News notes

Arbitron Inc., New York, has been awarded three new patents for its Portable People Meter (PPM) system, covering enhancements to the amount of information that can be embedded into the inaudible PPM codes and improvements to the PPM’s ability to detect inaudible codes. The “Encoding Multiple Messages In Audio Data and Detecting Same” patent (#6845360) covers the ability of the PPM system to handle multiple layers of identification codes simultaneously. This allows the PPM to track, for example, the network originating the program, the local station broadcasting the program and specific commercials aired within the program. The multi-layer codes can also contain a time stamp that indicates when a program was originally broadcast. The time stamp allows the PPM to determine if a broadcast was time-shifted by the PPM survey participant or delayed by the network affiliate.

Separately, Arbitron announced that four retailers in the Houston market have agreed to participate in the market trial of the Portable People Meter system. More than 50 store locations operated by these retailers throughout Houston will play audio programming in their stores that has been embedded with unique PPM identification codes supplied by Arbitron. When an Arbitron PPM survey participant enters one of these retail outlets, the Portable People Meter will detect the codes and report that the individual has been exposed to its in-store audio programming. The retailers that have agreed to encode in-store audio include: Best Buy (16 locations); Gap (18 locations); Gallery Furniture (one location); Old Navy (15 locations). According to Scarborough Research, these outlets in aggregate were visited by at least 63 percent of the adult population over the course of the past year.

Acquisitions/transactions

New York-based Millward Brown has acquired online research firm Dynamic Logic. Nick Nyhan, president, Dynamic Logic, and Ronit Aviv, CTO, founded the company in 1999. Dynamic Logic, headquartered in New York City, has 65 employees, with offices in Chicago, San Francisco, Los Angeles and London. Nyhan will remain president of Dynamic Logic, which will now be known as Dynamic Logic - A Millward Brown Company.

Nielsen Media Research, New York, has acquired AudioAudit, a provider of broadcast verification technology services for the advertising industry. Financial details were not disclosed.

Germany-based GfK Group has acquired a 100 percent holding in SoHealthAsia in Hong Kong. Founded in 2003, SoHealthAsia has branches in Hong Kong and Singapore and specializes in market research and consultancy in the pharma and health care markets.
Separately, GfK Group acquired a 33 percent holding in Research Matters AG, a Swiss pharmaceutical market research specialist. The two companies also agreed the gradual increase of the GfK stake over the next few years. In 2004, the company’s nine full-time employees achieved sales totaling EUR 3.3 million

The NPD Group, Port Washington, N.Y., has acquired STS Market Research, a Cambridge, Mass., company serving the fashion industry. As part of the acquisition, NPD has also acquired the STS longitudinal research panel, AccuPanel. The transaction was completed July 1, 2005. Arthur Spar, formerly chairman and CEO of STS, becomes vice president, NPD Fashionworld, the fashion-tracking division of NPD. Other STS staff joining NPD include Susan Merrill, now director, client development for NPD Fashionworld, and Carol Parker, now director, AccuPanel for NPD Fashionworld.

New York-based Nielsen Media Research International has acquired Korea Advanced Digital Data Inc. and its subsidiary, BasisNet, a South Korea advertising monitoring and intelligence company. Financial details were not disclosed.

London-based Synovate has acquired Italian market research company, AMT Consulting Srl. AMT has sales offices in Rome and Milan, together with an operation center in Bari.

Netherlands-based information company VNU and research firm IMS Health, Fairfield, Conn., announced a definitive agreement to merge in a stock-and-cash transaction valued at EUR 5.8 billion ($7.0 billion). The combined company will have pro forma 2004 revenues of approximately EUR 4.7 billion ($5.6 billion), pro forma annual EBITDA of about EUR 1.1 billion ($1.3 billion), and an EBITDA margin of approximately 23 percent. The company would be listed on both the Euronext Amsterdam and the New York Stock Exchange. Under the terms of the agreement, IMS shareholders will receive $11.25 in cash and 0.60415 VNU shares for each IMS share. VNU shareholders will hold approximately 65 percent of the combined company and IMS shareholders approximately 35 percent.

