News notes
U.S. authorities have charged Chadwick Wilson Young with wire fraud, as reported by the Knoxville News Sentinel. Young is accused of defrauding his employer, Knoxville, Tenn., marketing research firm U30 Group Inc., of more than $1.1 million in roughly four years. Young worked as the interactive Internet group manager for U30 and set out to bilk U30 using a series of e-mail accounts that were supposed to belong to customers but instead were his. “He would use his position as an employee for the U30 Group Inc. to fraudulently obtain Amazon.com gift cards at U30 Group Inc. expense and send them to several e-mail accounts that he exercised control over,” according to Assistant U.S. Attorney Charles Atchley. “(Young) would then convert the gift cards to his own use by purchasing goods or convert them to cash by selling them to a third party.”
Dulles, Va., research company Vovici has closed a $10 million series B funding round. The round was led by Menlo Park, Calif., venture capital firm Mayfield Fund with participation from existing company investor Austin Ventures. The funding is intended to better Vovici’s position in the enterprise feedback management market.
Waltham, Mass., research company Invoke Solutions has received $7 million in funding led by Portland, Maine-based North Atlantic Capital and its existing investors Bain Capital and BEV Capital. The financing comes as Invoke launches its Engage Family of Research Solutions, and Invoke will use the funding to continue developing its enterprise feedback management platform and increase its delivery capabilities.
Peanut Labs, a San Francisco research firm, has received $3.2 million in a series A financing round. The funding is led by venture capital firms Leapfrog Ventures and BV Capital. The $3.2 million cash infusion will be used for continued product development towards Peanut Labs’ patent-pending market research sampling technology, which is designed to reach the 13- to 25-year-old demographic, known as Gen Y. The funding will also be used to service Peanut Labs’ list of market research clients and enhance the survey-taking experience.
New York research companies Arbitron Inc. and The Nielsen Company have terminated the development of Project Apollo, the proposed single-source, national research service based on Nielsen’s Homescan technology for measuring consumer purchase behavior, combined with Arbitron’s Portable People Meter system, measuring electronic media exposure. The two companies had been working on the pilot project since early in 2005. Susan D. Whiting, executive vice president of The Nielsen Company, and Steve Morris, chairman, president and CEO of Arbitron Inc., made the statement: “Despite a promising level of interest, we did not secure sufficient client commitments to make Project Apollo a sustainable venture for our two companies.”
The Media Rating Council (MRC), New York, has voted not to grant accreditation to New York research company Arbitron ’s Philadelphia and New York Portable People Meter Services (PPM) and has voted to conclude the 2007 independent external audits. A new audit will be required in 2008 for further consideration for accreditation. Arbitron has indicated that it plans to continue to participate in the MRC process, including completing for the 2008 audit efforts at the earliest possible time.
U.K. marketing services group Creston has closed its New York office at a cost of around £600,000, forcing U.S. CEO Steve Blamer to step down because of uncertain economic conditions. Creston has decided to transfer to its London head office the task of promoting its offering to American clients.
Kinesis Survey Technologies, Austin, Texas, has been awarded the U.S. trademark for CAMI in support of branding for its survey solution for computer-assisted mobile interviewing (CAMI). The Kinesis Survey CAMI survey solution combines an SMS Messenger with support for mobile browsers, allowing respondents to access and take surveys over the wireless Web. The Kinesis CAMI solution utilizes a worldwide device library for proper rendering of browser pages to ensure a satisfactory mobile browsing experience.
The Marketing Research Association, Glastonbury, Conn., has reported in its Research Industry Index that the domestic market research industry enjoyed a modest increase in the fourth quarter, according to December 2007 figures. The number of RFPs and proposals increased by 5 percent. The number of booked projects and revenue increased by 3 percent. Staffing levels increased by 2 percent. Operating margins remained stable. Distribution of business across companies shifted, as 45 percent saw an increase, 36 percent remained flat and 19 percent saw a decrease.
