News notes
Scarborough Research, New York, announced in July that it had donated consumer research data to enhance the efforts of the Advertising Council’s mission to effect positive social change. The Ad Council will use the Scarborough data to better target and promote local campaigns and extend the impact of their messages. Scarborough contributed its core syndicated databases and software to the Ad Council: 81 Top-Tier Local Market Studies, Scarborough USA+ (a national database), the Scarborough Multi-Market Study, and PRIME NExT (Scarborough’s proprietary data analysis software). Scarborough will also provide training and support for all of the services contributed.
Interviewing Service of America, Van Nuys, Calif., is celebrating the 25th anniversary of its founding this year.
G & S Research, Indianapolis, is celebrating the 10th anniversary of its founding this year.
Researcher Synovate announced a new organizational structure for its Asian business in which its Asian operations will form the three smaller business unit groupings - called strategic units (SUs) - of China, North Asia and South Asia. Synovate China will form one of the new SUs with Synovate China’s managing director Darryl Andrew being promoted to CEO of Synovate China. Jill Telford has been promoted to CEO of Synovate North Asia, another new strategic unit comprising Hong Kong, Korea and Taiwan. Tim Balbirnie has been named CEO of Synovate South Asia, the third new strategic unit comprising India, Indonesia, Malaysia, the Philippines, Singapore and Thailand.
In late July, Wilton, Conn.-based Greenfield Online Inc. announced that the company and certain current and former corporate officers have been named as defendants in a purported class action lawsuit filed in the United States District Court for the District of Connecticut.
As reported by mrweb.com, the complaint, against Finance Chief Robert Bies and former CEO Dean Wiltse, has been made by investor the Plumbers and Pipefitters Local Union No. 650 Pension Annuity Trust Fund. The Fund says that statements made between February and September 2005 deceived investors and pushed up the company’s share price. It claims to have suffered “real economic loss” as a result of purchasing shares during the period.
The plaintiff is seeking to recover damages on behalf of all those who purchased Greenfield Online’s common stock during the period. Greenfield said in a press release it believes that the allegations in the lawsuit are without merit, and it intends to vigorously defend itself against all allegations.
Acquisitions/transactions
Greenfield Online Inc. announced plans to start the process of separating its Ciao Internet survey solutions and comparison shopping business segments from an operational and legal perspective. “This decision is consistent with the steps already taken in the first quarter of this year to separate these business segments from a financial reporting perspective,” said Al Angrisani, president and CEO of Greenfield Online, in a company press release. “We expect the process will be completed over the next six to nine months and believe it will help facilitate the growth of each business.”
The company also announced that Ciao GmbH’s two managing directors, Max Cartellieri and Gunnar Piening, resigned their positions with the company. Cartellieri co-founded Ciao in 1999 and, following its acquisition by Greenfield Online Inc. in April 2005, had served as the company’s executive vice president of corporate development, and an observer on the Greenfield Online board of directors. Piening, who joined Ciao in 2000, had served as senior vice president, European and Asian sales and operations. They will be succeeded by Nicolas Metzke, who has been appointed managing director of Ciao. Metzke has been with Ciao since 2000 and will head Greenfield Online’s European subsidiary Ciao GmbH through the separation process and the Internet survey solution business going forward.
Harris Interactive, Rochester, N.Y., has acquired MarketShare, a private Asian research firm with co-located headquarters in Hong Kong and Singapore, and Decima Research, a private Canadian research firm based in Ottawa.
SV Investment Partners, a private equity firm, has acquired Stamford, Conn.-based FocusVision Worldwide Inc. in partnership with the company’s management team. Terms of the transaction were not disclosed. In conjunction with the transaction, SV Operating Partners William “Jay” Wilson and Douglas B. Fox have joined FocusVision’s board of directors and will serve as strategic advisors to the business.
Germany-based GfK Group has acquired the business of Greece-based Edge Market Research and Consultancy, which now belongs to a Greek subsidiary, GfK Market Analysis. Separately the firm announced the acquisition of Stratum Healthcare, which has offices in Zagreb, Croatia and Belgrade, Serbia.
