News notes

A September 19, 2006, Associated Press story reported that an employee of a company that conducted campaign polls for President Bush, Sen. Joe Lieberman and other political candidates pleaded guilty to making up poll results. Darryl Hylton pleaded guilty before U.S. District Judge Janet C. Hall to one count of conspiracy to commit wire fraud. The company, Guilford, Conn.-based DataUSA, is now known as Viewpoint USA.

Hylton admitted that he conspired to falsify survey and polling results to meet deadlines or other requirements that DataUSA otherwise could not meet. He also admitted that he directed other DataUSA employees to falsify results in a variety of ways, including changing demographic information, such as gender, to satisfy client requirements.

Hylton faces up to five years in prison and a fine of up to $250,000 when he is sentenced on Dec. 11. His plea came two weeks after Tracy Costin, the company’s owner, pleaded guilty to the same charge. As part of her plea agreement, Costin agreed to repay $82,732 to unidentified clients for 11 jobs between June 2002 and May 2004.

According to a federal indictment, Costin told employees to alter poll data, and managers at the company told employees to “talk to cats and dogs” when instructing them to fabricate the surveys.

Prosecutors say in some instances all survey answers were fabricated or surveys were completed after the respondent being interviewed had hung up the phone.

An FBI affidavit from 2004 in support of a search warrant quotes a supervisor of the company estimating that 50 percent of the data sent to Bush’s campaign was falsified. FBI Special Agent Jeff Rovelli, who wrote the affidavit, said in an interview with the Associated Press that investigators were not able to verify the claim related to Bush because that data was not located and analyzed.

The company primarily did internal polls for candidates rather than the type widely quoted in the news media, authorities said.

Boston research firm DiscoverWhy Inc. has changed its name to Reactions & Opinions Inc.

M/A/R/C Research, Irving, Texas, has launched a research industry blog, authored by Merrill Dubrow, M/A/R/C president and CEO, at www.marcresearchblog.com.

The Media Rating Council has fully accredited New York-based Scarborough Research’s core syndicated services: the 75 Top-Tier Local Market Studies and the Multi-Market Study, beginning with the 2006 product year. The full accreditation status covers Scarborough’s syndicated data collected via telephone, consumer booklet and television diary. Additionally, PRIME NExT, Scarborough’s proprietary data analysis software, has been fully accredited for the core syndicated services.

Acquisitions/transactions

Netherlands-based VNU Group B.V. has agreed to sell its 34.3 percent stake in Solucient, an Evanston, Ill., information products company serving the health care industry, to the Thomson Corporation, which is acquiring 100 percent of Solucient. Terms were not disclosed.

Media research firm Outsell Inc., Burlingame, Calif., has acquired London-based media analysis firm Electronic Publishing Services Ltd. (EPS). David Worlock, founder and chairman of EPS, will serve as chief research fellow of the new organization. All members of the EPS team will be retained.

San Antonio-based marketing firm Harte-Hanks Inc. has acquired Boston tech research firm AberdeenGroup Inc. The boards of directors of both Harte-Hanks and AberdeenGroup have approved the transaction. Harte-Hanks AberdeenGroup offices and analysts will remain in Boston.

J.D. Power and Associates, Westlake Village, Calif., has acquired Automotive Resources Asia (ARA), a market strategy and information firm. Terms of the transaction were not disclosed. ARA maintains offices in Beijing, Shanghai and Bangkok.

Seattle-based Global Market Insite Inc. has acquired Media Intelligence, a London interactive media survey firm.

ClickTracks Analytics Inc., Santa Cruz, Calif., has been acquired by Wilmington, Del.-based technology provider J.L. Halsey. Halsey will contribute to the acceleration of ClickTracks product development, marketing, sales and support capabilities. ClickTracks will operate as an indirect wholly-owned subsidiary of J.L. Halsey.

Alliances/strategic partnerships

Knowledge inForm Inc., Quincy, Mass., has partnered with Australia-based Insight Marketing Systems (IMS) to provide enterprise content management consulting services to complement IMS’ Research Reporter, an information management software system for market research professionals. Knowledge inForm and Insight Marketing Systems will provide a complete enterprise content management implementation process. Knowledge inForm will conduct the initial information audit, aid in the software customization process and craft the software launch strategy. Insight Marketing Systems will install and customize Research Reporter, as well as consult on the software launch strategy.

