News notes
The Yale School of Management has opened a new research center devoted to the behavior of customers. The Yale Center for Customer Insights (YCCI) will bring together industry leaders and scholars from multiple disciplines to focus on joint research relevant to the marketplace. Ravi Dhar, professor of marketing at Yale SOM and professor of psychology at Yale University and Dick R. Wittink, the George Rogers Clark Professor of Management and Marketing at Yale SOM and editor of the Journal of Marketing Research, will co-direct the new center. William Pace, CEO of consulting firm Kurt Salmon Associates, has been named chair of the YCCI advisory board. Other board members include: David Daniel, CEO of Spencer Stuart; James A. Firestone, president, Xerox North America, and senior vice president, Xerox Corporation; Thomas E. Gage, founding contributor to the YCCI and senior vice president and general manager, Verisign Communications; John L. Lindsey, president, Thomas Publishing International; Tim Love, president, global clients and co-chairman of G1 Worldwide, TBWA World; Anil Menon, vice president, marketing strategy and worldwide marketing management, IBM; and Laura R. Walker, president and CEO, WNYC Radio.
The Dallas-based Mystery Shopping Providers Association (MSPA) announced it now has 25,000 silver- and gold-certified mystery shoppers. The MSPA initiated the certification in November 2002. A shopper can become silver-certified by taking a short online course at the MSPA Web site. After obtaining silver certification, mystery shoppers can achieve gold certification by attending a gold certification workshop, a one-day seminar held in various cities throughout the United States each year. At the conclusion of the seminar, a test is administered, and those shoppers who pass the test are awarded gold certification. The MSPA estimates there are approximately 1.5 million mystery shoppers in the United States and 250,000 internationally. Currently, there are more than 23,000 silver-certified shoppers and more than 2,000 gold-certified shoppers.
Acquisitions/transactions
Germany-based GfK Group has sold its 50 percent participation in IHA-IMS Health, Switzerland, to IMS Health. The positive net effect for the income from participations of GfK Group in 2005 will amount to approximately EUR 22 million. GfK has also acquired the remaining 20 percent which IMS Health held in GPI Kommunikationsforschung, Germany. IHA-IMS Health provides services to the health care industry in the areas of market research, sales research and customer relationship management. It has a staff of 70. GPI Kommunikationsforschung, now a 100-percent GfK subsidiary, covers two business areas: communication research and self-medication.
Separately, GfK has added Beyen Marktforschung GmbH to its retail and technology division. Based in Düsseldorf, Beyen Marktforschung GmbH conducts pricing research.
Also, GfK Group and Chicago-based Information Resources Inc. (IRI) signed agreements on the basis of which GfK will transfer its shares in the German and Dutch subsidiaries of Information Resources to the parent company and acquire the shares in GfK Panelservices Benelux held by the Information Resources, Inc.
In recent years, the GfK Group has gradually reduced its involvement in its joint ventures with IRI. The move was based on a management board resolution to focus on GfK’s core competence in FMCG market research and therefore concentrate on panel research involving end user households. Prior to signing the agreements, GfK held 19.9 percent of the shares in Information Resources GfK in the Netherlands and 17.7 percent in Information Resources GfK in Germany. The two companies will be wholly owned by IRI.
In other news, GfK has taken over the remaining 7.6 percent stake in GfK Panelservices Benelux, Netherlands, which is now wholly owned by GfK.
Stamford, Conn., research firms Gartner, Inc. and META Group, Inc. have reached an agreement under which Gartner will acquire META Group in an all-cash transaction valued at $10 per share, or approximately $162 million. The boards of directors of both companies have unanimously approved the agreement.
In 2003, Gartner generated $858 million in revenue from 76 locations around the world, while META Group generated $122 million in revenue from 52 locations. Gartner intends to finance the acquisition through the use of current cash, as well as borrowings under the company’s existing line of credit. The transaction is subject to customary closing conditions, including regulatory approvals, and approval by META Group’s stockholders. The transaction is expected to close in the second quarter of 2005.
