Nielsen Company


Nielsen Company
Nielsen Holdings N.V.
Type Public (NYSENLSN)
Industry Media
Founded 1923
Headquarters New York, United States
Key people David L. Calhoun, CEO
Susan D. Whiting, EVP
Mitchell Habib, EVP
Products Marketing research
Advertising research
Revenue $5.1 billion (2010)
Employees 32,000 (2011)
Website www.nielsen.com

Nielsen is a global marketing and advertising research company headquartered in Lower Manhattan, New York City.[1] Nielsen is active in over 100 countries, and employs some 32,000 people worldwide. Total revenues amounted to $5.1 billion in 2010.

Contents

Company information

Nielsen is a publicly held global information and media company, and is one of the world's leading suppliers of marketing information (Nielsen Consumer, formerly ACNielsen), media information and TV ratings (Nielsen Media Research), online intelligence (Nielsen Online) and mobile measurement (Nielsen Mobile). On January 25, 2011 the company issued an IPO raising $1.6 billion in the biggest private equity-backed U.S. IPO since 2006.[2] David L. Calhoun is Nielsen's Chief Executive Officer. Calhoun came to Nielsen in 2006 from General Electric. Susan D. Whiting is the Executive Vice President of Nielsen and Chairman of Nielsen Media Research. Whiting has been with Nielsen since 1978 and was named one of the 100 Most Influential Women in New York City business by Crain's New York Business in 2007.

Nielsen's major businesses include:[3]

  • Nielsen Consumer: provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior
  • Nielsen Consumer Panel Services (Homescan & Spectra)
    • Homescan: multi-outlet panel that captures consumer purchase behavior, demographic profiles, attitudes & usage information and evaluations of the impact of media on actual behavior
    • Spectra: suite of applications that provide segmentation and targeting analysis
  • BASES: combines primary consumer research with forecasting techniques to estimate the sales potential of new product initiatives prior to market entry.
  • Nielsen Claritas: provides companies with marketing research demographic data, marketing software and market segmentation services
  • IMS: media planning and analysis software for industry and proprietary research
  • Nielsen Business Media: includes trade publications, trade shows, digital products and services, serving markets across the entertainment, media and marketing, retail, travel and performance, and design industries
  • Nielsen Entertainment: provides market information, creative testing, marketing solutions and analytical tools through business units focused on film, music, home entertainment, books, and interactive entertainment
  • Nielsen IAG: collects engagement metrics - advertisements, product placement, and program sponsorship occurring across all broadcast and major cable networks during primetime
  • Nielsen Media Research: measures the size of audiences for television, radio and print, as well as advertising spending and creative content information and services
  • Nielsen Mobile: provides syndicated consumer research to the telecom and mobile media markets
  • Nielsen Online: measurement and analysis of online audiences, advertising, video, blogs, consumer-generated media, word of mouth, commerce and consumer behavior
  • PERQ/HCI: reports on advertising expenditures and content in healthcare journals in the U.S.
  • Scarborough Research: measures the shopping patterns, lifestyles and media habits of U.S. consumers
  • SRDS: provider of media rates and data

Company history

Arthur C. Nielsen and the company’s founding

Arthur C. Nielsen founded the AC Nielsen Company in 1923 with the idea of selling engineering performance surveys. It was the first company to offer market research.[4] The company expanded its business in 1932 by creating a retail index that tracked the flow of food and drug purchases. This was the first retail measurement of its kind and for the first time allowed a company to determine its “share” of the market.[4] Arthur C. Nielsen is credited with coining this business term.

Radio and television

In 1936, Arthur C. Nielsen acquired the Audimeter, which measured which radio stations a radio had been tuned to during the day. After tinkering with the device for a few years, the company created a national radio rating service in 1942.[5] The company collected information on which stations were tuned to in 1,000 homes. Then, this survey data was sold to manufacturers who were interested in the popularity of programs and demographic information about listeners for advertising purposes. This was the birth of audience measurement that would become the most well-known part of Nielsen’s business when applied to television.[5] Today, these are commonly referred to as “Nielsen ratings.”

The company began measuring television audiences in 1950, at a time when the medium was just getting off the ground. Just as with radio, a sampling of homes across the U.S. was used to develop ratings. This information was collected on a device that was attached to a television that recorded what was being watched. In 1953, the company began sending out diaries to a smaller sample of homes (“Nielsen families”) within the survey to have them record what they had watched.[4] This data was put together with information from the devices. This combination of data allowed the company to statistically estimate the number of Americans watching TV and the demographic breakdown of viewers.[4] This became an important tool for advertisers and networks.

