News notes

NetRatings, Inc., Milpitas, Calif., and Jupiter Media Metrix, Inc., New York, jointly announced that they have settled Jupiter Media Metrix’s pending patent infringement case against NetRatings. In a separate transaction, NetRatings has acquired Jupiter Media Metrix’s contracts for European Intemet audience measurement and certain related assets for $2 million in cash.

The patent infringement case settlement provides for the dismissal with prejudice of the litigation and a $15 million payment by NetRadngs to Jupiter Media Metrix. Under the terms of the settlement, NetRatings has acquired Jupiter Media Metrix’s patents for computer use tracking (United States Patent Nos. 6,115,680 and 5,675,510), and granted Jupiter Media Metrix a non-exclusive, assignable license to use the patented technology in its domestic Internet audience measurement business until June 30, 2005.

The license fee payable to NetRatings will be $125,000 per month for the period July 1 through September 30, 2002, and $375,000 for the fourth quarter 2002. For 2003, 2004 and the period of January 1 through June 30, 2005, the annual fee, payable quarterly, will be $1.5 million, $1.75 million and $1 million, respectively.

In addition, as part of the settlement, Jupiter Media Metrix has granted NetRatings a perpetual non-exclusive royalty-free license in certain proprietary software associated with the utilization of the patented technology.

Portland, Ore.-based Research Data Design, Inc. (RDD) has $2 million in its first round of strategic funding. RDD will use the funds to expand capacity at its market research centers, acquire additional facilities, build its sales team, and enhance its marketing efforts.

VNU is expanding the Nielsen brand name to all international markets and also linking the brand to the company’s global entertainment information businesses. The branding initiative will be a three-step process. First, Nielsen Media Research in the U.S. will be united with ACNielsen Media International in 40 countries under the brand name Nielsen Media Research. Second. the Nielsen name will also be co-branded with VNU’s entertainment information businesses under the Nielsen Entertainment umbrella, including ACNielsen EDI (to become Nielsen EDI), The National Research Group LNielsen NRG), VideoScan (Nielsen VideoScan), SoundScan (Nielsen SoundScan), BookScan (Nielsen BookScan). Broadcast Data Systems (Nielsen BDS), Entertainment Marketing Solutions (Nielsen EMS), and ACNielsen ReelResearch (Nielsen ReelResearch). Third, a new Nielsen visual identity/signature will be introduced as part of the re-branding initiative.

Acquisitions

Milpitas. Calif.-based NetRatings, Inc. has acquired New York-based DoubleClick Inc.’s @plan products and formed a strategic multi-year research partnership that provides for the integration of Nielsen//NetRatings and @plan research data into DoubleClick’s ad management products and services. Under the data license and integration agreement, Nielsen//NetRatings and @plan research will be integrated into DoubleClick’s DART and MediaVisor products. Nielsen//NetRatings and DoubleClick will also collaborate on the development of reach and frequency campaign planning tools.

Separately, NetRatings has acquired ACNielsen eRatings.com for $9.6 million in stock. The transaction allows NetRatings and eRatings to fully integrate their businesses, combining operations and consolidating their services under a global brand. ACNielsen eRatings.com, an Internet audience measurement company with operations outside the United States, is a joint venture 80.1 percent owned by ACNielsen and 19.9 percent owned by NetRatings. The companies jointly produce the Nielsen//NetRatings service which tracks audiences, advertising and user activity on the Internet globally.

Under the terms of the deal, NetRatings has acquired the 80.1 percent of ACNielsen eRatings.com that it does not already own for 749,341 shares of NetRatings stock, worth $9.6 million. VNU continues to own, through ACNielsen and Nielsen Media Research, a majority of the NetRatings shares outstanding and its designees continue to comprise a majority of the NetRatings’ directors.

Paris-based Ipsos has signed a letter of intent to acquire Sample-INRA Group, a German research firm.

Alliances/strategic partnerships

ACNielsen Media International has acquired the right to use Radiocontrol, a measuring technology developed by GfK subsidiary Telecontrol, for radio ratings in 19 countries in the Asia-Pacific region. Radiocontrol is an electronic meter, incorporated into a wristwatch, that measures radio and TV consumption. The system records all sound in the wearer’s environment on a minute-by-minute basis. Since January 2001, Radiocontrol has been commissioned by the Swiss radio and TV company SRG SSR id6e suisse for use in official radio ratings in Switzerland. The technology is currently being tested in other European countries, including Germany, France, the U.K., and Norway.

Arbitron Inc., New York, and comScore Networks, Inc., Reston, Va., have announced a collaborative effort to develop Internet measurement services for local media. Arbitron will meet with management of local media outlets, including radio, TV, cable, newspapers, Intemet content providers and advertising agencies, to enlist support for these jointly-developed metrics.