Upon completion of the merger, VNU will be led by a management team comprised of executives from both companies. Its executive board will be headed by Chairman and CEO Rob van den Bergh and will include David Carlucci as deputy CEO and chief operating officer; Rob Ruijter, VNU’s CFO, as chief financial officer; and Nancy Cooper, IMS’ CFO, as chief transformation officer. The combined company will have a 10-member supervisory board, four of whom are members of the IMS board of directors, including David M. Thomas, chairman of IMS, who will become vice chairman of the VNU supervisory board.

The merger, which is expected to close in the first quarter of 2006, is subject to approval by the shareholders of VNU and IMS, regulatory approvals and other customary closing conditions. The executive and supervisory boards of VNU and the board of directors of IMS have each unanimously approved the transaction.

Alliances/strategic partnerships

Midgam Research and Consulting Ltd., a full-service research firm in Israel, has joined the Harris Interactive Global Network of independent market research companies.

RBC Financial Group and Ipsos Public Affairs have agreed to publish the RBC CASH Index (Consumer Attitudes and Spending by Household). The CASH Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal financial situations, savings and confidence to make large investments. RBC immediately assumed sponsorship of the index, which has been in existence since 2002. The RBC CASH Index will be released at the end of the first full week of each month. In addition to the Overall RBC CASH Index, RBC and Ipsos will publish four indices calculated and comprised from specific questions within the CASH Index Survey. These additional indexes include the Current Consumer Index, the Consumer Expectations Index, the Jobs & Employment Index, and the Purchasing & Investing Index.

Research International in the U.K. and Bare Associates International (BAI), Fairfax, Va., have linked up to provide global mystery shopping services. Research International and BAI both developed a Web-based system for recruitment and data capture through to final delivery to clients via client portals.

Millward Brown has appointed Vietnamese market research company Customer Insights (CI) as its licensee in Vietnam. CI is based in Ho Chi Minh City (Saigon) with field offices in Ha Noi, Da Nang, Nha Trang, Can Tho and Hai Phong.

IMSA, the International Mystery Shopping Alliance, has appointed Nextep Promotion to its global business alliance of mystery shopping companies. Established in 2000, Nextep has a field force of over 1,000 mystery shoppers covering Russia as well as the Ukraine and Kazakhstan.

Market Insite Group, Mill Valley, Calif., has merged with France-based Asterop SA. The new company, Asterop Inc., will offer business intelligence tools to the retail, real estate and banking industries, with offerings for the insurance, consumer products and automotive industries to follow.

Walker Information, Indianapolis, has added Millward Brown Asia Pacific to its global network. As a part of the network, Millward Brown Asia Pacific will add stakeholder relationship management to its existing product line.

Survey Sampling International (SSI), Fairfield, Conn., has formed an alliance with Save the Children. Coinciding with SSI’s $25,000 donation to Save the Children is the launch of its new panelist charity program under which panel members can elect to donate their awards to Save the Children.

Association/organization news

The Advertising Research Foundation (ARF), the American Association of Advertising Agencies, and the Association of National Advertisers, Inc. (ANA), have formed a joint initiative to encourage industry-wide adoption of “consumer engagement” as a media measurement metric to complement traditional measures of consumer exposure. The initiative is called MI4 (Measurement Initiative: Advertisers, Agencies, Media and Researchers).

A joint committee has been formed to shepherd the research project. The initial phase of the committee’s investigation is to 1) define engagement as a metric and 2) propose a large-scale industry research effort to validate engagement as a planning, tracking and return on media investment (ROMI) metric to complement exposure and frequency.

“MI4 will be a collaborative initiative,” says Barbara Bacci-Mirque, executive vice president, ANA. “ANA members have told us that, in the face of media fragmentation and consumer control over how they receive advertising messages, new forms of advertising are needed to reach today’s consumers. In this age of accountability, new metrics are necessary to adequately reflect the impact of nontraditional messages.”