In the 1980s, the company launched a new measurement device known as the “people meter.” The device resembles a remote control with buttons for each individual family member and extras for guests. Viewers push a button to signify when they are in the room and push it again when they leave, even if the TV is still on. This form of measurement was intended to provide a more accurate picture of who was watching and when.[6]

On November 18, 2008 Nielsen announced that will return to the US radio ratings business after discontinuing the service in 1968. The new radio rating service debuted in 50 US mid-size radio markets in the spring of 2009 and the results were available in the summer.[7] Nielsen will use its address-based sampling (ABS) to recruit sample households. The Nielsen-pioneered method uses randomly selected addresses rather than telephone numbers in its domestic television measurement in order to reach the 34% of U.S. households that are not covered by current sampling methods, including cell-phone only and many unlisted land line phone households, according to the company.[8]

In July 2008,[9] Nielsen released the first in a series of quarterly reports, detailing video and TV usage across the ‘three screens’ – Television, Internet and Mobile devices. The A2/M2 Three Screen Report also includes trends in timeshifted viewing behavior and its relationship to online video viewing, a demographic breakdown of mobile video viewers and DVR penetration.

Mergers and acquisitions

The company was acquired by the Dun & Bradstreet Company in 1984.[10] D&B, as it is known today, broke Nielsen into two separate companies in 1996. These were Nielsen Media Research, which was responsible for TV ratings, and AC Nielsen, which was responsible for consumer shopping trends and box-office data.[11] The Dutch publishing company VNU (Verenigde Nederlandse Uitgeverijen) acquired Nielsen Media Research in 1999.[12] It later recombined the two halves of the business when it acquired AC Nielsen in 2001. In between, it sold its newspaper properties to Wegener and its consumer magazines to Sanoma.

In 2004, Nielsen began a joint venture called AGB Nielsen Media Research with WPP Group's AGB Group, a European competitor which provides similar services.[13]

VNU combined the Nielsen properties with other research and data collection units including BASES, Claritas, HCI and Spectra. The company's publishing arm also owned several publications including The Hollywood Reporter and Billboard magazine. VNU began acquiring companies that added to its measurement capabilities. In 2006, it acquired a majority stake in Buzzmetrics, a company which measures consumer-generated media online. Under the new ownership, Nielsen bought the remaining shares of the company in 2007.[14] In the same year, Nielsen acquired Telephia, which measures mobile media,[15] and Bilesim Medya, a Turkish advertising intelligence firm.[16]

In 2006, VNU was acquired by a group of six private equity firms: the American Kohlberg Kravis Roberts & Co., Thomas H. Lee Partners, Blackstone Group, Carlyle Group and Hellman & Friedman, and Dutch equity firm AlpInvest Partners[17] for £5bn.[18] In the same year, the group hired David L. Calhoun, formerly of General Electric, as CEO.[19] He renamed VNU as The Nielsen Company in 2007.

VNU sold its business publications division in 2006 for €320m (£210m) to venture capital group 3i, which then sold the UK division (VNU Business Publications Ltd) to Incisive Media.[18]

In 2008, the company acquired IAG Research which measures viewer engagement with TV commercials.[20] The same year Nielsen made a strategic investment in NeuroFocus, a California firm applying neuroscience brainwave techniques for consumer research.[21] In 2009 and 2010, Nielsen sold its business magazines; its well-known entertainment properties went to the new company e5 Global Media. On June 3, 2010 Nielsen Holdings filed with the SEC to raise up to $1.75 billion in an initial public offering.[22]

In June 2010 Nielsen paired with Mckinsey to create the social media consulting company NM Incite.[23] Through "NM Incite," Nielsen combines its Buzzmetrics listening platform technology with McKinsey's management consultants, to offer a broad range of social consulting influenced by social media data and analytics.[24] NM Incite has operations in 13 global markets, including: US, UK, Germany, Spain, Italy, Australia, New Zealand, China, Japan, India, Brazil, Canada and Korea.[25]

In Aug 2011 Nielsen acquired Marketing Analytics, Inc., one of the pioneers of marketing mix modeling and a recognized leader in analytics and advanced planning software. Headquartered in Evanston, Ill. and founded in 1991, Marketing Analytics, Inc. helps companies measure the impact of their marketing plans on sales by combining deep modeling expertise with robust software applications. Link, a long-time innovator in marketing modeling, will continue to lead the group and work to integrate these capabilities into Nielsen offerings. The acquisition enables Nielsen to provide marketers of fast moving consumer goods with the most complete and timely view of the impact of media and marketing - a distinct advantage when developing marketing plans across multiple channels, such as online and offline advertising, in-store promotions and consumer promotions.

