ALLIANCE EYED TO MERGE RATINGS RIVALS: P&G, GM, NBC, WPP, TBS AND IBM IN TALKS ABOUT CONSORTIUM

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Procter & Gamble Co., General Motors Corp., NBC, WPP Group, IBM Corp. and Time Warner's Turner Broadcasting System are in preliminary talks about forming a consortium to invest in -- and possibly combine -- rivals Nielsen Media Research and Statistical Research Inc.'s Smart.

That outcome would be the most dramatic of the discussions, although it is just one of several scenarios being weighed.

Any of them, however, could significantly affect the TV audience measurement systems that influence billions of dollars in annual ad spending.

TESTING IN PHILLY

Smart is now testing in Philadelphia and is seen as a potentially strong rival to Nielsen. Some executives, however, see possibilities for combining Smart's technology and Nielsen's database through a joint venture.

Gale Metzger, president of SRI, said he is having numerous meetings in the coming weeks, but he declined comment about specific discussions.

Asked if Nielsen could be involved in Smart's future plans, Mr. Metzger said, "I don't rule anything out." To date, Smart has received about $40 million in funding, primarily by ABC, CBS, NBC and, to a lesser extent, Fox.

In the last two months, Mr. Metzger has asked various ad agencies if they would ante up $1 million apiece to back a Smart rollout, but agency executives said he's been rebuffed. A full-blown rollout of Smart as a Nielsen competitor would

likely cost at least $100 million.

SPINOFF PROMPTED POSSIBILITY

A solution involving a joint venture with Nielsen became feasible when the media researcher announced it is being spun off from Cognizant Corp. this summer as a separate, publicly held company.

Asked if Nielsen is having discussions with other companies, VP-Communications Jack Loftus said, "We can neither confirm nor deny anything of that nature."

WPP, parent to J. Walter Thompson Co., Ogilvy & Mather Worldwide and Conquest Europe, already owns Simmons Market Research Bureau.

Executives familiar with the talks said the idea would be to include other networks, agencies and marketers as equity partners in whatever plan may result from the talks.

The involvement of cable giant TBS in the discussions is notable because the company has been publicly skeptical of Smart, primarily because Smart has been funded by the Big Four broadcast networks.

Separately, ad agencies are still debating the formation of a joint industry committee that would decide on standards for audience measurement and put out a proposal request to vendors. Advertising Research Foundation's chief lawyer has told agencies that such a joint-industry committee would be illegal, although attorneys for American Association of Advertising Agencies disagree.

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