The Nielsen Company, New York, reached an agreement to acquire San Francisco-based Telephia Inc., a provider of syndicated consumer research to the telecom and mobile media markets. Terms of the transaction, which is subject to regulatory approval and expected to close in the third quarter, were not disclosed. Telephia and Nielsen are both privately-held companies.
Separately, in news reported after the July/August issue went to press, the Nielsen Company (formerly VNU) and NetRatings Inc. completed the previously announced merger of NetRatings with a wholly-owned subsidiary of the Nielsen Company. The merger was approved by the stockholders of NetRatings at a special meeting held in June. As a result of the merger, NetRatings became a privately-held company, wholly owned by the Nielsen Company and its subsidiaries. Shares of NetRatings’ common stock, which prior to the merger traded on the Nasdaq Global Market under the symbol NTRT, were delisted from trading on June 22.
Cambridge, Mass., research firm Abt Associates has acquired the strategy and research firm Schulman, Ronca & Bucuvalas Inc. (SRBI). Headquartered in New York City, SRBI will operate as a wholly-owned subsidiary of Abt Associates led by current President and CEO Mark A. Schulman.
Paris-based Ipsos has acquired Australian research firm Eureka.
Dulles, Va., research firm Vovici has acquired assets from Seattle survey software provider Raosoft Inc. Under the terms of the agreement, Vovici will assume responsibility for providing support for Raosoft’s existing EZSurvey and EZReport clients for the duration of their maintenance contracts. Raosoft will retain all business activities, including customer support, for its InterForm product.
Omaha, Neb., information firm infoUSA and New York research firm Guideline Inc. have entered into a definitive merger agreement to provide for the acquisition of Guideline by infoUSA. The total transaction value, including the assumption of debt, will be approximately $41.6 million. Founded in 1969 as FIND/SVP, Inc., Guideline reported $46 million in revenue in 2006.
Under the terms of transaction, infoUSA will pay $1.35 per share of Guideline common stock, in cash, and an amount equal to the liquidation preference and accrued dividends for outstanding shares of Guideline preferred stock. The acquisition will be effected by a tender offer for all outstanding Guideline shares, followed by a second-step merger. InfoUSA will finance the transaction with cash on hand and borrowings under its credit facility. InfoUSA expects the acquisition of Guideline to be accretive to earnings in fiscal 2007. The transaction, expected to close in the third quarter of 2007, is subject to customary closing conditions.
Guideline will remain headquartered in New York and will operate independently as part of infoUSA. Marc Litvinoff, who has been with Guideline since 2004, will become the company’s CEO.
Decipher Inc., a Fresno, Calif., research firm, has acquired Forefront Consulting Group, a company specializing in programming and hosting, data management and custom development services for market researchers. Forefront Consulting Group has changed its name to Decipher Inc. The Forefront team will continue to reside in the firm’s Hollywood, Calif., office. Forefront founders Kristin Luck and Ji Yeong Kim will join the Decipher senior management team as president, and senior vice president, data management, respectively. The combined companies will total 52 full-time U.S.-based employees with targeted 2007 revenue in excess of $10 million.
Market Strategies Inc. (MSI), a Livonia, Mich., research firm, has merged with Doxus, a Portland, Ore., research firm. Additionally, MSI formally announced its name change to Market Strategies International. Doxus will become the technology industry group within MSI.
Toledo, Ohio research firm Trendex North America has purchased the following syndicated studies from Synovate Canada: the Canadian Beauty Care Study, Footwear Market Index - Canada, and Canadian Personal Accessories Study.
Alliances/strategic partnerships
Rochester, N.Y.-based Harris Interactive has expanded its affiliate network, adding Kenya-based Infotrak Research and Consulting to its roster.
Germany-based GfK Group and BGK GmbH have set up a joint venture. The new company, in which GfK has a 70 percent stake, will operate internationally under the name of GfK m2 and concentrate on the entertainment electronics industry. The company is headquartered in Hergiswil, Switzerland.
Chicago sports marketing and media services agency rEvolution has formed a strategic alliance with Menlo Park, Calif., research firm Knowledge Networks through which the two will deliver sponsorship research and consulting.
