BATAVIA, Ohio (AdAge.com) -- Nielsen Co. has struck a deal to combine its TV ratings and online-audience measurement data with Catalina Marketing's loyalty-card purchase data in a joint venture they claim can increase efficiency of the package-goods industry's $20 billion in media outlays by at least 10%.
Nielsen Catalina Ventures, which expects to begin selling data by mid-2010, is the latest in a long line of efforts to create a single-source database that measures sales impact of media spending.
The holy grail
Of course, the road to a single-source holy grail is littered with wreckage, with the biggest failure to-date being Nielsen's Apollo joint venture with Arbitron. But the particulars of Nielsen-Catalina combination could make it different this time.
Apollo aimed to create a nationwide panel of people carrying Arbitron's portable People Meters to monitor a wide array of media consumption, using handheld scanners to track purchases. But not enough clients were willing to foot the six- to seven-figure annual bill for the labor-intensive solution, and the two companies pulled the plug last year after investing more than $50 million combined.
Others have turned to less-ambitious, expensive or intrusive data-collection systems, including TRA, which combines data from set-top TV boxes in more than 370,000 households * with purchase data from shopper cards.
Nielsen Catalina promises something in between -- more comprehensive than TRA but less expensive or labor-intensive than Apollo. The 40,000 to 45,000 members of Nielsen's TV ratings panel and 230,000 members of Nielsen Online's panel won't have to use scanners. Their purchase data instead will be tracked through their shopper cards, with the data integrated by a third party and masked to keep their purchase history anonymous.
Unlike TRA, which currently sells only TV-related data tracked only at the household level, Nielsen Catalina will collect both TV and web data at the individual level through Nielsen's TV and online panels.
Nielsen rival ComScore also has worked with Dunnhumby to combine web audience and shopper-card sales data for research projects in the past two years, but that collaboration doesn't extend to TV.
Nielsen already tracks sales impact of TV and online ads using a subset of its media panelists who are also HomeScan households, but adding the shopper data from Catalina increases the number of single-source households several times over, making it possible for smaller brands and sub-brands to get statistically significant data.
"You get a significantly larger view, which opens up the potential for a lot more campaigns you can accurately measure with more granularity and more geographies," said Mike Nazzaro, CEO of the joint venture.
Ultimately, Nielsen Catalina Ventures looks to add data from other media, Mr. Nazzaro said, including from Nielsen's mobile panel and from set-top boxes. "The vision for the joint venture," he said, "is that we really want to expand across all media."
Far from perfect
It's still far from perfect information. Catalina's database of 54 million loyalty-card users doesn't include data from big retailers such as Walmart, Target or Costco. Nielsen Catalina Ventures looks to get around that in part by using data and analytics from Nielsen's HomeScan household panel, Mr. Nazzaro said.
Nielsen Catalina will be owned 50% by each privately held company and based in Cincinnati, Mr. Nazzaro said, with additional staff in the Chicago, New York and Tampa, Fla., areas where the two companies both have offices.
For Mr. Nazzaro, who joined fellow Procter & Gamble Co. alum Pete Blackshaw 10 years ago to help launch consumer-feedback site PlanetFeedback.com, it's a return to startup mode.
In between, through a series of mergers and acquisitions, Mr. Nazzaro became CEO of buzz-tracker IntelliSeek, president and chief operating officer of Nielsen Online and later president of Nielsen's HomeScan and Spectra units before starting work on this venture more than a year ago.
He expects Nielsen Catalina Ventures data to be purchased primarily by consumer package goods marketers and displayed dashboard-style on their desktop computers, though he thinks agencies and media companies may also be customers.
The importance of targeting
Tracking return on investment is a selling point to be sure, but Mr. Nazzaro views targeting as at least an equal draw. Using the shopper data, brands can target their TV or online buys to brand switchers, competitive users or their own lapsed users. "It adds the whole dimension of purchase-based groups," he said.
He's not sure that will change the currency of media deals, though he believes some might evolve to include secondary guarantees around sales lift or specific behavioral segments rather than the traditional eyeballs or age-and-gender demographics.
Catalina in recent years increasingly has looked to leverage its shopper database for research -- with its Pointer Media Network finding on average only 2% of shoppers account for 80% of a package goods brand's sales. Before now, the main way Pointer offered to find that 2% was through Catalina's Checkout Coupon system or retailer loyalty programs. The Nielsen partnership extends that targeting capability in theory to TV and online media -- though it will help if, say, brand switchers actually do gravitate toward particular TV shows or websites.
"The ability to understand how advertising influences how consumers shop and what brands they buy continues to be an important question" for Hershey North America, said John Bilbrey, president of the unit, in a statement, adding that he looks forward to working with Nielsen and Catalina to answer that question.
Much of the demand for better data comes because times are likely to remain tough for the foreseeable future, said Mark Leiter, Nielsen's president-professional services and a member of the joint venture's board. "We think consumer demand is going to contract," Mr. Leiter said. "All the research we've done ... suggests consumers are going to pull back because unemployment is going up, incomes are flat and availability of credit has shrunk. That continues to have clients asking us, 'How do we get that next analytical edge?'"
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CORRECTION: An earlier version of the story indicated TRA's single-source panel was only in California. It is national.