Seattle-based Global Market Insite Inc. (GMI) and Chicago research company Technomic have formed a strategic alliance under which GMI will provide consumer sample for Technomic’s Restaurant Occasions Ongoing Tracking program, which provides analysis on how consumers choose the restaurants they visit.

Germany-based firms GfK MACON, GfK PRISMA and GfK Regionalforschung have joined forces to work together under the name GfK GeoMarketing. The four key areas at GfK GeoMarketing comprise consultancy and appraisal services, market data, digital maps and geomarketing software. The company has approximately 80 employees.

Association/organization news

The American Marketing Association (AMA) has officially endorsed the Marketing Research Association’s Professional Researcher Certification (PRC) program. AMA joins the Advertising Research Foundation, Council of Marketing and Opinion Research, Interactive Marketing Research Organization, Marketing Research Institute International and the Burke Institute as endorsers of the program.

An international jury announced the winners of four ESOMAR prizes at the closing session of the 59th ESOMAR Congress in September. The ESOMAR Excellence Award for the best paper presented at an ESOMAR event during 2005 and 2006 is a new award which is given to papers of the highest quality that demonstrate a concrete contribution to the decision-making process while sustaining ESOMAR’s best practices. With a prize value of EUR 4,000, the award went to “The heart transplant - consumers at the heart of your business” by Kristin Hickey and Derek Leddie, the Leading Edge (Australia), and David Jenkinson, Carlton & United Beverages, Australia. The paper focused on how the traditional role of consumer research within large organizations acts as a barrier to marketing innovation, passion and the financial momentum of its brand portfolio. It proposed a new approach which replaces the traditional ”brand-centric” business approach with a “consumer-centric” one.

Three awards, in different categories, were also granted to the best papers presented at the ESOMAR Congress 2006. The winners of these three awards will be added to the shortlist for the ESOMAR Excellence Award for the best paper presented at an ESOMAR event during 2006 and 2007. Worth EUR 2,500, the Fernanda Monti Award for the best paper overall at Congress 2006 went to “Cognitive neuroscience, marketing and research“ by Graham Page, Millward Brown (U.K.) and Jane Raymond, University of Wales-Bangor (U.K.). This presentation addressed what cognitive neuroscience really means for marketing - assessing the relevance of cognitive neuroscience techniques such as brain imaging to market research. Academic scientists’ perspectives were combined with marketing practitioners’ views. The presentation also detailed the implications of key findings from cognitive neuroscience for marketing and the research industry, and discussed the role cognitive neuroscience’s techniques should have in market research.

The award for best case history, carrying a prize value of EUR 1,500, went to “Playing the Egg game - increased value in the customer experience“ by John Jennick, Egg (U.K.) and Gary Schwartz, FIRM, (U.K.). This paper described how Egg measures the customer experience across key moments of truth in the consumer lifecycle. The presenters demonstrated the correlation of agreement with value statements to customer satisfaction within key business functions and Egg contact centers, and how this translates to increased value to Egg’s business.

Also valued at EUR 1,500, the award for best methodological paper went to: “Right here…right now…Location-specific mobile research“ by Andrew Till, Flavio Souza, Japan Market Intelligence (Japan) and Steve Mele, Adidas, Japan. This presentation described a framework for the use of mobile research, supported by case studies conducted in Japan for Adidas. The approaches illustrated how mobile phones provide marketers not only with a viable survey platform but also with the means of recruiting samples at specific locations such as events in retail channels.

Samantha Marlowe, director of West Coast sales and client services for SQAD, a Tarrytown, N.Y., media cost forecasting firm, has been named board member to the Media Research Council of Los Angeles, a non-profit organization for media professionals.

Awards/rankings

Research software firms Perseus Development Corporation, Braintree, Mass., and WebSurveyor, Herndon, Va., which were combined under a newly formed holding company funded by Austin Ventures, were selected as a winner of the CRM Rising Star award by the editors of CRM magazine. The prize honors the companies who are seen as “raising the bar in customer-centric solutions and initiatives.” The joint company has been recognized for its efforts to gain more market share and raise industry awareness for Web survey and enterprise feedback management solutions.

