News Notes
In March, Kansas City, Mo., research company Decision Insight celebrated its 25th anniversary.
Dallas research company e-Rewards has made a $50,000 donation to the Marketing Research Association Education Endowment Fund to support scholarships for market research. The donation has been made in partnership with more than 450 of e-Rewards’ market research clients.
An antitrust lawsuit dating back to 2005 between St. Petersburg, Fla., research and ratings company erinMedia and New York-based Nielsen Media Research (NMR) has ended with the dismissal of all claims “with prejudice” and both sides agreeing to a settlement for an undisclosed amount. The lawsuit began when erinMedia owner Frank Maggio launched his bid to end NMR’s TV ratings monopoly, claiming NMR’s long-term staggered contracts with major broadcasters made it “effectively impossible” to set up a competing TV audience measurement tool.
A lawsuit filed against Swiss research company AGB Nielsen over the alleged bribery of TV ratings panelists has been thrown out by a court in the Philippines. Broadcaster ABS-CBN filed the suit in December 2007 following claims that a rival broadcaster, GMA network, had been bribing AGB Nielsen’s panelists in the city of Bacolod in an attempt to boost their audience share. The judge said that the suit for a total of 81 million pesos was prematurely filed, as the contract between AGB Nielsen and ABS-CBN gives the ratings provider 30 days to look into any data problems and three months to rectify them. According to a statement made by AGB Nielsen, “There is still no evidence that the broadcaster contact with panel homes has had any impact on audience viewing behavior or share.” ABS-CBN is appealing the decision to throw out its lawsuit.
Westlake Village, Calif., marketing services company ValueClick Inc. has come to a settlement with the Federal Trade Commission (FTC) regarding the ValueClick’s lead-generation practices. The FTC alleged that ValueClick utilized deceptive marketing practices that violated the CAN-SPAM Act and FTC Act. In an effort to resolve this matter, ValueClick agreed to a settlement payment of $2.9 million without an admission of liability or conceding that the company had violated any laws. In addition, ValueClick and the FTC have agreed on the standards that will govern its lead generation business.
Wilton, Conn., research company Greenfield Online Inc. has updated its cost estimates for legal, accounting and other fees and costs related to its defense of the class-action lawsuit pending against the company to $3 million to $3.5 million. The lawsuit was brought by former employees of Greenfield Online who have claimed the company was losing more panelists than it was obtaining and misrepresenting the actual number of panelists it had back in 2005, which led to problems with sampling, respondent targeting and project timing.
Goliath Solutions LLC, a Deerfield, Ill., marketing intelligence company has completed a $27 million financing led by two private equity firms, Cordjia and The Walnut Group, to further the expansion of Goliath’s proprietary solution to maximize retailer returns from in-store advertising and merchandising. Other investors include CapX Partners, Trinity Capital Investments and Comerica Bank. Goliath will use the funding to fulfill its contract with Walgreens.
London research company WPP ’s digital investment arm, WPP Digital, has acquired a minority stake in China-based media advertising and technology company HDT Holdings Technologies Inc.
Acquisitions/transactions
Edison, N.J., research company Schlesinger Associates has acquired Interactive Video Production (IVP), the Southampton, Pa., digital advertising firm and owner of mobiLAB usability testing lab services.
Houston consulting firm Decision Strategies has acquired market research company RMI, which is also based in Houston and focuses on the oil and gas industry. The acquisition is set to be complete by mid-year 2008.
In the U.K., research company Mintel has bought Snapshots International, a London-based publisher of global market reports. Mintel will run the Snapshots business as a separate company within the Mintel Group from its London offices. Terms were not disclosed.
Ottawa-based In-Touch Survey Systems has acquired MarketLine Research Inc., Minneapolis, which is a supplier of the MarketVU CATI analysis system. MarketLine will be acquired for cash from In-Touch’s own funds and a promissory note payable over five years.
Westlake Village, Calif., automotive researcher J.D. Power and Associates has acquired Boulder, Colo., marketing intelligence company Umbria Inc. Terms were not disclosed.
New York researcher The Nielsen Company has signed a definitive agreement to acquire New York-based IAG Research Inc. for a purchase price of $225 million. The acquisition will be effected through a merger of IAG with a wholly-owned subsidiary of Nielsen in which IAG stockholders will receive cash for their IAG shares. The executive team of IAG has agreed to join Nielsen following the merger.
Nuremberg, Germany, research company GfK Group has acquired Turkish market research company Bilesim International, along with the remaining 34 percent of shares in Swiss company GfK Research Matters. In the retail and technology sector, GfK has taken over Brazilian market research institute, Shopping Brasil, and the watch panel of French market research company, Société V.