The MI4 initiative received endorsements from joint committee members including the Procter & Gamble Company, Ford Motor Company and Masterfoods, in addition to agency and association partners.

The ARF has named Joseph T. Plummer chief research officer. His primary role is to insure that the ARF provides industry leadership on critical advertising and marketing issues and determines how those issues can be “positively impacted by intelligent and creative research.” Prior to his new role, Plummer served as executive vice president, director of research and insight development for McCann-Erickson WorldGroup.

The Southwest Chapter of the Marketing Research Association (MRA) has announced seven scholarship awards for 2005. The seven members and/or their employers, their classes and the dollar amounts awarded are as follows: Lisabeth Clawson, Clawson Research, RIVA 303 advanced moderator training, $1,000; Rachelle Cooper, Information Alliance, human resources and management, $1,000; David Galloway, Galloway Research Service, MRII principles of marketing research, $949; Randi Houts, Tammadge Market Research, information security, $500; Elaina McGrew, ingather research, business, marketing and public speaking, $1,000; Veronica Pang, Galloway Research Service, Excel, level, 1, 2 and 3, $735; Bertha Perez, Galloway Research Service, computer sciences, $570.

The Professional Researcher Certification program (PRC) established by the MRA is now offering a specialty education track for qualitative research consultant. The new track is the first of its kind in terms of specialty or niche track in the program and offers three levels of expertise: associate, practitioner and expert.

The track was led and developed by MRA’s qualitative consultant committee: Louise Kroot-Haukka of Louise Kroot Associates, George Sloan of Customer Strategy Consulting, and Carla Lindemann of Issues & Answers Network, Inc. The committee consisted of qualitative researchers who hold memberships in various industry associations.

Kroot-Haukka views the new track as a strong opportunity for qualitative researchers. “I believe that this will help to define the profession for new people who are exploring the possibility of entering,” she says. “It will also help to define the ways that more experienced professionals can enhance their skills and abilities. It will be a win-win situation for qualitative research consultants.”

PRC is open to all marketing and opinion researchers. It encompasses all segments of the profession - from end user to interviewer. MRA membership is not required for PRC. For more information visit www.mra-net.org.

Awards/rankings

Garcia Research, Burbank, Calif., won top honors (in the under $5 million in revenues category) at the Latin Business Association’s Sol Awards in Los Angeles. Separately, the San Fernando Valley Business Journal honored company founder Carlos Garcia with its Small Business Entrepreneur Award.

In June during the annual conference of Canada’s Marketing Research and Intelligence Association, Claros Research Corporation, Calgary, Alberta, was awarded the Murray Philp Altruistic award for its work with Calgary’s Glenbow Museum. The award is given annually to a Canadian marketing research company that worked on a pro-bono or reduced fee basis for a not-for-profit organization.

Orem, Utah-based research firm PGM Incorporated has been awarded the 2005 Best of State award in the category of business services: data services for the state of Utah. The awards were created to recognize outstanding individuals, organizations and businesses in Utah.

In June, Rob Monster of Seattle research firm GMI, Inc. was named Ernst & Young Entrepreneur Of The Year for the Pacific Northwest, in the software and technology category. Monster was selected from 19 finalist companies by an independent panel of judges comprised of local business, academic and community leaders.

New accounts/projects

Miller Brewing Company has extended its contract with ACNielsen U.S., Schaumburg, Ill., and will continue to use ACNielsen as its preferred provider of sales analysis and consumer insights.

TNS has been awarded a new television audience measurement contract in Singapore. The contract will be operated on behalf of MediaCorp, Singapore’s largest broadcaster, and will last for five years. The new service will comprise a PeopleMeter panel of 750 households representative of the population of Singapore and begins on January 1, 2006. Viewing information will be retrieved overnight and audience figures for the previous day’s viewing will be available the following morning. The data will be made available through the TNS television audience analysis system InfoSysTV.

Asia Internet Plaza Corporation, a provider of online panel and research services to organizations in Japan, Asia and other international markets, has selected Confirmit from Oslo-based Firm to power its largest panel with the intent to serve research companies seeking global or Asia-specific research.