Chicago-based C&R Research has been top rated by the first-ever Market Research Supplier Quality and Value survey, conducted jointly by Prevision Corporation and Inside Research. This survey taps into the opinions of corporate research buyers. The all-industry survey was conducted from January to March 2006 among senior research buyers representing more than 250 medium to large firms who rated satisfaction with their own research suppliers in 2005 based on six attributes: overall satisfaction, data quality, service quality, on-time delivery promised, relative cost and value for money. C&R Research received the highest composite score in the overall satisfaction category. Specifically, C&R Research earned the best rating in data quality, service quality and value for the money, with 100 percent of surveyed clients expressing satisfaction with C&R Research in these attributes.

Australia-based research software firm QSR International has been named a Microsoft Gold Certified Partner.

Seattle research firm Global Market Insite Inc. ranked No. 93 on the Inc. 500 ranking of the fastest-growing private companies in the country, with three-year growth of 895 percent.

New accounts/projects

Destiny Media Technologies Inc., Vancouver, B.C., announced that Seattle research firm Global Market Insite Inc. will use Destiny’s Clipstream Video for testing movie trailers online.

DIRECTV Inc., New York, and TNS Media Research, New York, have entered into an agreement to launch audience measurement services that will focus on DIRECTV interactive subscriber households. DIRECTV will use TNS Media Research’s audience measurement capabilities to better understand consumer consumption of the various programming and interactive services it offers. TNS Media Research will use aggregated and anonymous clickstream data from a sample based on 250,000 DIRECTV customers to provide audience and navigation metrics on viewing and interactive activity.

Reed Exhibitions has chosen Consumer Opinion Services, Seattle, to conduct surveys with attendees of the Global Gaming Expo in Las Vegas on November 14-16 using a handheld PDA device.

 The conferences and institutions participating in college football’s Bowl Championship Series have extended their contract with Harris Interactive, Rochester, N.Y., for four years. The agreement, which goes through the 2010 BCS bowls, keeps the Harris Interactive College Football Poll as part of the BCS Standings for the next four seasons. The Harris Poll made its debut last season. This year’s BCS Standings will include the Harris Interactive College Football Poll, USA Today Coaches’ Poll and six computer standings - Jeff Sagarin, Anderson and Hester, Richard Billingsley, Colley Matrix, Kenneth Massey and Dr. Peter Wolfe.

New companies/new divisions/ relocations/expansions

The principals of seven consulting firms in Europe, North America and Latin America have formed a group consultancy, gravitas, which offers specialist consulting advice, coaching and mentoring to senior management in market research companies. The new group has offices in the United States (Connecticut, New York, New Jersey and Arizona), the United Kingdom (London), Germany (Hamburg) and Argentina (Buenos Aires) and plans to add partners in Asia-Pacific in the near future. Member firms are: Cambiar, Transition Strategies, Lev & Berlin, meaning ltd., Bill Pegram & Co., synygis ltd., Watermann Agens GmbH and JGG Consulting. Personnel includes: Simon Chadwick, William “Jay” Wilson, Lock Collins, Steve Sherrill, Michael Mitrano, Duane Berlin, Tim Macer, Bill Pegram, David Cahn, Lars Watermann and Jorge Garçia-González. The group’s Web site is www.gravitas-partners.com.

Researcher Angus Reid has opened Angus Reid Strategies, a full-service strategic market research consultancy that will emphasize the use of online research solutions. The company recently opened offices in Vancouver, Calgary and Toronto and expects to open U.S. offices in the coming months. Reid’s venture will use the software technology of sister company Vision Critical.

Tulsa, Okla., research software firm StatSoft has opened an office in Oslo, Norway.

Technology market research firm ABI Research has opened a new Asia-Pacific regional headquarters in Singapore.

Stamford, Conn.-based FocusVision Worldwide has opened a Chicago-area office in Buffalo Grove, Ill., to provide sales and technical support.

London research firm ToLuna PLC has opened a New York office. The new office will act as the hub of U.S. and Canadian operations be headed by Holly Williams, who has been named general manager, ToLuna North America.