Bacon’s Information, Inc. has acquired Delahaye Medialink, a public relations-focused media evaluation and consulting services firm with offices in Norwalk, Conn., Portsmouth, N.H., Washington, D.C., and London. Delahaye, with annual revenue of $9 million, will be acquired from its parent Medialink Worldwide Incorporated.
Informa Research Services, Inc., Calabasas, Calif., has acquired Moorthy, Riggs and Associates, Inc., a Tiburon, Calif., research firm serving the financial industry.
Atlanta loyalty marketing firm Vesdia Corporation has acquired rights to a family of patents held by Source, Inc., Newhall, Calif. Key among the inventions is a U.S. Patent entitled “Centralized consumer cash value accumulation system for multiple merchants,” which includes 21 claims on methods and systems related to retail point-of-sale transactions. Combined, the group of patents provides specific coverage for several inventions related to the electronic tracking of shopping transactions for the purpose of providing consumers rebates from multiple retailers.
Association/organization news
The Marketing Research Association (MRA) is currently seeking individuals from across the profession to participate in various committees associated with its Professional Researcher Certification program. The committees are open to individuals based upon their knowledge, skills and backgrounds and are not limited to MRA members. Chair of the certification workgroup is Joan Burns, corporate marketing specialist for Teradyne. There are three subcommittees within the workgroup: the certification development committee, chaired by Ken Roberts, president of Cooper Roberts Research, Inc.; the certification review committee, chaired by Rich Boone, senior director of consumer research for E & J Gallo Winery; and the certification ethics committee, chaired by Don Marek, former executive director of customer service quality for SBC. Readers interested in participating can contact Linda Schoenborn or Elyse Gammer at 860-257-4008 or at linda.schoenborn@mra-net.org or at elyse.gammer@mra-net.org.
The Council for Marketing and Opinion Research (CMOR) has retained PR firm KCSA Worldwide to help raise awareness of the importance of consumer participation in legitimate market and opinion research. Henry Feintuch, managing partner, and Yin Chang, managing director of KCSA’s global technology and business-to-business practice, will manage the CMOR public relations program.
Awards/rankings
Arbitron Inc., New York, was named to Fortune’s “100 Best Companies to Work For” list in 2005. Recognized for the third time as a top employer, the company was ranked number 60 in the business magazine’s annual listing and was selected from a pool of approximately 1,000 companies.
Millward Brown Australia was recognized for its excellence in client service at the 2004 Walker Information Annual Conference. The company was awarded an honorable mention for its results in the annual international stakeholder client relationship survey.
Separately, Millward Brown has been awarded a prize for being the best market research company in Mexico. The “Trofeo a lo mejor de 2004” was awarded to Millward Brown Mexico by marketing magazine Merca2.0.
New accounts/projects
U.K-based oil company Total UK has retained research firm ESA to conduct its national mystery shopping campaign for the eighth consecutive year. The contract will run for the duration of 2005 and will involve regular visits by ESA’s mystery shoppers to Total’s nationwide network of forecourts.
Greenfield Online, Inc., Wilton, Conn., announced that GfK Arbor, LLC has signed a new agreement appointing Greenfield Online as its exclusive supplier of full-service Internet survey research services and sample research data, subject to certain limited exceptions. The companies have worked together since 2002. The agreement with GfK Arbor has an initial term ending on December 31, 2005 and it will automatically renew for successive one-year periods unless cancelled by either party prior to the expiration of each term. During the term, Greenfield Online will provide GfK Arbor with Internet-based survey services, which include the programming and hosting of surveys, as well as survey respondents for sample research from its panel of 3.4 million survey takers. Greenfield Online will also provide marketing support services to GfK Arbor.
New companies/new divisions/ relocations/expansions
FocusVision Worldwide has opened a new office at 16133 Ventura Blvd., Suite 650, Encino, Calif., 91436. It will provide sales, technical and project coordination services. Staffing will include two employees who will relocate to the new office: Michael Brooks, sales manager – West region; and Judith Kaufman, business development analyst.