Lightspeed Research, Basking Ridge, N.J., has formed a joint venture company with China-based research agency Millward Brown-ACSR. The new company will be known as Lightspeed MB-ACSR. The venture will combine Lightspeed Research’s research panel networks with Millward Brown-ACSR’s data collection services. Through this venture, Lightspeed MB-ACSR will provide online data collection solutions to Kantar companies including Millward Brown, Research International China and Oracle Added Value, as well as to other non-Kantar clients.
Denmark-based online research firm Zapera.com A/S and Bashkirova and Partners, a Moscow-based research company, have formed a pan-Nordic-Russian partnership agreement. Under the terms of the agreement, the two companies will grant each other access to their respective online consumer panels and CATI facilities, allowing both companies to serve their corporate clients across Northern European and Russian borders.
Denmark-based iMotions – Emotion Technology A/S agreed to a long-term partnership with Swedish firm Tobii Technology to bundle iMotions’ Emotion Tool software with Tobii’s eye trackers.
Association/organization news
The Advertising Research Foundation has formed the Online Research Quality Council. Its mission will be to develop a set of standards for research buyers and sellers to follow. The new council will enlist support from the global market research industry and will be led by a steering committee of research executives: Robert Tomei, executive vice president and global director of Access Panels, TNS; Efrain Ribeiro, chief operating officer, Ipsos Interactive Services; Steve Coffey, chief research officer, the NPD Group; Josh Chasin, chief research officer, comScore; Jonathan Jephcott, executive vice president, ViewsNet, Synovate; and Renee Smith, vice president, panel quality, Harris Interactive. The council will be managed by a rotating chairperson selected from the steering committee members for a six-month period. The initial chairperson will be Tomei.
The Marketing Research Association (MRA) has launched a redesign of its Web site, www.mra-net.org, to provide users with improved access to information on MRA’s activities, membership benefits, business development opportunities, education and training, and research’s legal and regulatory issues.
Separately, the MRA announced its Exchange Evaluation Program (EEP), an online rating system used by research companies and client companies to rate business transactions and how well a product or service works for business needs. EEP is a peer-to-peer review system, allowing companies and organizations to post reviews for any business entity that they have conducted business with. Reviews are based on ratings of quality, communication and other factors that are of key importance in selecting a dependable service or product.
Users will address issues between buyers and sellers of research in an online setting, and offer a forum for rating companies. Rating factors include: payment history; compliance with payment terms; ease of contact and communication; clarity and detail of communications and instructions; accuracy of job order specifications; and overall professional conduct. For more information visit www.mra-net.org.
Harris Interactive, Rochester, N.Y., has joined the British Polling Council (BPC), an association of polling organizations that publish research results. Modeled after the National Council on Public Polls in the U.S., the BPC promotes standards of disclosure that ensure that the consumers of published surveys can adequately interpret the results as well as judge their reliability and validity.
The Council of American Survey Research Organizations (CASRO) announced that its membership has overwhelmingly approved a revision to the Internet Research section of the organization’s mandatory and enforceable Code of Standards and Ethics for Survey Research.
The revision of the Code addresses the practice of online surveys, specifically the e-mail solicitation of survey respondents, use of “active agent” technology to capture behavioral data, and proper communication/disclosure with members of online survey panels.
“We are proud to establish the world’s highest personal privacy standards for the research industry’s fastest-growing data collection methodology,” said CASRO President Diane Bowers in a press release. “The fact that passage of this revision was nearly unanimous definitely speaks to the care in drafting the revision, as well as to the commitment of our member companies to conduct their businesses beyond reproach.”
By joining CASRO, member companies pledge annually to adhere to the organization’s set of industry standards. To view the complete Code visit www.casro.org/codeofstandards.cfm.
A new organization called the Association for Downloadable Media has been created to provide advertising and audience measurement standards for the podcasting industry. It was established by a group of 15 companies, including Apple and Nielsen Online.
Its mission statement is to provide “leadership in and organization of advertising and audience measurement standards” as well as “research, education and advocacy to all those involved in portable media across the Internet, iPods, MP3 players, mobile devices, P2P and other upcoming platforms.” For more information visit www.downloadablemedia.org.
Awards/rankings
Chicago accounting firm Grant Thornton LLP’s Survey of Upstream U.S. Energy Companies won the Marketing Achievement Award (MAA) in the “survey/research” category presented at the 18th annual conference of the Association for Accounting Marketing (AAM). The AAM-MAAs are presented in recognition of outstanding achievements in the areas of accounting marketing, professional services and communications, with accounting firms from across the United States and Canada competing.