London-based Research Now has opened a San Francisco office and expanded its New York office. The San Francisco office will act as Research Now’s North American service delivery hub with the team both selling and delivering services in the Pacific time zone.

Research book publisher Paramount Market Publishing Inc. has moved to 950 Danby Road, Suite 136, Ithaca, N.Y., 14850.

Company earnings reports

Paris-based research firm Ipsos reported first-half 2006 revenue of EUR 407.7 million, an increase of 26.7 percent on the first half of 2005.

Harris Interactive, Rochester, N.Y., released its financial results for the fiscal fourth quarter and fiscal year ended June 30, 2006. Revenue for the fourth quarter of FY2006 set a new record of $60 million, up 11 percent when compared with $54.2 million of revenue from the same period a year ago. U.S. revenue was $46.8 million, up 11 percent from $42.3 million reported for the FY2005 fourth quarter. European revenue was $13.2 million, up 11 percent from the $11.9 million of revenue reported for the same period a year ago. Unfavorable foreign currency exchange rates had a negative impact of $0.1 million on revenue for the quarter.

Global Internet revenue for the fourth quarter of FY2006 was $33.9 million, up 11 percent from last year’s fourth quarter Internet revenue of $30.5 million. U.S. Internet revenue was $30.2 million, up 11 percent when compared with $27.1 million in the fourth quarter of FY2005. European Internet revenue was $3.7 million, up 7 percent from the $3.4 million of Internet revenue reported in the same period last year. For the quarter, Internet revenue comprised 56 percent of consolidated revenue, 64 percent of the U.S. revenue and 28 percent of the European revenue.

Operating income for the fourth fiscal quarter of 2006, which included $1.4 million of restructuring and non-cash stock-based compensation costs, was $4.2 million or 7 percent of revenue, up 47 percent when compared with operating income of $2.9 million, or 5.3 percent of revenue last year. Operating income for fourth fiscal quarter of 2005 included $1 million in restructuring and severance but did not include any stock-based compensation costs.

Net income for the quarter increased 189 percent to $3.3 million, or $0.05 per diluted share, as compared with net income of $1.2 million, or $0.02 per diluted share for the fourth quarter of fiscal 2005. Sales bookings for the quarter were $47.9 million, flat with the $47.8 million booked in the same period a year ago.

Revenue for the fiscal year ended June 30, 2006 was $216 million, up 10 percent from the $197 million of revenue reported in fiscal year 2005. U.S. revenue was $170.1 million, up 13 percent from the $149.9 million a year ago. European revenue was $46 million, down 1 percent compared with $46.5 million in fiscal 2005. Unfavorable foreign currency exchange rates had a negative $1.8 million impact on revenue for the fiscal year.

Global Internet revenue for fiscal year 2006 was $125.4 million, up 15 percent from last year’s $109.3 million. U.S. Internet revenue was $112.2 million, up 15 percent when compared with the $97.7 million in fiscal 2005. European Internet revenue was $13.2 million, up 14 percent from $11.6 million in fiscal 2005. For the full fiscal year, Internet revenue comprised approximately 58 percent of consolidated revenue, 66 percent of U.S. revenue and 29 percent of European revenue.

Fiscal year 2006 operating income, including restructuring, severance and non-cash stock-based compensation costs of $3.7 million, was $14.3 million, or 6.6 percent of revenue, up 58 percent when compared with operating income of $9 million, or 4.6 percent of revenue for the last fiscal year. Fiscal year 2005 operating income included $2.8 million of restructuring and severance, but did not include any stock-based compensation costs.

Net income for the fiscal year was $9.5 million or $0.15 per diluted share, up 498 percent when compared with net income of $1.6 million (including a $3 million mostly non-cash loss from discontinued operations), or $0.03 per diluted share for fiscal 2005. Total sales bookings for fiscal 2006 were $218.6 million, up from the $184.1 million of sales bookings reported in FY2005.

London-based TNS reported results for the six months ended June 30, 2006. Revenue was £480.5m, up 4.5 percent from 2005. The adjusted operating profit was £41.7m. Adjusted earnings per share were 4.9 pence.

Aegis unit Synovate reported first-half 2006 revenues of £182.3 million, up 25.9 percent from the first half of 2005. Profit grew by 27.6 percent to £118.5 million.