Acquisitions/transactions
Research Now, Toronto, has acquired Canadian data collection company OpenVenue. OpenVenue is now officially traded as Research Now. Service will be led by the same Toronto team.
London research company Synovate has acquired Peter Seagroatt & Associates (PS&A), a U.K. retail data analysis firm. PS&A will be integrated into Synovate Aztec, the company’s international retail information business.
Smith Travel Research (STR), Hendersonville, Tenn., and Boulder, Colo., research company RRC Associates have joined forces. STR’s acquisition of RRC extends the range of professional and strategic services it can offer. Both companies will continue to operate under their individual corporate identities and out of their respective locations. RRC is anticipated to gradually increase staffing within the Boulder office. Terms of the transaction were not disclosed.
Redmond, Wash., software company Microsoft has acquired Tel Aviv, Israel, marketing company YaData Ltd. The company will provide Microsoft with technologies for the online advertising market. YaData’s technology will enable Microsoft to provide its advertisers with targeting capabilities so they can connect with their audience and provide its customers more relevant and focused ads. The YaData team will join Microsoft’s Israel R&D center in Herzliya. YaData’s solutions will be deployed through Microsoft’s Advertiser and Publisher Solutions group.
Cambridge, England, advising firm for the telecommunications and digital media indstury Analysys Mason Group has acquired Redbox Consulting Services Limited, an England-based consultancy firm. The acquisition aids Analysys Mason in strengthening its position as strategic and operational adviser to its industry.
London research company TNS has acquired Compete Inc., a Boston digital intelligence company, for an initial cash consideration of $75 million. Dependent on the achievement of demanding revenue performance targets, deferred cash payments will be payable in 2008-2010, up to a maximum of $75 million. TNS will apply Compete’s ability to profile, measure and segment the online behavior of consumers to its own 6th dimension access panels; this will start in the U.S.
U.K. research firm BSRIA has acquired Proplan, a U.K.-based research company that specializes in the building environmental controls, fire protection and security sector. All reports written by the Proplan team are still available and may be obtained from BSRIA, under the BSRIA Proplan brand, and new reports will be developed by the new, larger team of market researchers.
Decision Resources Inc., a Waltham, Mass., pharmaceutical research company, has acquired Fingertip Formulary, a Glen Rock, N.J., data firm. The acquisition is part of a growth strategy by Decision Resources Inc. that will allow for cross-business unit opportunities. Its current business units include HealthLeaders-InterStudy, Millennium Research Group, Decision Resources and Arlington Medical Resources. Fingertip Formulary will remain headquartered in Glen Rock, N.J.
Paris research company Ipsos has acquired New York research company Monroe Mendelsohn Research Inc., New York, and Forward Research, St. Louis.
Alliances/strategic partnerships
Chicago research company SPSS Inc. and Burlington, Mass., business intelligence and performance management company Cognos have partnered to provide integration between IBM Cognos 8 BI and SPSS predictive analytics technology. As part of the agreement, SPSS and Cognos will undertake joint go-to-market plans with special emphasis on driving predictive analytics in industry areas such as risk management for financial services and insurance, campaign effectiveness and product placement in retail and manufacturing, and sales effectiveness for life sciences.
New York research company The Nielsen Company has partnered with St. Louis communications company Charter Communications Inc. to commercialize the use of anonymous digital set top box (STB) data for analytical and potential audience measurement purposes for television. Charter is providing Nielsen with anonymous STB viewing data from almost 330,000 households in the Los Angeles area, which Nielsen plans to develop into commercially-available analyses and reports of digital television viewership. Charter will only provide data in an anonymous form to prevent Nielsen from identifying the personal information or identity of any individual Charter customer. Similarly, all Nielsen reports will contain only anonymous and aggregated data.
Separately, The Nielsen Company has signed an agreement with the Natural Marketing Institute (NMI), Harleysville, Pa., to provide insights into NMI’s Lifestyles Of Health And Sustainability (LOHAS) consumer segmentation model.
