern District of New York.

Figures released by the British Market Research Association (BMRA) reveal that overall U.K. market research industry revenues grew by 5.4 percent in 2004 to a value of £1.29 billion ($2.45 billion), delivering growth significantly above inflation after two nearly flat years. (The industry size estimate is based on returns from BMRA members accounting for around two-thirds of the total sales of the association’s member firms. Due to restrictions under U.S. Sarbanes-Oxley legislation, WPP companies [BMRB, Millward Brown and Research International] are not permitted to submit returns of unaudited 2004 results. BMRA, however, included them in the total industry estimates by applying growth at the average rate of the reporting members.)

The overall result marks a sharp difference between the performance of U.K.-based market research companies in domestic and international markets. The domestic sector, which makes up 73 percent of the market, grew by 3 percent on the previous year - just above the rate of inflation. By contrast, the international sector, which makes up 27 percent of the market, grew by 12.8 percent on 2003, delivering strong recovery after the previous year of decline.

The results indicate the continued support for market research by U.K. businesses and organizations. The market research agencies’ performance suggests that the medium-sized and smaller companies have taken greatest advantage of the favorable economic conditions to increase their share of the market. On average, BMRA-member companies with 2004 sales of less than £10m grew by 11 percent over 2003, while those with sales in excess of £10m in 2004 delivered year-on-year growth of only 4 percent.

“We believe the overall performance reflects confidence and strength in the U.K. economy in general,” says Ivor Stocker, chairman of BMRA. “At the same time, the relative strength of continental European markets and the euro’s performance against the pound may have given a boost to research budgets and commissions from outside the U.K.

“Looking forward, as long as the global economy doesn’t lose its nerve, there is every reason to expect the international market to hold up. However, we are unlikely to return to double-digit growth for the whole industry in the foreseeable future, simply because the 2004 result reflects recovery from a weak 2003 position. The performance of the domestic market is less easy to predict in advance of the outcome of the 2005 general election but nonetheless things look bright, as we anticipate continued growth above inflation.”

Acquisitions/transactions

Germany-based GfK has acquired market research company NOP World from the British media group United Business Media for approximately $728.5 million in cash. With over 1,500 employees, NOP World achieved sales totaling $416 million and an operating profit of $46 million in 2004.

Greenfield Online, Inc., Wilton, Conn., has completed the acquisition of Munich-based Ciao AG for aggregate consideration valued at approximately $154 million. The consideration for the acquisition consists of EUR 57,692,250 in cash and 3,947,367 shares of Greenfield Online common stock valued at $20.19 per share (the closing price of the Greenfield common stock on Nasdaq on April 6, 2005). The amount of consideration is subject to certain post-closing adjustments. The acquisition is expected to be accretive to 2005 and future years’ earnings per share.

Ciao AG was founded in 1999. The company has 150 employees across six European offices in Munich, London, Paris, Madrid, Amsterdam and Timisoara, Romania, as well as a small office with five employees in the U.S.

For 2004, Ciao AG recorded revenue of approximately EUR 18.1 million ($22.5 million) with growth of approximately 78 percent over 2003. Ciao AG recorded 2004 operating income of approximately EUR 6.9 million ($8.6 million) representing growth of 100 percent over 2003 and EBITDA of EUR 7.3 million ($9.1 million) representing growth of 91 percent over 2003. These figures were computed based on German GAAP and reconciled to U.S. GAAP.

Ciao AG has created an interactive community in Europe with participants engaged in taking surveys, writing product reviews and giving their opinions.

Ciao AG’s Munich headquarters will serve as Greenfield Online’s new European headquarters. Ciao AG’s four managing directors will join Greenfield Online in management roles. Maximillian Ulrich Cartellieri, Ciao AG’s co-founder and co-CEO, becomes Greenfield Online’s executive vice president of integration. Frederick Paul, Ciao AG’s co-founder and co-CEO, becomes Greenfield Online’s executive vice president of online communities. Gunnar Piening, Ciao AG’s managing director of online surveys, becomes Greenfield Online’s senior vice president European sales and operations. Nicolas Metzke, managing director, Ciao AG France, who is responsible for panel development and support, becomes Greenfield Online’s senior vice president European panel.