Millward Brown has debuted Millward Brown Optimor, its global brand investment unit, and tapped senior vice presidents Marco Forato and Nikhil Gharekhan to work with the current Millward Brown team to help take the initiative forward.
Research firm TNS has created a single technology sector which will merge its existing telecom and IT research divisions. The newly-created sector will be headed by Tacis Gavoyannis.
J.D. Power and Associates, Westlake Village, Calif., has expanded its operations in China, opening a new office in Shanghai at 3515, CITIC Square, 1168 Nanjing West Road. John Humphrey, partner at J.D. Power and Associates, has been named senior vice president of international operations and managing director of the new Shanghai office.
Company earnings reports
Firm, an Oslo-based research software firm, reported $13.3 million in revenue for 2004, an increase of 37 percent from $9.7 million in 2003. Firm’s EBITDA result was $1.2 million in 2004, compared with $67,000 in 2003. Firm continues its positive development from 2003, when the growth was 40 percent compared with the previous year. In Q4 of 2004, EBITDA was $1.2 million compared with $0.4 million in Q4 of 2003. Revenue in Q4 of 2004 was $4.8 million compared with $3.5 in Q4 of 2003. Revenue outside Scandinavia increased from 83 percent in 2003 to 86 percent in 2004. This trend is expected to continue in 2005.
Arbitron Inc., New York, reported fourth-quarter 2004 revenue of $72.9 million, an increase of 11.4 percent over revenue of $65.4 million during the fourth quarter of 2003. Costs and expenses for the fourth quarter increased by 13.9 percent, from $54.5 million in 2003 to $62.1 million in 2004. Earnings before interest and income tax expense for the quarter were $16.9 million, compared with EBIT of $16.1 million during the comparable period last year. Interest expense for the quarter declined 35.1 percent, from $2.6 million in 2003 to $1.7 million in 2004, due to reductions in the company’s long-term debt.
Net income for the quarter was $9.6 million, compared with $8.7 million for the fourth quarter of 2003. Net income per share for the fourth quarter 2004 increased to $0.31 (diluted), compared with $0.28 (diluted) during the comparable period last year.
For the year ended December 31, 2004, revenue was $296.6 million, an increase of 8.4 percent over revenue of $273.6 million for 2003. EBIT for 2004 increased 6.2 percent to $98.4 million compared with $92.7 million in 2003. Net income for 2004 increased 21.4 percent to $60.6 million compared with $49.9 million in 2003. Net income per share (diluted) in 2004 was $1.92 per share (diluted), compared with $1.63 per share (diluted) last year.
The effective tax rate of 33.9 percent was lower in 2004 than the effective tax rate of 38.5 percent in 2003 because certain reserves for tax contingencies were reversed in the third quarter of 2004 due to guidance in an IRS notice. Also in the third quarter of 2004, the valuation allowance on the deferred tax assets related to state net operating loss carryforwards was reduced due to higher actual and projected taxable income in the applicable states. The net benefit of these changes was $4.2 million or $0.13 per diluted share in 2004.
Opinion Research Corporation, Princeton, N.J., announced that 2004 revenues are expected to be within the previously issued revenue guidance of $194 to $196 million but that it was reducing its 2004 net income guidance from $3.0 to $3.2 million or $0.46 to $0.50 per diluted share to $1.9 to $2.1 million or $0.29 to $0.32 per diluted share. These results include a second quarter 2004 refinancing-related charge which reduced net income by $1.6 million and diluted earnings per share by $0.26.
This revised guidance will result in a continuation of the positive trends in revenues and earnings reported in the prior quarters of 2004. The reduced guidance for 2004 is primarily the result of cost increases on certain contracts in the U.S. market research segment, as well as lower revenues and earnings in the teleservices segment, where demand in the fourth quarter was below expectations and historical fourth quarter levels.