Nielsen and IRI Team Up to Use Single Pool of Panelists

Could It Lead to Collaboration on Retail Scanner Data?

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BATAVIA, Ohio (AdAge.com) -- Longtime research rivals Nielsen Co. and Information Resources Inc. are burying the hatchet to use a single national pool of households for their consumer panels, forming a joint venture that creates a sort of public utility for measuring such things as the buying habits of Walmart shoppers.

The alliance between the once-bitter rivals, who spent nearly a decade in anti-trust litigation starting in the 1990s and continuing into this decade, also appears to open the door for deeper collaboration that could have a huge impact on the costliest product in the market-research business: retail scanner data.

Asked in an e-mail whether the alliance on consumer panels could lead to alliances in other areas, such as scanner data, a Nielsen spokeswoman said the companies have "no specific plans at this point, but we're open to collaboration opportunities that make sense for our clients and our business."

The deal allows Nielsen and IRI to jointly recruit and maintain their consumer panels, each with more than 100,000 members.

Increasing importance of panels
Those panels have become increasingly important since 2001, when Walmart Stores decided to stop providing scanner data to syndicators, including those two companies and others such as NPD Group.

Since then, consumer panels have been the only way most companies and outside observers can fully track sales at the country and world's largest retailer.

Each company will continue to release its individually branded reports, drawing from and analyzing a common pool of consumers and raw data. That should allow for cost and quality gains that will benefit clients.

But the idea isn't to create a bigger panel, the Nielsen spokeswoman said. "Our clients have been telling us that it's the analytics that matter," she said. "We believe future breakthroughs in consumer and shopper insights lie with integrating strong panel-data resources and formulating analysis and insights based on those resources" vs. adding more panelists.

Under the terms of the deal, the panel will initially consist of the Nielsen panelists, to be replaced by members of the IRI panel as those panelists quit or age out of the Nielsen panel. Nielsen will initially have access to 100% of the households in the Nielsen panel, while IRI will have access to 86%. After two years, IRI will have the option of getting access to 100%.

Possible challenges
Clients prefer to have panelists with a five-year history for comparison purposes, said Gregg Ambach, managing director of the Cincinnati office of Analytic Partners. With attrition rates among panelists averaging around 30% annually, that would mean the two panels would effectively be fully merged in two years, allowing for recruitment of additional panelists in the meantime to help maintain a sample of at least 100,000 with five years of purchase history.

While the combination appears to offer some advantages, Mr. Ambach said big differences in computerized systems between Nielsen and IRI could pose significant challenges.

Additionally, IRI's RxPulse Patient Panel prescription data will become available to Nielsen, with new members to be recruited by the joint venture. Nielsen will continue to be sole provider of its Hispanic specialty panel.

The combination of panels could theoretically create some anti-trust issues, said Washington antitrust attorney and former Federal Trade Commission official David Balto, but he said it's unlikely to be challenged. The only parties who could possibly be adversely affected by the combination would be consumer panelists themselves, who might see lower compensation with one fewer research firm bidding for their services he said. But as few if any consumers rely on the panels as their sole livelihood, and several other panels also exist, he said the combination is unlikely to pose anti-competitive issues.

Combining forces on the scanner data front, however, could pose deeper problems, as a similar arrangement two decades ago was ultimately ended on antitrust grounds. Such a combination could also result in lower compensation to retailers for their data.

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