Media Research Industry Poised To Realign As MRI Parent GfK Goes Into Play
- by Joe Mandese @mp_joemandese, August 25, 2016
With all eyes peeled toward
financial questions surrounding one of the largest media researchers -- comScore -- another biggie, Germany’s GfK, reportedly has put itself on the block. According to a report by
Germany’s Wirtschafts Woche, both Nielsen and WPP’s Kantar -- the No. 1
and No. 2 media research suppliers -- as well as market researcher IMS Health, are eyeing GfK, which is the parent of Mediamark Research Inc. (MRI), the dominant provider of magazine and other
media-planning research data in the U.S. marketplace.
Kantar denied the report, according to a follow-up report by Bloomberg, but shares of GfK’s stock were soaring this morning in European markets based on the speculation that one of the majors might acquire GfK.
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GfK’s future adds another dimension to a rapidly-changing media research marketplace, long dominated by Nielsen with fits of market traction by various players, including Kantar and comScore.
comScore, which has had an inexplicable delay in its financial reporting, recently shook up its senior management team, and earlier this week WPP announced it was taking a writedown on its minority stake in the company.
NASDAQ, which trades comScore’s public shares, has given comScore until Monday to comply with its quarterly and annual financial reporting requirements.
Despite its write-down, WPP actually increased its stake in comScore, buying additional shares when they dipped following comScore’s management shakeup on Aug. 11. According to a report by The Wall Street Journal, WPP boosted its stake to 19.2% from 18.6% of comScore’s shares.
When WPP announced its investment in comScore in February 2015, it said it would end up owning between 15.0% and 19.9% of comScore.
While it’s difficult to isolate pure-play media measurement services from pure-play marketing research, WPP’s Kantar most likely ranks No. 2 behind Nielsen, with GfK ranking No. 3 and comScore No. 4, according to an MDN analysis of the American Marketing Association’s “Gold Report” of leading marketing research providers.
That could change appreciably based on which -- if any -- company ends up acquiring GfK.
I hope it isn't so but one reason that GFK is rumored to for sale may be the continuing weakness of the magazine business and the reluctance of profit squeezed publishers to pay fairly steep prices for ongoing, but largely redundant, readership studies.If this is the case---and, to repeat myself, I hope it isn't as GFK's MRI service provides much very useful consumer mindset and product use data----than we may be seeing the beginning of the end for syndicated, every year, every issue magazine audience studies and a return to the old system of once in a while research without every issue specificity as this doesn't seem to be doing print ad sellers any good versus TV and digital.
As usual I generally agree with Ed's assessment however syndicated audience data especially at the ad exposuree level will I suggest never be redundent albeit the target universes will be significantly more sophisticated than meree demo's. Reach/frequency is the foundation of any meaningful media campaign especially the reach part! Also we need to understand that with MPX adjustments and magazine velocity MRI does offer magazines comparable data to C3 TV ratings or better. If you are not using these data it is not too late to start!!
Suffice it to say that should GfK go into orbit the DOJ or the FTC must block any attempt by Nielsen to acquire it's assets. Nielsen already was permitted by the FTC to scopp Arbitron which has hurt the ad industry and specifically audio/radio publishers significantly. Unregulated monopolies in audience research measurement must be finally stopped.
Ed - Sorry but your view is a narrow U.S. one. When I stepped down as CEO of GFKMRI in 2013, the audience measurement side of GfK - including MRI - was thriving globally. Internally GfK has TV measurement, retail tracking, radio measurement, mobile and web measurement and print. The weaker sector was traditional market research and that made up a very large part of the GfK global business. My guess is that there is weakness in the traditional market businesses that has triggered these rumors.
I'm sure that you know a lot more than I about GFK MRI, Kathy and your point about weakness in the market research area is telling as in these tough economic times one would think that more would be spent to study marketing issues rather than less. Tony's point about who eventually buys GFK is also noteworthy. If it's Nielsen then we are seeing one company developing a virtual monopoly--in the U.S.---on media audience measurement, with radio and TV already in the bag and then magazines. No one seemed to care when Nielsen took over Arbitron; perhaps no one will mind if Nielsen becomes the primary auditor of magazine audiences as well. Next up digital, where, for now, there is still competition----but for how long? It will be interesting to see how this all plays out.