Advertiser Perceptions has commissioned the Harris Interactive Service Bureau, Rochester, N.Y., to manage its new online syndicated tracking study, Power Metrics, which is providing information for Advertiser Perception’s clients. Nearly 40,000 respondents (roughly 10,000 in each of four waves) will complete the syndicated study in its first year.

New companies/new divisions/ relocations/expansions

New York-based NetRatings, Inc. has opened an office in Brisbane, Australia. The office is headed by Greg Chamberlain, business development manager for Nielsen//NetRatings.

Wilson Research Strategies, Washington, D.C., has opened a new office to support the firm’s work in the San Antonio-Austin corridor. It has one satellite office in Oklahoma City. This is the firm’s first office in Texas. The company appointed Senior Vice President Tara Niebergall as head of the new San Antonio office.

EMH Opinion Sampling has moved to a new address at 1401 21st St., Suite 370, Sacramento, Calif., 95814. The phone number remains the same.

The GfK Group has formed GfK Custom Research, North America. Martin R. Lautman has been named CEO of the group, which includes GfK ARBOR, GfK CRI, GfK Schiappa and Caribou Lake, as well as GfK NOP and GfK Automotive, the two companies that grew out of GfK’s recent acquisition of NOP World.

M/A/R/C Research, Irving, Texas, has opened an office in New York, at 437 Madison Ave., 4th Floor, and named Joan Treistman its executive vice president.

Microtab, Inc., has moved to 10945 State Bridge Rd., Suite 401-260, Alpharetta, Ga., 30022-5676. Phone 770-664-9244. Fax 770-664-9798.

Data Development Worldwide has opened an office at 505 Montgomery St., 11th Floor, San Francisco, Calif., 94111. Phone 415-874-3210. Fax 415-874-3211.

Company earnings reports

For the first half of 2005, Netherlands-based VNU reported revenue increased 2 percent to EUR 1,648 million from EUR 1,623 million, and EBITDA was up 6 percent to EUR 296 million from EUR 280 million. Reported profit for the half year was negatively impacted by currency translation effects.

On an organic basis, however, revenues increased 6 percent and EBITDA grew 11 percent. EBITDA growth benefited slightly from a favorable comparison with the prior year, when a restructuring charge in its marketing information group, offset by the release of a real estate provision, resulted in a net negative impact to EBITDA of EUR 4 million.

In the first half of 2005, organic revenue for the marketing information group was up slightly more than 4 percent, with nearly all ACNielsen regions delivering solid growth. Growth was especially strong in the developing markets of Asia, Latin America and ACNielsen’s emerging markets region, which includes Eastern Europe. ACNielsen Europe, however, continued to experience slower growth as a result of difficult market conditions. In the second half of 2005, VNU expects the group’s revenue growth to accelerate, based on improved performance in Europe, the introduction of several new advisory services products and the continued expansion of ACNielsen’s consumer panels, resulting in full-year growth of approximately 4-5 percent.

Organic EBITDA grew 19 percent, and EBITDA margins increased to 12.9 percent from 11.5 percent in the first half of 2004.
After a slow first quarter and a better second quarter, growth within VNU’s advisory services group is expected to accelerate in the second half, as performance picks up in its business units and new products and services begin to produce results.

The media measurement and information group delivered organic revenue growth of 11 percent in the first half, driven by strong performances from Nielsen Media Research in the U.S., and from NetRatings. Organic EBITDA grew 19 percent versus the prior year.
For the full year, VNU expects the group’s organic revenues to grow at least 10 percent.

Nielsen Media Research had a strong first half, as the business continued to grow on the strength of its National Sample expansion in the U.S., and the introduction of Local People Meter service in New York, Los Angeles, Chicago and San Francisco during 2004 (Local People Meter service was introduced in Philadelphia and Washington, D.C. in mid-2005).

