The biggest research company came apart. Another among the elite sold much of itself to end up a direct response and research combine. A tidal wave of technology kept coming at the industry, so much so that the telephone seems archaistic-bound. Revenues kept surging.
To be sure, like resolute cinema protagonists, the research industry is feeling change, but is finding it a bonding experience rather than a disaster in the making.
"This is a heady time for market research," says Charles Hamlin, exec VP-interactive business at NFO Research, adding, "technology is going to provide great opportunities and challenges."
The numbers explain such euphoria. U.S. research revenue this year from the Top 100 research companies rose 9.6% to $4.04 billion, and 9.9% worldwide to $6.52 billion, according to the 22nd annual Advertising Age 100 Leading Research Companies report.
The U.S. count is down from
Top 100 post impressive growth
last year's record-high 11.3% surge, but still well beyond the annual single-digit gains dating from the last decade.
Change began at the top where Information Resources Inc., with research revenues of $344.6 million, up 8.5%, supplanted last year's leader Nielsen/IMS International, which has been reconfigured.
The Nielsen of past years is dispersed into three companies in this report: ACNielsen Corp. is largely the warehouse-removal tracking service; Nielsen Media Research, the TV ratings service, and IMS, the pharmaceutical-tracking company. The latter two are part of Cognizant Corp.
Last November, Dun & Bradstreet spun off its research business es into ACNielsen Corp. and Cognizant Corp., both publicly held.
Cognizant, reporting worldwide revenue of $1.73 billion in '96, up 14.7%, also is parent of several software-based providers as well as 50%-owner of Gartner Group, not in this report because much of its information technology business is not research-oriented.
GREATER STRENGTH OVERSEAS
In past reports, Nielsen numbers were a consolidation of IMS and the eponymous warehouse-tracking service and the media-related company.
ACNielsen, at $1.36 billion revenues worldwide, continues its dominance as the world's largest research company. Of its total, only 20.7% came from the U.S.; 44% came from Europe; 19% from Asia-Pacific; 13.7% from Canada and Latin America; and 2.6% from Japan. IMS ranked second worldwide at $904.4 million; its non-U.S. component also is much larger than its domestic business.
International activity not only grew, but more Top 100 researchers have added an international side to their business mix. Just over two-thirds of the Top 100 reported non-U.S. activity vs. 52% last year. Non-U.S. total revenues for the Top 100 advanced to $2.56 billion, increasing 11%; that compared with 19.2% a year ago.
Growth rates in '96 were affected by the advance in the dollar against leading European currencies, Canadian dollar and yen. Industry maturation abroad also may be checking the double-digit surges of the past.
Scanning retail sales and counting audiences continue to produce the biggest dollars in research. But customers are now saying they want meaning behind the numbers.
"We have just finished an in-depth survey," reports Gian Fulgoni, CEO of IRI, the leading U.S. provider of electronic point-of-sale purchase data. "They are pressing us to do a lot more than handle information. They want to know, 'What use can we make of the information? How can we solve problems?'
WHAT TO DO WITH DATA
"With all the technology available," he adds, "someone has to translate [the scanner readouts] to action solutions."
The best way to get from a simple count to broader meaning, Mr. Fulgoni believes, is to metamorphose from sample to census-not just counting a few out of the many but counting all.
Census will replace the sample of sales transactions, he predicts, noting census is "more accurate, more comprehensive, gives finer granularity, that is, a store-by-store closeup of business activity."
Nielsen looks through its client-satisfaction glass and finds that it, too, is being asked to give subscribers the bigger picture. But Chairman-CEO Nicholas Trivisonno, doesn't think the issue is 'census vs. sample': "A blending of both gives clients the best services. The best projectable metric is the sample."
He says the major question at Nielsen is how to deliver insights, a term for information that helps clients understand why consumersmake particular decisions.
Technology undergirds this process. The Homescan panel with its household scanning device were introduced in 1996 and is expanding to 52,000 homes by year-end. It tells who buys what and when.
"It helps supplement scanner data with information on customer attitude and behavior," says Mr. Trivisonno.
SCAN KEY EXPANDING
IRI is using a similar device it calls Scan Key, initially in 15,000 homes and scheduled for 10,000 more in 1997.