Market Connections Inc., Fairfax, Va., has received the 2007 Helios Apollo Award in the Emerging Company category. The Helios Apollo Awards, sponsored by Helios HR in partnership with the Washington, D.C. metropolitan chapter of the Society of Human Resource Management, honors four organizations that promote a continuous learning environment as part of their culture.
Corvallis, Ore., research firm InsightsNow Inc. was named as the second-ranked business on the Portland Business Journal’s Fastest-Growing Private Companies list. InsightsNow reported an overall growth rate of 548 percent from 2004 to 2006.
New accounts/projects
Survey Sampling International, Fairfield, Conn., has selected software from Netherlands-based Nebu as a component of its global Internet panel management and interviewing platform. Nebu products include its panel management system Dub Knowledge and its survey system Dub InterViewer.
ESPN Radio has entered into a multi-year agreement for New York-based Arbitron’s Portable People Meter radio ratings services for its five owned-and-operated radio stations. Separately, Crawford Broadcasting Co mpany has entered into a multi-year agreement for the Arbitron Portable People Meter audience measurement service when the PPM system is deployed in Chicago, starting in January 2008.
Wal-Mart has endorsed Knowledge Networks, Menlo Park, Calif., as the online panel research company to conduct custom studies using the retailer’s proprietary Segmentation Lens.
Oslo-based research software firm Confirmit announced that Toronto-based Research House has licensed the Confirmit MR platform for its online market research services.
Tesco PLC and its Tesco USA division will use Trade Dimensions, a marketing intelligence service from the Nielsen Company, Schaumburg, Ill., in the U.K.-based grocer’s impending U.S. launch. As Tesco USA rolls out its new 10,000-square-foot Fresh & Easy Neighborhood Markets in Las Vegas, Los Angeles, Phoenix and San Diego, Trade Dimensions will provide information to help the retailer analyze the viability of each potential site using data from the TDLinx Channel Database.
New companies/new divisions/ relocations/ expansions
Kuala Lumpur-based research process outsourcing firm Pulse Group has opened an office in New York City and tapped John Saez to head it.
Research firm Kadence has opened new offices in Jakarta and Kuala Lumpur. Both new offices launch with a team of five market research professionals and will deliver quantitative and qualitative services. Singapore will remain Kadence’s Asian regional head office.
India-based research process outsourcing firm Dexterity has opened an additional facility in Chennai, India to host another 250 employees.
Reston, Va.-based comScore has established comScore Japan KK as its first customer service office in the Asia-Pacific region and named Maru Sato managing director of the new office.
Mature Marketing & Research L.L.C. has opened offices in Teaneck, N.J.
BIGresearch, Columbus, Ohio, has opened a New York office and named Holly Williams as vice president of sales to manage it.
Greenfield Online Inc., Wilton, Conn., has established a Greenfield-Ciao office in Shanghai.
Company earnings reports
The Nielsen Company, New York, announced its financial results for the first quarter 2007. Reported revenues for the first quarter successor period (January 1, 2007 to March 31, 2007) were $1,072 million, an increase of 5 percent in constant currency over the reported revenues for the first-quarter predecessor period (January 1, 2006 to March 31, 2006) of $1,003 million. Reported operating income for the first quarter successor period 2007 of $56 million compared to pro forma operating income of $62 million in the first quarter 2006. The first quarter 2007 results were negatively impacted by $19 million in restructuring costs and $8 million of costs associated with recruiting and other acquisition-related compensation. Covenant earnings before interest, taxes, depreciation and amortization and other adjustments permitted under the firm’s senior credit facility (covenant EBITDA) was $1,121 million for the 12-month period ended March 31, 2007.
U.K. research consultancy Nunwood announced 58 percent growth in the first half of 2007 compared to same period last year.
Greenfield Online Inc., Wilton, Conn., announced financial results for its second quarter ended June 30, 2007. Total net revenue was $30.8 million for the second quarter of 2007 as compared with $24.5 million for the same period in the prior year for an increase of $6.3 million or 26.1 percent, of which approximately $0.9 million or 3.9 percent was due to favorable currency effects.