NetRatings, VNU’s 60 percent-owned Internet audience and advertising measurement business, delivered strong revenue growth in the first half. Results were driven by growth from the NetView audience measurement service in the U.S., the expansion of the MegaPanel service to measure e-commerce activity, and a strong performance from SiteCensus products. The company’s EBITDA loss in the first half was (EUR 2.1 million), compared with (EUR 3.6 million) in the prior year.

For the second quarter 2005, ended June 30, New York-based Arbitron Inc. reported revenue of $69.8 million, an increase of 7.3 percent over revenue of $65.1 million during the second quarter of 2004. Costs and expenses for the second quarter increased by 4.5 percent, from $53.1 million in 2004 to $55.4 million in 2005. Earnings before interest and income tax expense for the quarter were $18.6 million, an increase of 17.2 percent over EBIT of $15.9 million during the comparable period last year.

Income tax expense for the second quarter declined 45.1 percent, from $5.5 million in 2004 to $3.0 million in 2005 due in part to the previously announced reversal of certain tax liabilities for contingencies related to prior periods.

Net income for the second quarter increased by 78.7 percent from $8.6 million in 2004 to $15.4 million in 2005.

Net income per share for the second quarter 2005 increased to $0.48 (diluted), compared with $0.27 (diluted) during the comparable period last year.

For the six months ended June 30, 2005, revenue was $149 million, an increase of 5.2 percent over the same period last year. EBIT was $51.3 million, compared to $47.8 million in 2004. Net income for the six months was $35.2 million or $1.11 per share (diluted), compared with $26.7 million or $0.85 per share (diluted) during the comparable period last year.

Paris-based Ipsos posted first-half 2005 revenues of EUR 321.8 million, up 12.5 percent compared to first-half 2004. Negative currency effects depressed revenue growth by 1.4 percent, while newly-acquired companies had a positive impact of 6.1 percent. Organic growth amounted to 7.8 percent.

All business lines contributed to Ipsos’ growth, but to varying degrees. Generally speaking, the most internationally-integrated business lines - particularly those involved in advertising research and customer relationship management research - delivered stronger growth than business lines that have maintained a local client base and organization.

Ipsos’ growth rates varied from one region to another. Growth was very strong in emerging markets, supported by a buoyant market, robust positions in several key countries (e.g., Brazil, Mexico and China) and market share gains among multinational businesses as well as local clients.

For the first time, combined revenues from Asia-Pacific, the Middle East and Latin America accounted for 20 percent of consolidated revenues in first-half 2005.

Growth in North America held steady, underpinned by a balanced performance across all client segments and business lines.

Growth in Europe slowed down slightly, coming in below Ipsos’ 5 percent annual target for this region. This was mainly due to sluggish economic conditions, prompting many clients to keep a check on their marketing expenditure, especially in mass market industries. This slowdown is also attributable to an unfavorable comparison basis, as growth in Europe was far stronger in the first half of 2004 than in the second. Despite these factors, Ipsos is confident that it is on track to meet or exceed its 5 percent annual growth target.

For the second quarter ended June 30, 2005, Opinion Research Corporation, Princeton, N.J., reported revenues were $51.8 million versus $49.4 million in the prior year’s second quarter. Social research revenues were up over 12 percent to $36.2 million versus $32.3 million in last year’s second quarter. Market research revenues totaled $13.2 million versus $13.8 million in the prior year’s second quarter. Teleservices revenues were $2.4 million versus $3.3 million in last year’s second quarter.

Net income for the quarter was $1.3 million, or $0.20 per diluted share, as compared to a loss of ($237,000), or ($0.04) per diluted share, in last year’s second quarter. Last year’s second quarter was impacted by a refinancing charge that reduced net income in the quarter by $1.4 million and diluted earnings per share in the quarter by $0.22.

The income tax provision in both periods is higher than statutory rates due to the fact that the firm is not deriving tax benefits from non-U.S. and state losses.

Second-quarter revenues for New York-based NetRatings were $17.1 million, an 18 percent increase over revenues of $14.5 million in the second quarter of 2004. In accordance with generally accepted accounting principles (GAAP), net loss for the second quarter of 2005 was ($1.9 million), or ($0.05) per share, on approximately 36 million shares. This compares with a net loss of ($4.3 million), or ($0.12) per share, in the second quarter of 2004, on approximately 34.4 million shares.