Competitors

Top 9 of the Market Research Sector 2009
Rank Company Sales in 2009
(million USD)
Growth in %
1 Nielsen 5,000.0 2.6
2 Kantar Group 2,000 2.5
3 IMS Health Inc. 1,958.6 8.9
4 GfK AG 1,397.3 5.4
5 Ipsos 1,077.0 6.5
6 Synovate 739.6 9.5
7 IRI 665.0 6.6
8 Westat 425.8 0.8
9 Arbitron 400.0 5.9

The Nielsen Code

In 1931, Arthur C. Nielsen, Sr., wrote the Nielsen Code,[26] defining the principles that would guide Nielsen to global leadership in marketing research. The Code remains relevant today and continues to guide to company and employees practices. The 8 pillars of this code are:

  • Impartiality
  • Thoroughness
  • Accuracy
  • Integrity
  • Economy
  • Price
  • Delivery
  • Service

References

  1. ^ "Contact Us." Nielsen. Retrieved on August 28, 2011. "Nielsen, 770 Broadway, New York, NY 10003-9595"
  2. ^ Nielsen Holdings, Demand Media Shares Gain After IPOs - Bloomberg
  3. ^ Nielsen's Major Businesses
  4. ^ a b c d Gillespie, Mary. “Nielsen makes viewers count by watching them watch TV.” Chicago Sun-Times, April 9, 1989
  5. ^ a b Basler, Barbara. “A.C. Nielsen, Who Devised System That Rates TV Programs, Dead.” New York Times, June 4, 1980
  6. ^ Kaplan, Peter W. “Nielsen to Try New Audience-Survey Device.” New York Times, October 16, 1985
  7. ^ "Nielsen to Measure Radio Audiences in 50 Cumulus Markets" From Nielsen.com (November 18, 2008)
  8. ^ "U.S. Radio Audience Measurement"
  9. ^ Whichever Screen, People are Watching
  10. ^ D&B Company History
  11. ^ Deogun, Nikhil. “VNU Nears Deal to Acquire ACNielsen.” The Wall Street Journal, December 18, 2000
  12. ^ Pope, Kyle. “VNU to Buy Nielsen Media for $2.5 Billion — Accord to Help Dutch Firm Speed Up Its Transition To Information Concern.” The Wall Street Journal, August 17, 1999
  13. ^ WPP Group. (5 Oct 2004) AGBNielsen Research created. Press release.
  14. ^ Nielsen to Acquire Remaining Shares of Buzzmetrics
  15. ^ Dickson, Glen and Eggerton, John. “Nielsen Closes on Telephia Deal,” Broadcasting & Cable August 10, 2007
  16. ^ Plunket, Jack W. (2008). Plunkett's Advertising and Branding Industry Almanac 2008: Advertising and Branding Industry Market Research, Statistics, Trends and Leading Companies. Plunkett Research, Ltd.. ISBN 1593921098. 
  17. ^ Singer, Jason and Berman, Dennis K. “VNU Gets Board Approval for Sale To Group of Private-Equity Firms.” The Wall Street Journal, March 8, 2006
  18. ^ a b Incisive to buy VNU Business Publications, Daily Telegraph, February 6, 2007
  19. ^ Siklos, Richard. “Made to Measure” Fortune Magazine, February 20, 2008
  20. ^ Elliott, Stuart. “Nielsen’s Latest Purchase is Audience Research Firm” New York Times, April 8, 2008
  21. ^ Gary Holmes, "Nielsen Makes Strategic Investment in NeuroFocus, an Innovative Leader in Neuromarketing Research" Nielsen Media Research, February 7, 2008
  22. ^ IPO News: Leading TV audience measurement company Nielsen plans $1.75 billion IPO (by Renaissance Capital)
  23. ^ "Nielsen Pairs With McKinsey for Social Media Consulting" June 15, 2010
  24. ^ Zach Hofer-Shall "Nielsen Joins Forces With McKinsey For Social Intelligence Consulting" "Forrester Blogs" June 14, 2010
  25. ^ NM Incite "About Us"
  26. ^ "The Nielsen Code" The Nielsen, UK website

External links

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