Taylor Nelson Sofres has formed a joint venture with Greek information and consulting services company ICAP A.E. The joint venture company, to be known as TNS ICAP A.E., will provide market information to clients in sectors including consumer,telecom, automotive, banking and finance. Taylor Nelson Sofres will enter into a licensing agreement with the joint venture, allowing TNS ICAP to use the group’s Branded Solutions in the Greek market. TNS ICAP will have 22 full-time employees and its main office will be in Athens. Taylor Nelson Sofres will have a 51 percent holding in the new company, with the balance being controlled by ICAP, which is putting its research division into the joint venture. The managing director of the joint venture will be Helena Chari, who currently heads ICAP’s market research division. In 2001, the division had revenues of approximately EUR 1.3 million.

Port Washington, N.Y., market information provider NPD INTELECT and the Global Technology Distribution Council (GTDC) have launched a new service, through INTELECT’s NPDTechworld unit, which provides market information for the IT and consumer electronics industries. Under the agreement, NPDTechworld and the GTDC will launch an industry-wide initiative to aggregate and publish sales data from the GTDC’s North American distributor members. In 2001, IT product and service sales from GTDC members were between $90-100 billion, representing approximately 70-80 percent of total domestic IT sales.

Wilton, Conn.-based Greenfield Online, Inc. has added Research Data Design, Inc. and Directions Research, Inc. to its partner program.

Campos Research and Analysis, Centennial, Colo., has become a certified QualPartner with QualTalk, a Castle Rock, Colo., online research firm. Campos Research and Analysis now offers its own branded version of online bulletin board qualitative research.

Association/organization news

(also see this month’s News Spotlight)

The European Society for Opinion and Marketing Research (ESOMAR) has initiated a research project, Marco Polo, aimed at gathering information on the needs of market researchers in client companies, now and in the future. The focus of the effort is on improving the understanding of ways in which marketing research providers and clients can work together to maximize the impact of marketing research.

The Marco Polo project is set-up in three phases. Worldwide in-depth interviews among large providers and clients were held during March and April. Preparations have started for conducting a global Web-based survey. The objective in this second stage is to obtain quantitative assessments and to test ideas on cooperation and future directions. Full results will be presented during the ESOMAR Congress in Barcelona on September 22-25.

After September a third phase will be carried out, involving building scenarios and outlining their implications. Emphasis will be on developing actionable plans for better cooperation, enabling providers to help improve the clients’ research function.

During the RELEAS Research Leadership Summit process, organized by the Advertising Research Foundation and ESOMAR, industry leaders discussed ways to strengthen cooperation between clients and providers in the industry. While quite a lot is known about the supply side of the industry, up-to-date insights on the client side are lacking. So they agreed to put especially strong focus on initiatives to strengthen the role of market researchers within client companies.

The need for closer cooperation between clients and providers in the research industry is prompted by significant changes in demand. Companies require different services from market research firms than before. New types of demand arise from developments such as globalization and tougher competition. New technologies and the availability of new data collecting mechanisms, among other things, also multiply the need for change. Researchers working on the client side are in the best position to share insight on the type of business information that companies need.

Awards

The Indiana Information Technology Association (INITA) named Walker Information, an Indianapolis research firm, as a finalist in the Services Provider category of the 2002 CyberStar Awards contest. The awards recognize firms that provide assistance for information technology companies to achieve success. Walker Information shared the finalist honor with Professional Staff Management, while the selection committee selected Grow Indiana Media Ventures as the winner.

New accounts/projects

CCS Online, a Fairfield, Conn., business software development company, has announced an agreement with Nielsen Media Research to license CCS’s ResearchExec product for all of the company’s Internet research in the future. ResearchExec allows users to manage, produce and analyze a range of Internet-based research projects and campaigns, including customer satisfaction, employee surveys, business market studies, field research, clinical trials, and packaging testing, among others.

New companies/new locations

Millward Brown Spain and Iberautor have created a new company, CIMEC Millward Brown, offering research and consultancy services to Spanish clients in the entertainment, leisure, and culture businesses. The new company will have a staff of four and be based at Millward Brown Spain’s offices at Alcala 474, Madrid.

A new research firm, Inner Bilbao, has opened in Bilbao, Spain. The facility includes qualitative studio facilities with client viewing room, simultaneous translation, and videoconferencing equipment.

Chicago-based Research International, USA, has closed its Miami office and moved its New York City office to Stamford, Conn. The Miami office of Research International was the smallest in the domestic network, with five full-time staff members. All clients of this office have been reassigned to other offices. Mark Willard, executive vice president of the NYC office, will retain his leadership position as head of the Stamford office. All NYC office staff are expected to move to the Stamford office. The address/telephone of the new Stamford office is Research International, 3 Landmark Square, Stamford, Conn., 06901.