Orem, Utah, software firm Omniture Inc. and Beijing Internet search provider Baidu.com Inc. have formed a strategic alliance designed to give online marketers direct access to the Chinese online market. As marketers incorporate China into their online search campaigns, Omniture and Baidu.com plan to be ready with the technology integration to manage the metrics from those campaigns.
Voxco, a Montreal software company, has reached a partnership agreement with Paris mobile application company Prylos. The partnership will allow Voxco to offer its clients the ability to conduct surveys using mobile phones (CAMI technology) through the Y-Study application from Prylos.
Chicago research company Information Resources Inc. (IRI) and Port Washington, N.Y., research company The NPD Group Inc. have partnered to launch the Beauty Cross Channel Monitor, a cross-channel, retail tracking product for the U.S. beauty industry. The Beauty Cross Channel Monitor is designed provide insights for a range of beauty categories, including fragrance, cosmetics and skincare, from U.S. department stores, food, drug and mass outlets, excluding Wal-Mart.
Association/organization news
The New York-based Advertising Research Foundation (ARF) has created a new council named the Engagement Council. The council’s first step will be to publish a report cataloging the key insights mined from the past four years of disparate engagement research studies catalogued by the ARF and turn the information into specific action points that can be applied by marketers. The Engagement Council, meanwhile, will focus on next-generation projects, including collaboration with the Direct Marketing Association to learn how engagement relates to and influences direct marketing.
Awards/rankings
J.D. Power III, founder of Westlake Village, Calif., automotive research company J.D. Power and Associates, presented the Founder’s Award to Dick Colliver of American Honda Motor Co. Inc. for his outstanding commitment to customer service in the automotive industry.
New accounts/projects
San Diego media corporation More Enterprise Communications has signed a multi-year contract for New York research company Arbitron Inc. ’s Portable People Meter (PPM) radio ratings services for XMOR-FM and XSPN-AM, both based in San Diego with transmission from Tijuana, Mexico. The agreement will take effect as and when Arbitron commercializes the new audience ratings technology in San Diego.
Separately, Mega Media Group Inc., New York, has signed a multi-year contract with Arbitron for station-specific custom Portable People Meter listening estimates for “Pulse 87 FM” (WNYZ-LP). In addition, Arbitron has signed an agreement to license the standard, syndicated PPM radio ratings services for the New York Metro, which does not include estimates for low-power television stations broadcasting as radio stations. Only AM and FM radio stations are currently eligible to be reported in Arbitron syndicated services. These agreements will take effect as and when Arbitron commercializes the new audience ratings technology in New York. The agreement allows Mega Media Group to use both the monthly WNYZ-LP station-specific custom PPM listening estimates as well as the standard, syndicated New York Metro PPM radio ratings.
The Council for Research Excellence, an independent forum of media industry research experts created by New York research company The Nielsen Company, will commission a year-long study by Ball State University’s Center for Media Design (CMD) to observe how individuals consume traditional and emerging video platforms inside and outside the home. The video consumer mapping study, to be conducted jointly by CMD and Sequent Partners LLC, a New York brand and media metrics consultancy, is intended to establish how media is consumed across multiple platforms, in order to develop best practices in the area of video media measurement.
Lincoln Financial Distributors Inc., the wholesale distribution and marketing arm of Lincoln Financial Group, Philadelphia, has selected predictive analytics software from Chicago research company SPSS Inc. to help gain a deeper understanding of its financial intermediary customer base.
Great Falls, Va., research firm Rockbridge Associates Inc. has expanded its use of products from Confirmit, an Oslo, Norway, research software company, to carry out market research projects, including surveys for national e-commerce providers.
U.K research company YouGov, which specializes in opinion polling, is making a push into the qualitative research space and has appointed Andy Barker to develop its qualitative offer, which will encompass both online and offline approaches.
