Declines In Nielsen’s “Buy” Business Offset Q1 Growth

Although Nielsen’s total revenue grew 3.2% to $1.5 billion in Q1, CEO Mitch Barns on Tuesday cited several challenges facing its Buy segment, which provides sales measurement and market share information to retailers and manufacturers.

While revenue for Nielsen’s Watch segment (Nielsen’s media and audience measurement business) was up 11.1% YoY to $769 million, Buy revenue decreased 3.7% YoY to $757 million.

US-based retailers and CPGs in particular face margin pressures, Barns said, so many Nielsen clients are cutting costs.

“First, consumer purchasing is trending toward local and specialty products at the expense of bigger brands,” said Barns during the company’s Q1 earnings call.

Second, brick-and-mortars face more pressure with the growth of ecommerce subscriptions.

“We’ve seen zero-based budgeting put downward pressure on clients’ spend and our business is not immune to the pressures they’re facing,” Barns said, “and that’s reflected in our numbers.” 

Despite these market challenges, Nielsen claims it’s making progress on an open data and analytics system servicing retail and CPG clients, launched last year.

About 25 companies participate in the Nielsen Connected Partner Program, which builds solutions or apps based on Nielsen’s platform infrastructure to service 49 brand or CPG clients.

But Nielsen also faces competitive pressures here from companies like Oracle, which owns Datalogix and intends to acquire Moat.

And other measurement competitors, such as IRI, are also encroaching on Nielsen’s territory.

Barns clarified rumors that Kroger was no longer providing data to Nielsen after the grocer announced an exclusive relationship with the competitive measurement provider IRI last summer.

Nielsen still has a relationship with Kroger in its Buy business, in which it aggregates sales data and market share information that it provides to all Buy clients.

However, Kroger no longer uses Nielsen’s retailer-specific analytics, which are provided to brand manufacturers, instead moving to IRI.

“At times we will be both cooperating and competing with third parties, particularly on the analytics side of our business,” Barns said. “Out strategy is to have an open approach.”

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