As a result of the transaction and issuance of the associated 3,947,367 shares of Greenfield Online common stock, Ciao AG shareholders in aggregate will own approximately 15 percent of Greenfield’s total outstanding common stock. Included in that group are Ciao AG’s four managing directors. Cartellieri and Paul received 250,000 and 200,000 shares, respectively, of Greenfield Online common stock as part of the transaction. Piening and Metzke each received 45,000 shares. The shares issued in the transaction were not registered and, accordingly, are “restricted securities” under the U.S. federal securities laws. Holders may resell the restricted securities only pursuant to a valid registration statement under the Securities Act of 1933 or an exemption from the requirements of such act.

Laurie S. Donnell has purchased and taken over Research Systems, a Minnetonka, Minn., market research firm. Donnell will continue operating the company under the Research Systems name and will expand the scope of business applications to include programs in small-business financial consulting, strategic planning, sales enhancement and human capital application services.

Harris Interactive, Rochester, N.Y., has added Market Team, a Bogotá, Colombia, market research and retail audit firm, to its Global Network. Market Team, established in 1994, conducts research in its home country, as well as in Ecuador, Central America and the Caribbean region.

Two former executives of Data Development Corp., Chip Lister and Kim Knepper, have purchased the New York research firm and changed its name to Data Development Worldwide.

Chicago research firm IRI has acquired the outstanding ownership of Mosaic InfoForce, L.P. (MIF). MIF, a joint venture between IRI and the Mosaic Group, Inc., is a provider of in-store data collection and retail audit services which collects information on in-store conditions.

Synovate has acquired Columbus Quanti, a Belgium-based research business. Columbus Quanti is a medium-sized research agency with offices in Ghent, employing around 40 staff. The company serves the telecom, FMCG, finance and public utility sectors.

Consumer Health Sciences, a health information and market research company, has become a separate operating division of New York research firm the Ziment Group as part of Grey Global Group’s recent purchase by WPP. Formerly part of Grey Healthcare, CHS will form a new division within the Ziment Group. The company will continue to operate from Princeton, N.J.

Leger Marketing, a Montreal-based research firm, has acquired Criterion Research Corp., in Edmonton. Maureen McCaw, owner of Criterion Research Corp., the company she founded 20 years ago, will become president of Leger Marketing Alberta. Tammy Fallowfield will continue as general manager.

Chicago private equity fund Hispania Capital Partners has acquired a controlling interest in Eastern Research Services, Inc., a Springfield, Pa., research firm. Kean Spencer will remain as president and Nicholas Mannino will remain as CEO.

Alliances/strategic partnerships

Arbitron Inc., New York, has reached an agreement with VNU to deploy, by year-end 2005, a pilot panel of more than 6,000 U.S. households as a demonstration of the Project Apollo national marketing research service. The pilot panel for the national marketing research service will consist of approximately 14,500 participants in 6,250 households, providing multimedia exposure and purchase information from a common sample of consumers.

These individuals will be incented to voluntarily carry Arbitron’s Portable People Meter, a device that collects the volunteers’ exposure to electronic media sources. Consumer exposure to other media such as newspapers, magazines and circulars would also be collected through additional survey instruments.

GroupNet, a network of independently-owned focus group facilities, has added two new members: Meadowlands Consumer Center, Secaucus, N.J.; and Galloway Research, San Antonio.

Association/organization news

The Advertising Research Foundation (ARF) has appointed four new members to its board of directors: Steven Fredericks, president and CEO, TNS Media Intelligence; Stephen Kim, director of media research, MSN; Brian McAndrews, president and CEO, aQuantive; and Jessica Pantanini, COO, Bromley Communications.