New companies/new divisions/ relocations/expansions
Kuala Lumpur, Malaysia, research company Pulse Group has opened its London office. The London office will act as a client development hub for Europe, while continuing to provide data collection services throughout Asia-Pacific.
In addition, Pulse Group has opened an office in New Delhi, India.
WebSurveyResearch (WSR), New York, and London-based health care data collection company All Global have expanded their capabilities by merging their research and operations teams across their U.S. and U.K. offices following the WSR acquisition of All Global last year. Moving forward, the integrated company will operate as All Global.
London research company TNS has merged its North American and Latin American custom businesses to create one region called The Americas, with planning to happen in 2008 and implementation in 2009.
In addition, TNS has created another new entity called TNS media. The move combines the North American operating units TNS media intelligence and TNS media research along with newly-acquired companies Compete and Cymfony under one business unit.
Dallas retail promotions agency TPN has expanded and launched a new unit dedicated to identifying shopper trends and insights around the mealtime occasion and their impact on marketing strategies at retail. The goal is to help marketers uncover opportunities to build brand equity and drive transactions in store.
Framingham, Mass., research firm IDC is opening an office in Canberra, Australia, to coincide with the launch of Government Insights, its new market advisory program.
Company earnings reports
Germany-based research company the GfK Group achieved a marked rise in sales and income for the financial year 2007. A successful fourth quarter contributed to these developments. In the fourth quarter, GfK achieved organic sales growth totaling 6.5 percent and a margin of 16.8 percent. Based on the preliminary key figures, GfK achieved an organic sales increase of 5.8 percent to EUR 1,162 million in financial year 2007. This means that sector growth, which experts estimate at around 5.0 percent, was substantially exceeded. Adjusted for acquisitions and currency effects, sales were up by 4.5 percent. Adjusted operating income rose by 4.3 percent year-on-year to EUR 157 million. The margin stood at 13.6 percent after 13.5 percent in the prior year. The target growth in sales published by GfK of more than 5.0 percent before currency effects and the target margin of up to 13.5 percent were both surpassed.
London research company TNS ’s full-year results for 2007 show adjusted operating profit up 12.3 percent to £111.7 million, and adjusted operating margin up 60 base points to 10.5 percent. Adjusted EPS was £15.4, up from £12.7 the previous year. Reported operating profit increased by 38.0 percent to £102.7 million.
Also in 2007, TNS built on existing retail and shopper services with the acquisition of three specialist consultancies, two in the U.S. and one in the U.K.; and combined its Media Intelligence and iTRAM businesses in order to exploit opportunities provided by media fragmentation.
Europe achieved underlying growth of 5.8 percent, with revenue of £687.9 million, with the U.K. performing ahead of the market (revenue £161.9 million). France grew well in custom business and benefited from additional polling work for the French presidential elections (£145.8 million). There were other strong advances in the rest of Europe (£380.2 million), especially Germany, Spain, Russia and Eastern Europe.
Underlying growth in the North America region overall was 2.4 percent (2007 revenue £205.2 million), described as “a year of rebuilding” and “ahead of expectations at the start of the year.”
In Asia-Pacific, Latin America and the Middle East and Africa (ALM), positive market conditions and the firm’s regional network contributed to overall regional growth of 8.0 percent, led by China, Korea, Australia and Hong Kong. Overall revenue for 2007 was £174.3 million.
Revenue from the consumer division rose 3.5 percent (underlying) to £327.3 million with strong performance internationally (and especially in Asia) by Worldpanel. Media had a good year (up 7.5 percent underlying to £226.2 million).
Business services (up 4.6 percent to £141.1 million) saw good growth in financial services, particularly in Europe and Asia. Technology (up 7.1 percent to £117.9 million) saw good underlying growth, driven by Asia and North America. Health care performed well in Europe and overall was up 7.7 percent to £102.4 million. Other sectors rose 4.6 percent to £152.8 million, with strong growth in automotive, political and social.
