FEATURE18 December 2012

Together at last


Competitors for much of their history but willing collaborators at other times – Nielsen and Arbitron will get the chance to work together full time once their $1.3bn marriage is complete.

“Nielsen buys Arbitron” – the news was both surprising and expected. Surprising because two companies that have spent the past 60 years trying to eat each other’s lunch finally decided that they’re probably better off sitting down together and sharing. Expected because at many times throughout their histories they have demonstrated the willingness and desire to collaborate.

“The term ‘frenemy’ could have been coined for these two giants of the US media research industry”

The term ‘frenemy’ could have been coined for these two giants of the US media research industry. Nielsen started out in 1923 measuring radio audiences before moving into TV, whereas Arbitron was founded in 1949 to measure TV before transitioning into radio. Each took lumps out of the other along the way but Arbitron eventually ceded the TV ground to Nielsen in 1993.

A year later, Arbitron bought a 50% stake in Nielsen’s Scarborough Research, which measures the lifestyle, shopping patterns, media behaviour and demographics of American consumers. The pair remain “productive partners” in that venture, said Bill Kerr, Arbitron’s soon-to-depart CEO.

But perhaps the most important collaboration between the two companies was Project Apollo, a bold attempt at a single-source measure of media exposure and purchasing habits that ultimately proved too costly to come to fruition five years ago. An Arbitron spokesman said at the time: “The challenge for us is to find a way to do it affordably, and Apollo, as it was designed, was too expensive for what customers could see right now.”

Today’s announcement gives Nielsen and Arbitron the chance to revisit the principles of Apollo, but with a different execution. Nielsen CEO David Calhoun reckons big data technologies can solve the problems Apollo encountered in trying to link consumer purchase data to media exposure without requiring a single source panel. “The technology has developed over the years, but the need has always been there,” he said.

Nielsen is already doing some of what Apollo set out to achieve – tying its ‘Buy’ data to its ‘Watch’ data. Now Arbitron gets this opportunity too. Or more accurately, its radio clients do. “For any company spending money on advertising, the buy-side data that we have is the proof point. It’s what they want,” said Calhoun.

Kerr said: “I can say very clearly that both the board and management at Arbitron are really excited about this opportunity and transaction. This is the best way forward for Arbitron – beneficial to the company and the customers we serve.”

But the benefits don’t only flow one way. Calhoun noted that the Arbitron deal “gives us a whole new medium to measure” – a medium that counts for an average of two hours of media consumption per person per day.

“Our strategy is all about consumers. We measure what they buy and what they watch – their interactions with all forms of media that influence their buying behaviour. So that extra two hours is a very big deal,” said Calhoun. Well worth the $1.26bn asking price, one assumes.