In April, the ARF announced the winners of its annual David Ogilvy Awards for Excellence in Advertising Research. Awards are presented based on case history submissions of research initiatives that were instrumental in steering winning advertising campaigns. The Grand Award winner was Lexus, for its “Waking Up the Auto Industry to its Third Category” campaign. Accepting for the research team were Meija Jacobs, associate director, account planning, Team One Advertising, and Vicki Wagner, management supervisor, Team One Advertising.

New accounts/projects

TV One, a new entertainment and lifestyle channel targeting African-Americans, has renewed its contract with Scarborough Research, New York. Under the agreement, Scarborough will provide TV One with access to Scarborough USA+ (Release 1 and Release 2 2004) as well as the company’s 75 Local Market Databases (Release 2 2004 and Release 1 2005). TV One intends to use the data to educate its customers about the demographics, consumer habits, spending power and leisure preferences of its African-American audience.

Nashville-based 20/20 Research, Inc., has added Creative Fuel, online research service E-Poll, and European market research firms Direct Dialogue and NOP World-UK to its list of online software subscribers.

Opinion Research Corporation Princeton, N.J., will use SPSS’ survey research platform Dimensions to conduct projects for its commercial and public policy research clients.

Simmons, a Deerfield Beach, Fla., research company, has signed a long-term contract to provide the Golf Channel with access to consumer data from its national consumer study.

London research firm TNS has announced an agreement of intent with the Norwegian National Radio’s Steering Committee representing NRK, P4, Kanal 24, Radio 1, Nordic Web Radio and the Association of Local Radio Companies, to launch a Portable People Meter panel of 200 individuals. Plans to expand the panel to up to 400 people are also under consideration for early 2006.

New companies/new divisions/relocations/expansions

Decision Analyst, Arlington, Texas, has formed a new syndicated research group and named Diane Brewton as its director. Decision Analyst’s syndicated research projects will utilize its American Consumer Opinion Panel. New efforts include studies in the health and wellness, baby product, personal care and pet product arenas.

A&G Research, Inc., has moved to 10 Paragon Dr., Montvale, N.J., 07645-1760. Phone 201-326-0320. Fax 201-307-8899.

Lightspeed Research, Basking Ridge, N.J., has opened a new office on Avenue George V in Paris.

Company earnings reports

In financial results for the first quarter ended March 31, 2005, Opinion Research Corporation, Princeton, N.J., reported revenues of $48.9 million versus $48.0 million in the prior year’s first quarter. Social research revenues were up over 9 percent to $33.9 million versus $30.9 million in last year’s first quarter. Market research revenues totaled $13.0 million versus $13.4 million in the prior year’s first quarter. Teleservices revenues were $2.1 million versus $3.6 million in last year’s first quarter.

Net income for the quarter was $142,000, or $0.02 per diluted share, versus net income of $938,000, or $0.15 per diluted share, in last year’s first quarter. Net income for the first quarter was impacted by $776,000, or $0.12 per diluted share, net of tax benefits, for previously announced refinancing charges.

For the quarter ended March 31, 2005, Arbitron Inc., New York, reported revenue of $79.2 million, an increase of 3.4 percent over revenue of $76.6 million during the first quarter of 2004. Costs and expenses for the first quarter increased by 2.4 percent, from $43.4 million in 2004 to $44.4 million in 2005. Earnings before interest and income tax expense (EBIT) for the quarter were $32.7 million, an increase of 2.5 percent over EBIT of $31.9 million during the comparable period last year. Interest expense for the quarter declined 56.7 percent, from $2.4 million in 2004 to $1.1 million in 2005, due to reductions in the company’s long-term debt.

Net income for the quarter was $19.8 million, an increase of 9.6 percent over $18.1 million for the first quarter of 2004. Net income per share for the first quarter of 2005 increased to $0.63 (diluted), compared with $0.57 (diluted) during the comparable period last year, an increase of 10.5 percent.