WPP Group PLC (WPP), London, has announced its unaudited preliminary results for the year ended December 31, 2007. Billings were up 5.1 percent at £31.7 billion, around $63.5 billion. Reportable revenue was up 4.7 percent to £6.186 billion. Revenue, including 100 percent of associates, is estimated to total over £7.3 billion. On a constant currency basis, revenue was up 8.2 percent, chiefly due to the 8.6 percent decline in the U.S. dollar against the pound sterling. Like-for-like revenues, excluding the impact of acquisitions and on a constant currency basis, were up 5.0 percent. On the same basis, gross margin was up 5.1 percent. Like-for-like revenues were up 5.3 percent in the first half of 2007 and up 4.8 percent in the second half, continuing the strong organic growth of 5.4 percent in 2006. Fourth-quarter revenues were up 4.9 percent.
Headline EBITDA rose 7.1 percent to £1.072 billion and 9.2 percent in constant currencies. Headline operating profit was up 8.0 percent to £928 million and up 10.1 percent in constant currencies.
Reported operating costs together with direct costs (but excluding goodwill impairment, amortization of acquired intangibles and profits on disposal of fixed-asset investments), rose by 4.2 percent and by 7.9 percent in constant currency. Like-for-like total operating and direct costs rose 4.6 percent. Reported staff costs, excluding incentives (which includes the cost of share-based compensation), were up 4.6 percent. Incentive payments (including the cost of share-based compensation) totaled £230.7 million (£246.9 million in 2006), down 6.6 percent, which represents 20.6 percent (23.1 percent in 2006) of headline operating profit before bonuses and income from associates. Before these incentive payments, operating margins remain strong at 18.7 percent. On a reported basis, WPP‘s staff cost-to-revenue ratio improved 0.5 margin points to 58.3 percent compared with 58.8 percent in 2006.
Headline operating profit or profit pre-goodwill impairment, amortization of acquired intangibles, interest, tax and investment gains and write-downs was up 8.0 percent to £928 million from £859 million and up 10.1 percent in constant currencies. Reported profit before interest and tax was up 8.1 percent to £846 million from £783 million and up 10.0 percent in constant currencies. Headline profit before tax or profit pre-goodwill impairment, amortization of acquired intangibles, investment gains and write-downs, revaluation of financial instruments and tax was up 6.7 percent to £817 million from £766 million and up 8.8 percent in constant currencies. Reported headline operating margin (including income from associates) increased 0.5 margin points to a record 15.0 percent from 14.5 percent, in line with the revised target set in February 2007.
Net finance costs (excluding the revaluation of financial instruments) were £110.7 million up from £92.7 million last year, largely reflecting higher interest rates, the impact of the cash cost of the acquisition of 24/7 Real Media Inc. in July 2007, partly offset by improved liquidity as a result of a reduction in average working capital.
Reported profit before tax rose by 5.5 percent to £719 million, and by 7.4 percent in constant currencies. WPP‘s tax rate on headline profits was 25.0 percent, a reduction of one percentage point over 2006. This reflects the continuing positive impact of the Group’s tax planning initiatives.
Diluted headline earnings per share were up 9.5 percent at 46.0p. In constant currency, earnings per share on the same basis were up 13.6 percent. Diluted earnings per share rose by 8.0 percent to 38.0p and by 12.0 percent in constant currencies.
BrainJuicer Group PLC, a London research agency, has announced its final results for the year ended December 31, 2007. The agency reported significant organic growth with revenue up by 42 percent to £6.566 million. Operating profit grew by 77 percent to £844,000. Profit after tax increased by 127 percent to £660,000. Earnings per share (diluted and adjusted) increased by 79 percent to 5.0 pence. Cash increased by £642,000 to £1,875,000 (no borrowings). All offices performed well, growing 63 percent in Holland, 38 percent in the U.K. and 14 percent in the U.S.