San Francisco research company MarketTools Inc., has acquired Mountain View, Calif., research company CustomerSat Inc. CustomerSat chairman and CEO John Chisholm has been named MarketTools’ executive vice president and general manager of the CustomerSat business unit.
Rochester, N.Y. research company Harris Interactive has bought U.K.-based Canvasse Opinion panel, previously operated by Experian, for an undisclosed amount. The online consumer research panel has around 200,000 members, who will be added to the Harris Poll online panel.
London communications group Chime has bought a stake in ethnographic research agency Naked Eye, also based in the U.K., which will become part of Chime’s research and engagement division. The Naked Eye team will leave their Twickenham base to move in with Chime’s research agency Opinion Leader and luxury brands specialist Ledbury Research in Holborn.
El Segundo, Calif., research company iSuppli has acquired Munich, Germany, research company Wicht Technologie Consulting (WTC). WTC also brings to iSuppli expertise in the area of MEMS and sensors.
Alliances/strategic partnerships
Naperville, Ill., research company Millward Brown has expanded its presence in Europe and South America. Millward Brown partnered with Helsinki, Finland, research agency Kuulas, which will operate as a Millward Brown licensee. Kuulas Millward Brown will offer qualitative and quantitative solutions to clients in Finland and the Baltics.
Additionally, Millward Brown has partnered its Millward Brown Optimor unit and Brazilian research company Brand Analytics. Like Millward Brown Optimor, Brand Analytics focuses on linking brand metrics to financials in order to maximize shareholder value creation through brand management. Brand consultancy firm Brand Value Advisors has also joined Millward Brown Optimor.
Chicago research company Information Resources Inc. (IRI), and the London-based Europanel Association have joined forces to form a single-panel research service. This relationship combines the IRI consumer network household panel in the United States with Europanel to form a global consumer network representing 600 million households in 54 countries.
PhoneBase Research Inc., Fort Collins, Colo., has partnered with a call center in Costa Rica. The partnership increases the company’s capacity for Spanish interviewing, allowing PhoneBase to meet the demand for Hispanic research. The Costa Rican facility will operate under the close supervision of PhoneBase staff and in compliance with the ethical standards of the industry, including guidelines set by the MRA, AMA and CASRO.
GfK Roper Public Affairs & Media, a New York-based division of GfK Custom Research North America, has partnered with government advisor and author Simon Anholt to provide an expanded Nation Brands Index. The annual index is based on the perceptions of more than 20,000 people across the globe, ranking nations by measuring the power and quality of each country’s brand image by combining the following six dimensions: exports, governance, culture and heritage, people, tourism, and investment and immigration.
London ethnic research firm Ethnos has formed a partnership with digital entertainment company Huge Entertainment. Dubbed Ethnos@Huge, the partnership is a step toward Huge’s strategy to provide on-demand entertainment specifically targeting ethnic communities.
New York researcher The Nielsen Company has partnered with India’s Tata Consulting Services to help meet Nielsen’s outsourcing needs.
Awards/rankings
San Francisco research company Peanut Labs Inc.’s COO Ali A. Moiz has been selected by the Advertising Research Foundation (ARF) as a winner of the 2008 ARF Great Mind Awards. Moiz was honored with the silver award in the “Innovation” category.
London research group BrainJuicer Group PLC ’s CEO John Kearon has been awarded the gold prize as research innovator of the year by the Advertising Research Foundation (ARF), revealed at the ARF’s annual convention and expo, Re:Think 2008.
Rochester, N.Y., research company Harris Interactive has received an Advertising Research Foundation David Ogilvy Research Award.
New accounts/projects
TNS media research, the New York division of TNS media, has signed an agreement with Chicago communications company Starcom USA to utilize the DIRECTView service. This agreement furthers Starcom’s involvement with TNS media research to better understand the viewing habits of digital consumers, which began in November 2006.
Research facility alliance Focus Coast to Coast has a new member: New York research company Focus Suites. Focus Coast to Coast has participating facilities in Atlanta, Boston, Fort Lauderdale, Fla., Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco and Tampa, Fla.
New York research company Arbitron Inc. has announced that Ontario, Canada, media company CTVglobemedia has signed a multiyear contract for Arbitron’s Portable People Meter radio ratings services for CHUM Radio in Detroit. This agreement will take effect as and when Arbitron commercializes the new audience ratings technology in Detroit.
U.K.-based service consultancy Serco Solutions has successfully implemented Oslo, Norway, research company Confirmit ’s enterprise feedback management system.
Dallas research company e-Rewards has announced Pizza Hut as the latest sponsor of its youth opinion panel, u.talk.back. Pizza Hut will be inviting select customers to join the u.talk.back opinion panel.
New companies/new divisions/ relocations/expansions
Livra Panels, a Buenos Aires, Argentina, research company, has opened an office in Sao Paulo, Brazil. In order to support this move, Livra Panels has appointed Joana Lacerda as regional director for Latin America.