For the Internet survey solutions segments, total third-party net revenue was $23.3 million for the second quarter of 2007, as compared with $20.2 million for the same period in the prior year for an increase of 15.4 percent.
For the comparison shopping segment, total third-party net revenue was $7.5 million for the second quarter of 2007, as compared with $4.2 million for the same period in the prior year for an increase of 77.1 percent.
Total gross profit was $22.6 million or 73.2 percent of revenues for the second quarter of 2007, as compared with $18.9 million or 77.3 percent of revenues for the same period in the prior year.
Operating income was $4.4 million for the second quarter of 2007 or 14.3 percent of revenue, as compared to operating income of $3.7 million or 15.1 percent of revenues for the same period in the prior year.
Net income for the second quarter of 2007 was $3.1 million as compared with net income of $2.3 million for the same period in the prior year.
Net cash flow provided by operating activities was $7.6 million for the second quarter of 2007 as compared to $5.1 million for the same period in the prior year.
National Research Corporation, Lincoln, Neb., announced results for the second quarter ended June 30, 2007. Revenue for the quarter was $11.9 million, compared to $10.7 million for the same period in 2006. Net income for the quarter was $1.6 million, or $0.24 per basic and $0.23 per diluted earnings per share, compared with net income of $1.3 million, or $0.19 per basic and diluted share, in the prior year period.
Revenue for the first half of 2007 increased 20 percent to $24.1 million, compared to $20.1 million for the same period in 2006. Net income for the first six months of 2007 increased 28 percent to $3.2 million resulting in $0.47 per basic and $0.46 per diluted earnings per share, up 27 percent and 24 percent respectively, over the same period in 2006.
During the second quarter of 2007, infoUSA, Omaha, Neb., delivered record revenues of $160.1 million, which includes $50.1 million for Opinion Research. Excluding Opinion Research, revenue was $110 million for the second quarter of 2007, compared to $100.3 million for the same period in 2006, an increase of 10 percent.
InfoUSA’s second-quarter operating income was $16 million, which includes $2.6 million for Opinion Research. Excluding Opinion Research, operating income was $13.4 million, compared to $7.5 million in the second quarter of 2006. The company also recorded expenses of $1.5 million related to the transition of infoUSA National Accounts to Omaha.
InfoUSA’s earnings per share for the second quarter of 2007 were $0.11 versus $0.06 in the second quarter of 2006. EBITDA for the second quarter was $24.9 million, which includes $5 million for Opinion Research. Excluding Opinion Research, EBITDA was $19.9 million, compared to $15.6 million in the second quarter of 2006. During the second quarter the company recorded $0.4 million in non-operating expenses primarily related to losses on sales and impairments of investments.
Segment revenue in the second quarter for the marketing research group was $50.1 million. The marketing research group is composed of Opinion Research and Macro International, acquired December 4, 2006.
SPSS Inc., Chicago, reported results for the quarter and six months ended June 30, 2007. The company reported second-quarter revenues of $68.9 million, an increase of 9 percent from $63.5 million in the second quarter of 2006. New license revenues were $32.4 million, up 10 percent from $29.3 million in the same quarter last year. Operating income increased to $10.2 million, or 15 percent of revenues, from $6 million, or 9 percent of revenues, in the 2006 second quarter.
Diluted earnings per share in the 2007 second quarter were $0.36, compared to $0.12 for the same quarter last year. Charges for stock-based compensation were $2.6 million and $2.2 million in the second quarter of 2007 and 2006, respectively.
The company continued to identify cost-saving initiatives and drive productivity improvements in the 2007 second quarter, including the expected closure of three facilities, all of which should be completed by year end. Operating results in the quarter included reorganization and related pre-tax charges of $0.7 million or approximately $0.02 EPS. Additional charges related to these initiatives will be recorded in the 2007 third and fourth quarters.
Revenues for the six months ended June 30, 2007 totaled $139.1 million, an increase of 11 percent from $125.7 million for the same period in 2006. New license revenues were $67.3 million, up 14 percent from $59.2 million in the same period last year. Operating income increased to $22.3 million, or 16 percent of revenues, from $13 million, or 10 percent of revenues, in the 2006 six-month period. EPS was $0.75, compared to $0.35 in the same period a year ago. Charges for stock-based compensation were $4.5 million and $3.1 million in the first six months of 2007 and 2006, respectively. The effective income tax rate in the 2007 six-month period was 37 percent, compared to 38 percent in the same period last year.
