Information Resources Inc. and the Nielsen Co. have formed a joint venture to process consumer purchase data from a common set of households.
The venture announced today means the companies will conduct competing research and analysis based on a common panel of consumers. A panel identifies factors such as who is buying, where and how often. It also gauges the level of brand and retailer loyalty, as well as the impact of shopper promotions.
The arrangement aims to reduce costs for both companies.
The shared panel of households, established using Nielsen's household sample and data acquisition infrastructure, will be owned by the 50/50 joint venture. Beginning in the first quarter of 2010, the National Consumer Panel will be used to support Nielsen Homescan and IRI Consumer Network.
While the concept of competing research firms sharing resources is unprecedented, such moves are common in other industries. Newspaper publishers have formed joint operating agreements to share printing, distribution and even some content costs, while broadcasters have inked deals to share sales, programming and newsgathering resources.
The joint venture between IRI and Nielsen should do the same, making a significant impact on cost structure for the two companies. Revenue for Nielsen's global consumer panel services, a $290 million business and 5 percent of the company's revenue, was down 11.4 percent to $59 million in the second quarter.
Both companies said the joint venture was a way to concentrate on developing more and better consumer and shopping research insights for clients who are faced with increasing pressure to shave costs and increase sales.
"There is far greater value from the insight derived from a consumer/shopper panel than from the data itself," said John Lewis, Nielsen consumer North America president and CEO, in a letter to clients. "Therefore, this strategic business decision enables a shift in focus from how the data is acquired to how it is applied."
For IRI, the joint venture gives it access to a larger panel sooner than planned. "This joint venture . . . enables IRI to concentrate on the consumer panel innovations that really matter: increased speed to insight via new technologies, deeper and broader insights covering a full 360-degree view of the consumer, and new automated analytics to accurately predict changing shopper attitudes and behaviors," said John Freeland, president and CEO of IRI.
As part of the agreement, Nielsen will receive 100 percent of the targeted 100,000 plus households and IRI will have access to 86 percent with the right to acquire up to 100 percent after two years. In addition, a new panel recruited by the joint venture will replace IRI's RxPulse patient panel. Nielsen will be the sole provider of its Hispanic specialty panel.
A board of directors, equally represented by IRI and Nielsen executives, will run the joint venture.
Brandweek is a unit of Nielsen.
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