Company earnings reports

In the first three months of 2002, Germany-based GfK Group increased its sales by 19.8 percent from EUR 107.6 to 128.9 million. EBIT including income from participations rose by EUR 2.4 million to EUR 5.6 million. The return on sales rose from 3 to around 4.3 percent. The GfK Group is publishing its quarterly figures under the United States Generally Accepted Accounting Principles (U.S. GAAP) for the first time in 2002. The financial statements are therefore only comparable to a limited extent with the figures published for the corresponding period in the previous year, which were prepared in accordance with the provisions of the German Commercial Code (HGB).

The Consumer Tracking division maintained its sales compared with the same quarter in the previous year and reduced its loss. In the Non-Food Tracking division sales rose by almost 9 percent. Around 50 percent of this is accounted for by companies that were not included in the scope of consolidation in 2001. There was an overproportional rise in operating income to EUR 3.1 million compared with sales. The conversion to U.S. GAAP only had a minor impact.

In the Media division both sales and operating income had double-digit growth. The increase is based on two factors: on the sales and income contributions of GfK subsidiary Intomart Benelux, Netherlands, in the first quarter of 200!, which was not consolidated under U.S. GAAP and the companies Telecontrol Group, Switzerland, and Metris, Portugal, which were consolidated for the first time on July 1,2001.

Sales by the Ad Hoc Research division exceeded expectations and operating income was more or less on target. The sharp increase in sales to EUR 55.6 million and operating income to EUR 1.4 million is essentially due to the newly consolidated companies GfK Macon, Germany, and Martin Hamblin GfK, United Kingdom.

Milpitas, Calif.-based NetRatings, Inc. announced a reduction in its previously announced first quarter loss due to acquisition-related subsequent events. A discussion of these subsequent events, as well as the company’s complete financial results for the quarter, are presented in the company’s Form 10Q.

On October 25th, 2001, the company had proposed acquisitions of eRatings and Jupiter Media Metrix. These transactions were subsequently terminated during the first quarter. On May 7th, 2002, NetRatings completed and announced acquisitions of eRatings and the European audience measurement contracts of Jupiter Media Metrix subsequent to the reporting of financial results for the first quarter. Consequently, $2.2 million of the acquisition costs, previously disclosed in the company’s financial tables as expenses, have now been capitalized because of the relationship between the recent acquisitions and the terminated transactions.

Additionally, in connection with the eRatings acquisition, NetRatings will now be utilizing a portion of the leased space previously included as restructuring expenses. The co-location of eRatings with NetRatings will enable the company to service its clients under a common brand, with a unified team and shared infrastructure. The restructuring expense is now reduced by $876,000 to $7.0 million.

The combined effect of the capitalization of acquisition-related expenses and the reduced restructuring expenses resulted in a GAAP net loss of $14.6 million, or a net loss per share of ($0.45), which is an improvement from the GAAP net loss of $17.7 million, or a net loss per share of ($0.54) previously reported on April 30th.

News spotlight

European research alliance created

The European Society for Opinion and Marketing Research (ESOMAR) and the European Federation of Associations of Market Research Organizations (EFAMRO) have decided to create the European Marketing Research Alliance (EMRA).

The key objective of the initiative is to protect the value of marketing and opinion research in Europe by lobbying against legislation hindering the research process and also promoting legislation that ensures respect is maintained for individual privacy.

The EMRA will represent industry interests at the European level and will, where necessary, support national organizations for marketing and opinion research at a local level. Main activities will, among others, be to monitor potentially restrictive in the EU member states and to develop effective responses and also to promote the benefits of market research to the consumer and society.

As legislation and privacy issues increasingly become global, sharing effective know-how with organizations in other regions such as the U.S. under the umbrella of the Global Legislative Initiative, established earlier this year, will be a key component of EMRA activity.

ESOMAR and EFAMRO have reached an agreement with the World Federation of Advertisers (WFA) in Brussels on sharing certain WFA resources and support from outside professional agencies and specialists.

This will guarantee cost-effectiveness, speed, and quality of response in representation activities. At the moment, ESOMAR and EFAMRO are in the process of finalizing the terms of reference of the EMRA.  Also a legal committee for day-to-day activity management will be created as well as a funding committee. ESOMAR will provide financial support for the initial phases of the program. A detailed activity plan will be made available in September.

“This effort is of paramount importance for the profession,” says John Kelly, ESOMAR president. “Effective legislative representation and promoting high standards of performance are some of the cornerstones of ESOMAR’s mission. I appreciate the cooperation with the WFA. Our focus might be different in a number of areas. However we share the commitment to freedom for information, self regulation, and professionals worldwide.”

Earlier this year, world leaders at the research summit in Geneva (RELEAS) agreed to establish a global legislation initiative. Building capability in Europe was identified as a key priority. As a further indication of global importance, the U.S.-based Council for Marketing and Opinion Research recently held discussions with organizations in both Mexico and Canada and they will be creating a North American capability. This will also be well-coordinated with the EMRA.