Cash at June 30, 2007 was $278.4 million. Cash from operations increased to $34.7 million in the six months ended June 30, 2007 from $14.6 million in the same period in 2006.
For the second quarter of 2007, Arbitron Inc., New York, reported revenue of $79 million, an increase of 6.6 percent over revenue of $74.2 million during the second quarter of 2006.
Costs and expenses for the second quarter increased by 17.1 percent, from $67.3 million in 2006 to $78.8 million in 2007, due in part to planned expenditures for the rollout of the Portable People Meter ratings service in Philadelphia, New York, Nassau-Suffolk, Middlesex-Somerset-Union, Los Angeles, Riverside and Chicago.
Earnings before interest and income tax expense (EBIT) for the quarter were $5.4 million, a decrease of 55 percent compared with EBIT of $11.9 million for the second quarter of 2006.
Net income for the quarter was $3.8 million, compared with $7.4 million for the second quarter of 2006. Net income per share for the second quarter of 2007 was $0.13 per share (diluted), compared with $0.24 per share (diluted) during the comparable period last year.
For the six months ended June 30, 2007, revenue was $170.8 million, an increase of 7.3 percent over revenue of $159.3 million for the same period in 2006.
EBIT decreased 26.6 percent from $41 million in the first six months of 2006 to $30.1 million in 2007. Net income for the period in 2007 decreased 24.5 percent to $19.3 million compared with $25.5 million in 2006. Earnings per share (diluted) for the six months in 2007 were $0.64, compared with $0.83 per share (diluted) last year.
IMS Health, Norwalk, Conn., announced second-quarter 2007 revenue of $537.5 million, up 11 percent or 8 percent on a constant-dollar basis, compared with revenue of $486.2 million for the second quarter of 2006.
Operating income in the second quarter of 2007 was $118.1 million, up 11 percent or 13 percent constant dollar, compared with $106.3 million in the year-earlier period. Excluding a merger cost of $6 million in the 2006 second quarter, on a non-GAAP basis, operating income growth would have been 5 percent or 7 percent constant dollar.
Second-quarter 2007 diluted earnings per share on a GAAP basis were $0.36, compared with $0.30 in the prior-year quarter, an increase of 20 percent. Earnings per share for the second quarter of 2006 included foreign exchange hedge gains and losses, a tax provision related to a reorganization and income and expenses related to the terminated merger with the Nielsen Company (formerly VNU). When adjusted for these items and the phasing of tax benefits and provisions, on a non-GAAP basis, earnings per share for this year’s second quarter would have grown $0.05 year over year to $0.39, a 15 percent increase.
For the first half of 2007, revenues were $1,047.8 million, up 12 percent or 9 percent constant-dollar, compared with revenue of $932.4 million for the first half of 2006. First-half 2007 operating income was $229.2 million, a 13 percent increase or 14 percent constant dollar, compared with $203.1 million in the year-earlier period.
For the first six months of 2007, diluted earnings per share on a GAAP basis was $0.79, compared with $0.86 in the prior-year period. Earnings per share for the first half of 2007 and 2006 included net tax benefits and foreign exchange hedge gains and losses, while the second quarter of 2006 also included merger-related income and expenses. When adjusted for these items, on a non-GAAP basis, earnings per share for the 2007 first half would have grown $0.09 year over year to $0.74.
Net income on a GAAP basis was $159 million, compared with $180.8 million in the first half of 2006. Net income for the first six months of 2007 and 2006 included net tax benefits and foreign exchange hedge gains and losses, net of taxes, while the second quarter of 2006 also included merger-related income and expenses. Adjusted for these items, on a non-GAAP basis, net income for this year’s first half would have grown $13.2 million.
Oslo-based Confirmit reported that revenue increased in the second quarter of 2007 by 34 percent to $6.1 million. Pre-tax profit for the second quarter amounted to $558,000, an increase of 65 percent compared to the corresponding quarter of 2006.