On an EBITDA basis the company reported a second-quarter loss of ($577,000) or ($0.02) per share. This compares with an EBITDA loss in the second quarter of 2004 of ($909,000), or ($0.03) per share. NetRatings’ second-quarter 2004 results included a one-time, $1.8 million insurance recovery, favorable to both GAAP and EBITDA results. Excluding this item, NetRatings’ year-over-year results improved from an EBITDA loss of ($2.7 million) in the second quarter of 2004 to an EBITDA loss of ($577,000) in the second quarter of 2005.

At SPSS Inc., Chicago, second-quarter net revenues totaled $58.1 million, compared to $53.0 million in the second quarter of 2004, with earnings per diluted share of $0.21, compared to a loss per share of ($0.05) in the same period last year. New license revenues were $24.4 million in the second quarter of 2005, up 17 percent from $21.0 million in the second quarter of 2004. This increase was driven by continued double-digit growth in the core tools business.

The company’s operating margin in the second quarter of 2005 was 13 percent. Reported operating income for the second quarter of 2005 increased $9.6 million to $7.3 million, compared to a loss of ($2.3 million) in the prior-year period. Operating expenses for the quarter dropped by over 8 percent from the same period last year. During the second quarter of 2005, SPSS incurred $0.3 million in unusual pre-tax charges related to its ongoing effort to restructure costs. Results for the second quarter of 2004 included approximately $2.5 million of pre-tax charges related to the company’s accounting review and restatement and downsizing of certain European field operations.

For the six months ended June 30, 2005, net revenue totaled $115.5 million compared with $110.1 million for the same period in 2004. New license revenue for the first half of the year was $50.4 million, an increase of 10 percent from $45.8 million in the same period in 2004.

Operating income for the six months ended June 30, 2005 was $11.3 million with an operating margin of 10 percent. During the first half of 2005, the company incurred $2.0 million in planned unusual pre-tax charges related to restructuring for future cost savings. Operating income for the six months ended June 30, 2004 was $1.7 million, including unusual pre-tax charges of $2.5 million.

Reported earnings per diluted share for the six months ended June 30, 2005 were $0.34, compared with $0.06 for the same period in 2004.

IMS Health, Fairfield, Conn., announced second-quarter 2005 revenues of $433.3 million, up 14 percent (12 percent constant dollar), compared with revenues of $379.6 million for the second quarter of 2004. Second-quarter diluted earnings per share on an SEC-reported basis was $0.41, up 52 percent, compared with $0.27 in the 2004 second quarter. Second-quarter adjusted diluted earnings per share was $0.34, compared with $0.29 per share in the same period of 2004, an increase of 17 percent. Net income on an SEC–reported basis was $93.2 million, up 43 percent compared with net income of $65.1 million in the year-earlier quarter. On an adjusted basis, net income for the second quarter of 2005 was $77.8 million, up 12 percent, compared with net income of $69.5 million in the prior year.

Operating income in the second quarter was $103.3 million on an SEC-reported basis and $110.7 million on an adjusted basis, compared with operating income of $102.5 million on both an SEC-reported and adjusted basis in the year-earlier period. Adjusted operating income excludes a charge of $7.4 million for costs associated with the proposed merger of IMS and VNU, N.V. Operating income rose 1 percent on an SEC-reported basis and 8 percent on an adjusted basis (7 percent constant dollar).

Adjusted results for the second quarter of 2005 exclude the merger-related costs mentioned above, certain net pre-tax income items totaling $5.1 million, and certain net tax benefits of $17.6 million, including a $24.3 million tax benefit related to a technical correction Congress passed in the American Jobs Creation Act of 2004 (AJCA).

Adjusted results for the 2004 second quarter exclude certain net pre-tax expense items totaling approximately $0.4 million, as well as certain net tax provisions of approximately $4.0 million.