Omaha, Neb., research company infoUSA has made plans to expand outside the U.S. and will initially target China and India. InfoUSA will compile a telephone-verified database for these countries, which will service the demand for this type of information from businesses in the United States and abroad.
Scarborough Research, New York, has company announced it is evaluating the opportunity to expand its local market services. Presently, the company measures 81 U.S. DMAs through its top-tier service. Scarborough has added another 15 markets through a mid-tier study over the past two years.
London research company TNS has merged its North American and Latin American custom business to create one region to be called “The Americas.”
Lenexa, Kan., consulting company Food Business Resource has moved to a new 6,000-square-foot facility, which will better accommodate focus groups.
Company earnings reports
Nuremberg, Germany, research company the GfK Group enjoyed a record year in 2007 with consolidated income growth of 28.3 percent up to EUR 91.4 million, cash flow from operating activity up by more than 50 percent to EUR 168.1 million and a marked increase in dividend of 25.0 percent to EUR 0.45.
In 2007, GfK sales were up by EUR 49.9 million (+4.5 percent) to EUR 1,162.1 million. Adjusted operating income rose by 4.7 percent from EUR 150.5 million to EUR 157.6 million. The margin was up from 13.5 percent in the prior year to 13.6 percent.
Compared with the prior year, operating income rose by EUR 17.9 million (15.1 percent) to EUR 136.4 million. The personnel cost ratio, which expresses the ratio of personnel expenses to sales, remained virtually unchanged compared with the previous year at 40.0 percent.
In absolute terms, personnel expenses totaled EUR 465.2 million. Depreciation and amortization amounted to EUR 59.6 million after netting out against additions to fixed assets. The scheduled depreciation this includes, in particular, in relation to software and office equipment, fell slightly from EUR 45.5 million in 2006 to EUR 44.2 million in the year under review.
The GfK Group increased its EBIT by 14.3 percent from EUR 121.9 million in the prior year to EUR 139.4 million in 2007. Income from participations dropped back slightly from EUR 3.4 million the previous year to EUR 3.0 in 2007.
Other financial income amounted to EUR -22.3 million in the year under review. This equates to a significant improvement compared with the previous year’s level of EUR 28.4 million. This effect stems primarily from the lower interest expenses attributable to the reduction in financial liabilities coupled with positive income generated by financial instruments.
Overall, this led to a marked rise in income from current business activities, which was up by 25.2 percent from EUR 93.5 million to EUR 117.1 million in 2007.
The income tax ratio dropped again from its level the previous year of 23.8 percent to 21.9 percent. The GfK Group consequently increased its consolidated income by EUR 20.2 million from EUR 71.2 million in 2006 to EUR 91.4 million in 2007, which corresponds to a rise of 28.3 percent. EPS improved from EUR 1.86 in 2006 to EUR 2.33 in 2007.
In spite of the company expansion, the GfK Group’s total assets dropped back by EUR 25.4 million compared with 2006 to EUR 1,470.8 million. On the assets side of the balance sheet, the decline in non-current assets totaling EUR 32.5 million was due, in particular, to a currency-related reduction in goodwill, which is posted in U.S. dollars or pounds sterling, and the depreciation on intangible assets.
In 2007, the level of GfK investment totaled EUR 73.7 million. The major share of investments totaling EUR 49.2 million related to the purchase of software, office equipment and other tangibles, with EUR 22.8 million invested in the acquisition of consolidated companies and other business units.
The cash flow from current operating activities amounted to EUR 168.1 million, which fully financed current investments in maintenance and expansion. Although sales increased, working capital fell by EUR 12.8 million in 2007.
Taking into account investment in maintenance and replacements totaling EUR 49.2 million, the free cash flow generated amounted to EUR 118.9 million, which was used to finance acquisitions carried out in the year under review. The balance of cash flow was used to repay bank loans.
In 2007, GfK increased its sales in Germany by 7.7 percent to EUR 290.3 million. This corresponds to a quarter of the total sales recorded by the GfK Group. Sales growth was exclusively organic.
With sales totaling EUR 480.5 million, Western Europe/the Middle East/Africa is the best performing region of the GfK Group. Out of sales growth amounting to 5.0 percent, 4.5 percentage points were generated organically. Acquisitions added 1.1 percent to sales; however, currency effects reduced growth by 0.7 percentage points.
GfK increased its sales by 13.4 percent to EUR 73.1 million. Organic growth accounted for 12.4 percentage points and currency effects added a further 1.0 percentage points.
The accelerated weakening of the U.S. dollar reduced sales in the region by 8.2 percent, cutting the total sales by 6.5 percent from EUR 257.3 million to EUR 240.7 million. Organic growth accounted for 1.8 percent of sales. GfK is now ranked seventh of the top ten market research institutes in North America.
