ANA's Perspective on Nielsen’s Acquisition of Arbitron

February 12, 2013

By Bill Duggan, Group EVP, ANA

Since Nielsen announced its plans to acquire Arbitron in late December, ANA has been listening to industry perspective – from our members, analysts, agencies, other associations as well as the coverage in the trade press.  Here’s where we are coming out: ANA’s position is that there is no reason to oppose Nielsen’s acquisition of Arbitron; but meanwhile, there are some valid concerns.

Here’s why we are not opposed:

  • Arbitron’s business is primarily in the United States, with a concentration in radio. Nielsen is a global company, operating in over 100 countries.  So we need to look at this acquisition from a global perspective, rather than simply a U.S. view.
  • There has been a focus on cross-platform measurement in our industry and the Nielsen/Arbitron combination could enhance that.  One article in the trade press noted, “… the real value in Nielsen acquiring Arbitron is that the IP developed for better radio measurement will actually have a profound positive impact on its cross-platform measurement initiative.”  A single-source cross platform media measurement system would be a good thing!
  • Arbitron hasn’t been in the television measurement business since 1993.  That’s twenty years!  It’s been a long time and no serious competitor has emerged to Nielsen for television audience currency.  So we don’t understand the validity of the “lack of competition” concern raised by some in the industry, particularly as it relates to measurement currency. (2/14 addendum: Since posting this blog, some in the industry have correctly pointed out that there are indeed companies providing currency alternatives to Nielsen.)

While ANA doesn’t oppose Nielsen’s acquisition of Arbitron, there are nonetheless valid concerns:

  • Nielsen has had a long-standing reputation for sometimes moving too slowly.  This acquisition would now significantly consolidate media measurement power into one single provider and we would hope that would not delay forward movement.
  • Only Nielsen and Arbitron measure “people” demographics (versus households)—Nielsen via its People Meters and Arbitron via its Portable People Meters.  If Nielsen indeed acquires Arbitron, there would be no other company in the marketplace able to measure individual age and gender demographics with such scale.
  • In a qualitative survey among ANA members we heard comments related to limiting competition, stifling innovation, and the potential for higher pricing from those who expressed concern about the acquisition:
    •  “Lack of competition will be harmful to the continuing progress needed in audience measurement.”
    • “Even more of a monopoly; pricing concerns.”
    • “It reduces competition and Nielsen is huge already.”
    • “Nielsen has a complete monopoly in this space, and Arbitron was the only other hope for potential competitive playing field. There are already so many delays in this space, and with more control under Nielsen’s ‘house’ it will only disadvantage the industry.”
    • Monoculture is bad for any industry, at any time. It's particularly bad right now given the shift to multi-screen consumption. We are in an industry that needs market forces pushing measurement companies to consistently ask "is this really good enough"?

It’s important to note, in this qualitative survey, half the respondents had “no concerns” and half had either “some concerns” or “serious concerns” about the acquisition. So opinion was clearly split.

At the recent ANA Commercial Ratings Summit (http://www.ana.net/conference/show/id/CRSUMMIT12) we heard from five very innovative companies, besides Nielsen, who may offer solutions for brand-specific commercial ratings: Invidi, Precision Demand, Rentrak, Simulmedia, and TRA.  These companies can do amazing things. We would hope that the Nielsen acquisition of Arbitron does not stifle innovation from these and other companies.

In closing, we expect that the Nielsen acquisition of Arbitron is a situation where 1+1=3, as combining technologies and processes may enhance some capabilities that the industry needs.

 


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