VNU Outlines Outdoor, 'Apollo,' Other Measurement Plans

With great aplomb, the top executive of VNU's media measurement group, the parent of Nielsen Media Research, told a group of Wall Street executives how the company orchestrated a series of ventures, mergers, and divestitures to emerge as the dominant provider of media research services in the United States and abroad--suggesting that it is poised to get bigger still.

With about $1.4 billion to spend on acquisitions or new ventures, Michael Connors, chairman-CEO of VNU Media Measurement Group, said the company was prepared to invest in several key areas for growth:


* The rollout of local people meters in top U.S. TV markets
* Expansion into new international markets
* Development of a product placement measurement service
* Development of a sports sponsorship measurement service
* Development of a video game advertising measurement service
* Expansion of an online consumer marketing panel to complement Nielsen//NetRatings online audience measurement service
* Development of a national single source product and media measurement with Arbitron dubbed Project Apollo
* Development of an electronic audience measurement service for outdoor media

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Following VNU's recent sale of its European directories business, Connors said the company has emerged as a "pure play" media and information company, with 80 percent of its revenues derived from marketing and media research services--up from 70 percent prior to the sale.

Technology looms large in Nielsen's expansion plans, especially the development of Nielsen Outdoor, which is based on an electronic beeper-like device dubbed the Nielsen nPod, which utilizes advanced global positioning satellite technology capable of determining not just how many people are exposed to outdoor ads, but exactly who they are.

"We are gearing up for a multi-market expansion starting next year," Connors told attendees during a VNU briefing at UBS Warburg's Media Week conference in New York on Tuesday. He added that the development of such a system could dramatically expand outdoor media's share of advertising budgets.

"Our view is that a medium that is not measured is a medium that is undervalued. This is why we went after the outdoor space," said Connors, boasting that the new Nielsen service is "going to change how outdoor advertising is bought and sold."

Connors also offered new clues to what is potentially VNU's most ambitious project, the creation of the 70,000-household single source measurement panel that would be the basis for Project Apollo.

Asked how VNU could move forward with such an aggressive rollout of the system, which would rely on Arbitron's portable people meters (PPM) even as it stalls the development of a TV and radio ratings joint venture with Arbitron based on the same PPM technology, Connors said, "The reason why is this is not media research-ready. He pointed out that Project Apollo would use different, ostensibly less rigorous methods to recruit its panel than what would be used by an Arbitron/Nielsen media ratings venture.

"We will do almost all of our recruiting via the Internet," shared Connors, adding that it would be an "opt-in" panel versus the kind of complicated random digit dial telephone-based recruitment that would be used to build the media ratings panel.

"There is a big distinction between marketing and media research and all of its techniques," said Connors.

He also confirmed that Nielsen has yet to agree to support Arbitron's test of the PPM system in Houston, a move that some critics believe is hurting the test's chances of gaining support from some broadcasters in the market.

Despite this, Connors characterized VNU's relationship with Arbitron as "good," and noted that Nielsen has already invested $20 million of support behind the testing and development of the PPM system.

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