Technology like this adds speed and sharpens the viewing of focus groups and advertising, as it also counts sales and measures audiences and readership.
To help researchers and clients look at radio audiences as something more than numbers, Arbitron Co. has developed its MapMaker system, which is used with personal computers to produce displays of listener locations, zooming from whole metro regions to a particular street.
Work continues at Arbitron on its Personal Meter for counting radio audiences (TV may be in the future). The prototype is the size of a beeper, worn on a user's belt, and picks up inaudible codes from participating stations, allowing its use even in noisy surroundings. At day's end, it's downloaded to a decoder and recorded on a chip.
Pretesting Co. continues development of its Passive Meter for TV audience measurement. CEO Lee Weinblatt says the company will be ready by year-end to put it in use. The meter is about the size of a garage-door clicker.
Pretesting also is developing an automated music-listening system that inserts a code in all recorded music for pickup by its detectors. This would eliminate the dial-and-listen method that often doesn't detect radio airplay.
Nielsen Media Research, under pressure by broadcasters and advertisers to improve audience measurement, is preparing for the FTC-mandated coming of digital TV by introducing the Active-Passive Meter for compressed TV, the new technology that will allow multiple channels to be broadcast on a single signal.
The challenge of compressed TV, says Jack Loftus, VP-communications, will be measurement of audiences with vastly increased choices. In two years, AP meters and other measuring devices will require a code embedded in every program and commercial to tell the meter what is being watched. Viewers using the A-P meter are the "active" part, but even if some human or technical glitch drops the code, "passive" remote monitors will detect the household's TV viewing, essential to assure accurate measurement.
Answering challenges to its present sampling and diary methods of taking measurements and collecting data, Nielsen Media has boosted its national sample size 25% to 5,000.
With participation in surveys at all-time lows due to survey-overload, Nielsen Media no longer tries to find the typical respondent type. At the potential respondent's front door, Nielsen Media's interviewer now says, "Your participation is needed for good research," instead of "Here's your chance to talk back to TV!"
Recruitment wins started at 60% to 65% and have now moved up to 70%, says Mr. Loftus.
info captured earlier
Source Informatics, with part-ner National Data Corp., has introduced DirectRx, a prescription-sale reporting program that speeds measurement of prescription sales to just 36 hours from the present seven to 10 days. The secret: DirectRx captures the sale data before it passes into the third-party payment network.
Computers and high-tech aside, research companies like Macro International are finding new routes to snag data. Macro uses the sides of dairy packaging. For example, when rBST bovine growth hormones were given to cows a few years ago, Macro was called in to test people's perceptions about the hormones.
In 400 intercept interviews in Vermont shopping centers, Macro displayed containers for milk, cheese and yogurt with labels noting the contents came from cows that had received rBST.
Consumers were then asked if this would keep them from buying the product, if they thought this meant the product itself contained rBST, or if they even noticed the rBST tag, says James Dayton, Macro's director of project management.
There is always room for another research niche. Edison Media Research found it in music testing for the radio and music industries.
"Edison researches the sale of CDs on TV," says VP Joe Lenski, "and for radio, it tests for the measure of burns-how many times a record has been played-and whether it's toasted-played too often, burnt out."
Edison Media now serves 90 FM and AM radio stations in 65 markets.
For BAIGlobal, the niche was direct response. "Not a lot of people in research are working in direct response. There's little competition," says President Kathleen Knight, "and the direct-response industry needs more research information."
Research and direct response are bedfellows in the new-business configuration taking hold of Harte-Hanks Communications. Direct response is now driving most of that organization as the media company is selling off its communications properties.
Harte-Hanks is raising capital to purchase four or five more companies in the direct-response field.
Each new acquisition is a boost to the research side of the company, says Harry Seymour, president of Harte-Hanks Market Research, because with each addition comes a new set of captive clients.
MMRI, a leading provider of customer and syndicated studies on the auto industry, has hired Chris Cedergren, veteran auto-industry consultant, to operate its new division, Nextrend. The sole purpose of this division formed around Mr. Cedergren is to project the auto industry five to 10 years down the