The distinguishing feature of the Latin American region was its growth. Compared with the previous year, the GfK Group recorded a 12.9 percent increase in sales in the region to EUR 26.7 million. With organic growth of 14.4 percentage points, GfK companies in this emerging region registered the second highest organic growth rates within the Group. Currency effects reduced sales by 1.5 percentage points.
With a rise of 28.4 percent from EUR 39.6 million in 2006 to EUR 50.8 million in financial year 2007, GfK recorded the highest percentage sales growth of all its regions in Asia and the Pacific. The majority of this, 15.9 percentage points, was of non-organic origins. At 17.9 percentage points, Asia and the Pacific also achieved the highest organic growth rate of the GfK Group. Currency effects reduced sales growth by 5.5 percentage points.
Oslo, Norway, research company Confirmit increased revenue in the first quarter of 2008 by 76 percent to $11.4 million. EBIT for the first quarter totaled $1.3 million, an increase of 111 percent compared to the corresponding quarter of 2007.
Revenue in the first quarter of 2008 amounted to $11.421 million, up 76 percent from $6.483 million in the first quarter of 2007.
Operating results (EBIT) for the first quarter of 2008 increased by 111 percent to $1.279 million compared to $605,000 in the corresponding quarter of 2007. The first quarter results represent an EBIT margin of 11 percent.
Profit before tax for the first quarter was $1.446 million compared to $682 thousand in the corresponding quarter of 2007.
Total assets were $41.3 million at the end of the first quarter of 2008. Total equity was $30.5 million, representing an equity ratio of 74 percent.
Fixed assets represented $18.9 million, of which intangible assets accounted for $5.8 million, goodwill was $9.2 million and deferred income tax assets were $2.5 million. Total current assets were $22.4 million. Cash and cash equivalents were $8.7 million.
Confirmit achieved positive cash flow from operations of $2.605 million in the first quarter of 2008, compared to $1.176 million in the corresponding quarter of 2007.
London research company Toluna has released results from the 2007 fiscal year. Revenue for the year grew 49 percent from £8.4 million to £12.5 million. Though the rate of growth slowed in the second half of the year, this followed a decision to focus on higher margin business.
Profit before tax rose 42 percent to £3.2 million, (£2.2 million in 2006). Earnings per share advanced 64 percent to 6.59 pence. Profit after tax has increased 64 percent to £2.4 million.
Operating cash flow improved to £3.6 million, and cash reserves at the end of the year had grown to £4.2 million.
New York researcher The Nielsen Company announced its financial results for the year ended December 31, 2007. Reported revenues for the full year were $4,707 million, an increase of 13 percent over the pro forma revenues of $4,174 million for the year ended December 31, 2006. Excluding the impact of currency fluctuations and deferred revenue adjustments, 2007 full year revenues increased 7 percent.
Reported operating income for the full year 2007 was $416 million compared to pro forma operating income of $227 million for the previous year. The full year 2007 and 2006 results were negatively impacted by $174 million and $218 million respectively for certain items such as restructuring costs, compensation agreements, deal costs and legal settlements. Adjusting for these items, pro forma operating income, on a constant currency basis, increased 27 percent.
Covenant EBITDA and other adjustments permitted under senior secured credit facilities was $1,304 million for the year ended December 31, 2007. Covenant EBITDA is a non–GAAP measure.
As of December 31, 2007, total debt was $8,250 million, and cash balances were $399 million. Capital expenditures were $266 million for the full year compared with $236 million for the 2006 fiscal year.
London researcher Cello Group PLC announced its preliminary audited results for the year ended December 31, 2007. Revenue rose 45 percent to £108.3 million. Operating income rose 46.4 percent to £56.8 million. Like-for-like operating income grew 16.1 percent with like-for-like operating profit growth of 7.1 percent.
Headline profit before tax rose 28.8 percent to £7.6 million. Basic headline earnings per share rose 19.8 percent to 15.06 pence. Headline operating cash flow conversion was strong at 97 percent.
The group reported a net debt of £5.8 million. Full year dividend was up 20 percent to 1.2 pence.
Fairfield, Conn., research company IMS Health reported 2008 first-quarter profit fell 31 percent on higher expenses. IMS earned $59.2 million, or 32 cents per share, compared with profit of $85.6 million, or 43 cents per share, for the same quarter in 2007. Revenue rose 13 percent to $574.2 million from $510.3 million.
The recent quarter included a $15.7 million provision for income taxes, compared with an income tax benefit of $23.8 million in the same quarter in 2007.
Excluding the tax benefits and foreign exchange hedge gains and losses, the company posted first-quarter profit of 37 cents per share, up from 35 cents per share a year prior.
Operating expenses rose 15 percent to $457.8 million from $399.3 million.