Exclusive: Media shops blast Nielsen price increases

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Media agencies are charging Nielsen Media Research with anti-competitive behavior and are pressuring the American Association of Advertising Agencies to take their complaints to the federal government.

The charges come as Nielsen introduces contracts for third-party firms that produce proprietary reports for media agencies using Nielsen data. New contracts call for the firms to pay higher prices and are believed to restrict how Nielsen data can be used. Nielsen also wants to see the reports generated using its data.

"We have to go after this. What they are doing is anti-competitive," said Jon Mandel, co-chief executive of Grey Global Group's MediaCom and a member of the Four A's media policy committee. A Nielsen spokesman denied the charge.

The Four A's has prepared, but not yet submitted, a brief that asks the Federal Trade Commission to examine the situation since Nielsen is the only supplier of U.S. TV ratings data to agencies. A Four A's spokesman had no comment.

The Federal Trade Commission is routinely petitioned by businesses that feel they are injured by allegedly anti-competitive practices of rivals or suppliers. But such a step would be unusual for the Four A's, which typically champions conflict resolution through private self-regulation programs.

Major media agencies can pay upward of $1 million a year for Nielsen ratings data.

Prior to the new contract, third-party firms working for an agency that was a Nielsen client could obtain the data as part of the agency's contract. Now Nielsen wants those firms to pay fees for the data as well. Agencies said they are effectively charged twice for the same information.

Companies such as Donavan Data Systems are hired by media agencies to merge Nielsen data with that from other databases such as product-usage research or newspaper-readership figures-a method for determining media plans known as "fusion."

death of fusion?

"This could mean the death of fusion. It has major ramifications," Mr. Mandel said. "What they are asking us to do is to give proprietary information about our business, our clients' business, and their competitors and what they are doing with the numbers. They have no business knowing that. These are trade secrets. I believe the Four A's should and will take this to the government," he said.

Nielsen's spokesman said the company merely wants to be compensated for the additional resources needed to service third-party firms, and insisted the price increase was modest.

"As the cost is passed along perhaps the third-party companies are inflating the numbers. We supply these firms with a lot of data they were getting for free. It requires us to spend more time and resources to provide and explain these numbers," said Nielsen Senior VP-Communications Jack Loftus. He said he thought the issues had been resolved at a meeting in July between Nielsen and the Four A's. Nielsen, he added, does not want to examine proprietary data but needed access to reports to understand how to price its services.

"There are no incremental costs to them," Mr. Mandel countered. He said Nielsen's move could set back the media-research industry in the U.S., which he said lags behind competitors on other continents.

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