The ambitious “single currency” audience measurement plan unveiled by Nielsen this week comes with a price tag. And it will be paid mainly by charging higher prices to existing advertiser, agency and media customers, according to Wall Street analysts briefed by the company.
“Nielsen’s revenue growth strategy begins with a culture reset,” BMO Capital Markets analyst Daniel Salmon writes in a report sent to investors following the announcement of Nielsen’s “One” platform to transform the ad industry’s underlying media currency into a single, multiplatform measurement service controlled by Nielsen.
“Nielsen will be focusing on accelerating revenue growth and improving profitability,” he continues, disclosing that in their briefings with securities analysts, Nielsen’s management team said it expects existing clients to “contribute 75% of future growth,” with 25% coming from new clients and international sales.
The company also said it expects “recurring” revenues from its multi-year advanced contracts with clients to go from 70% of its revenues currently to about 80% following the the spin-off of its consumer marketing research business in January.