Nielsen’s revenue soared in the second quarter.
The company on Tuesday reported a nearly 16% revenue growth spurt in the second quarter of 2014 to $1.6 billion, up from $1.4 billion at this time last year, minus the recent acquisitions of Arbitron and Harris Interactive.
Although revenue was up, net profits were nothing to write home about. Nielsen experienced a precipitous decline in income from $426 million in Q2 2013 to $74 million this quarter, which CEO Mitch Barnes blamed on recent refinancing of the company’s long-term debt.
In terms of new products and revenue streams, Nielsen is diving into mobile measurement. While this may still be new for Nielsen, Barnes predicted significant growth later this year with the planned upcoming inclusion of mobile measurement in TV ratings.
For the moment, it’s a bit early to talk about specific revenue from the mobile arm of Nielsen’s Online Campaign Ratings (OCR), which launched July 1, but Nielsen’s CFO Jamere Jackson did note during the company’s Q2 2014 earnings call that revenue for mobile OCR stands “in the tens of millions.” He said Nielsen will share more concrete numbers down the line.
As of now, more than 100 companies have signed up for mobile OCR, including key video platforms Adap.tv, BrightRoll, LiveRail, Tremor Video and TubeMogul.
“The rapid adoption aligns with the rapid growth of mobile advertising, which you’ve seen reflected in some of the recent numbers from Facebook, Google and other,” Barnes said. “Adding mobile coverage was No. 1 on almost every client’s list.”
In answer to a question about predictions on OCR adoption rates for premium vs. nonpremium inventory, Barnes hedged a bit, noting, “ultimately, that gets decided by the marketplace.”
“What we can deliver to the marketplace is a metric that performs well across the broad spectrum of the marketplace’s needs, and that’s the kind of response we’re getting,” Barnes said. “Ultimately, if OCR gets used or adopted at different rates for premium video versus nonpremium is going to depend on a lot of things that are outside of Nielsen’s control. Our role is to simply measure the consumer and to do that in the most complete way across all delivery platforms, across all advertising models and across all business models.”
Nielsen’s Buy division, which measures consumer shopping habits for brands and retailers, including Coca-Cola, P&G and Wal-Mart, grew 6.6% revenuewise to $900 million. The company’s Watch group, which provides cross-screen measurement data on what consumers are consuming on TV, mobile and radio — clients include CBS, NBC and The Walt Disney Company — increased 28% year over year to $694 million. Barnes attributed the growth in Watch revenue to Nielsen’s “increasing momentum in digital and continuing strong growth in Ad Solutions, which brought in about $200 million in revenue this quarter.
“In Ad Solutions, which you’ll increasingly hear us refer to as ‘marketing effectiveness’ going forward, we continue to help our clients improve the ROI of their marketing spend,” Barnes said. “While this is a competitive space, our audience measurement data differentiates us.”
Nielsen is also planning to invest more in its digital audio capabilities, and it recently won Turkey’s radio audience business. “The opportunity to expand internationally was one of the key reasons for our acquisition of Arbitron and this win in Turkey is an example of our progress,” Barnes said.
Also on the international front, Nielsen launched a new service in China this quarter that it’s calling “Omni Channel” through a partnership with Alibaba. The tool aims to help retailers track online and offline sales for a more holistic customer view.
While Nielsen is clearly doing what it can to capitalize on the industry’s voracious need for multitouch attribution, it’s not the only kid on the block. Google’s acquisition of Adometry and AOL’s purchase of of Convertro point to growing competition in the area — but Barnes says Nielsen doesn’t see it that way.
“We’ve been very active in this area and we’ve had a lot of growth happening within our Ad Solutions area,” Barnes said. “We see firms [like Convertro] as complementary. We work very closely with a number of them and we’ll continue to do that going forward.”
