• by Joe Mandese  @mp_joemandese, March 12, 2004

The Federal Trade Commission has quietly ended an inquiry into how Nielsen Media Research conducts business with Madison Avenue, and the federal agency plans to take no action, MediaDailyNews has learned. The inquiry was initiated at the request of the American Association of Advertising Agencies, whose members complained that Nielsen's pricing practices were anti-competitive and its control over TV ratings data access was constricting how they plan and buy media.

Ironically, the issue that triggered the probe--Nielsen's new aggressive policies with so-called third-party processors--has also been quietly resolved. Nielsen has signed new contracts with all of the major third-party processors--companies that help analyze, manage, or reinterpret Nielsen data for ad agencies.

The resolution of the FTC inquiry and the settlement of the third-party licensing agreements indicate that Nielsen has won a key battle for control over its data. It also means that ad agencies will have to pay additional fees related to how third parties process Nielsen data on their behalf.

"We're now paying them yet again for data we already paid them for," said one frustrated media agency research director. While Nielsen is not explicitly charging agencies an excise fee for third-party processing, it is charging those processors new fees that those companies are billing back to agencies.

Another contentious element of the third-party agreements required processors to disclose how they utilized Nielsen's data in reprocessing, a step some agencies felt encroached on their rights to confidentiality.

While agencies continue to chafe over the issues, Nielsen apparently has smoothed them out with the processors themselves. The company has scheduled its first client meeting with third-party processors for May in Tampa, Fla., near its data processing headquarters.