Taylor Nelson Sofres plc

views updated

Taylor Nelson Sofres plc

Westgate
London W5 1UA
United Kingdom
Telephone: (+44) 20 8967 0007
Fax: ( + 44) 20 8967 4060
Web site: http://www.tnsofres.com

Public Company
Incorporated: 1997
Employees: 6,000
Sales: £380.9 million (US$571.4 million) (1999)
Stock Exchanges: London
Ticker Symbol: TNN
NAIC: 541910 Market Research Services

London-based Taylor Nelson Sofres plc is the world’s fourth largest market research specialist, with 150 offices in over 40 countries. The company, which leads the United Kingdom and French markets, has extended its reach to a further 20 countries through a series of strategic partnerships. Taylor Nelson Sofres provides customized market research and analysis to many of the world’s leading multinational corporations; the company has also developed a series of branded research products and services, including the Miriad information system; the customer commitment and loyalty scale Conversion Model; Needscope, used for understanding the customer-brand relationship; FoQus2, for measuring customer satisfaction; and Optima, for the management of brand portfolios. The combination of Taylor Nelson AGB and Sofres in 1997 created a global market research company specializing in such categories as consumer panels, a segment in which the company is worldwide leader; television audience measurement, using the viewer ratings system PeopleMeter to challenge industry leader A.C. Nielsen; the automotive, healthcare, and telecommunications industries; media monitoring; and information technology. In 2000, the company moved to increase its position in the growing Internet market, with the US$88 million acquisition of Competitive Market Research from rival VNU Marketing Information, Inc. The company’s move into the Internet market has been further bolstered by the creation of a dedicated Internet division. Taylor Nelson Sofres has grown strongly since the last half of the 1990s, building its revenues from just £80 million in 1995 to more than £380 million in 1999. Most of that growth has come from acquisitions: in 1999 alone, the company made some ten acquisitions. Taylor Nelson is led by Tony Cowling as executive chairman, and Pierre Weill as managing director.

Boom Years for Pollsters in the 1960s

One of the first examples of the predictive power of modern market research techniques was seen during the 1936 U.S. presidential elections. A straw poll conducted among some two million readers of the Literary Digest gave contender Alf Landon the presidential victory. But a new service, formed by George Gallup, chose instead to use a representative sample—in other words, an attempt to recreate American society on a small scale—of only 4,000 people to make its prediction on the outcome of the race. Gallup’s poll correctly forecast Franklin Roosevelt as the winner—and gave rise to the modern era of market research.

Politicians flocked to the use of polls and other market research techniques, and continued to feature among the largest users of market researchers into the next century. Corporations, and especially those producing consumer products, also rapidly saw the value of the new techniques, which promised to enable a company not only to measure the effectiveness of an advertisement campaign, but also to help direct their advertising budget and even to develop the product range itself. Market research companies began developing new and more sophisticated tools for “reading” the consumer public. The rise of television created another new market—measurements of audience viewing levels permitted broadcasters to attract more (or fewer) advertisements, establish per-minute fees, and also to target specific audiences for specific products.

The market research phenomenon rapidly became a global industry, as each country developed its own services. In France, for example, the Institut Français de 1’Opinion Publique, that country’s first polling organization, showed that a majority of the country had agreed with the signing of the Munich Treaty in 1938. It was no surprise, however, that the conducting of polls was an activity banned in the Nazi-occupied countries during World War II.

The economic boom years of the postwar period, which gave rise to a new and accelerated consumer culture, also proved a boom to the market research industry. Where a handful of players had shared a relatively limited terrain up to the 1960s, a new breed of market researchers, often specializing in single industries, appeared. These companies in turn helped to transform the marketplace, and particularly the relationship between consumers and manufacturers.

The founding companies of what later became Taylor Nelson Sofres were formed in the first half of the 1960s. The first of these, Intersearch, was founded in the United States in 1960, followed two years later by London-based Audits of Great Britain, which later simplified its name to AGB. In France, Pierre Weill formed Sofres in 1963. In Australia, the company Frank Small and Associates was founded in 1964. Lastly, Elizabeth Nelson, already a market research specialist, and Tony Cowling, who played a principal role in expanding the company, joined with investor Steward Taylor to form Taylor Nelson in London in 1965.

During the 1960s, AGB won the right to measure audience levels for the BBC networks in the United Kingdom. The contract gave AGB the boost it needed to go public, listing on the London Stock Exchange in 1970. AGB went on to challenge the A.C. Nielsen Company’s longtime dominance of the television audience measuring market in the United States in the mid-1980s, developing its interactive PeopleMeter system. Nielsen responded, however, with its own, similar system. After sinking some £50 million into establishing a foothold in the U.S. market, AGB was forced to abandon the attempt. By 1988, AGB had been bought up by Pergamon Professional and Financial Services, a unit of the sprawling, 1980s-era empire of Robert Maxwell. Pergamon paid more than US$230 million for AGB.

Taylor Nelson had meanwhile gone public in 1985, only to find itself snapped up by Addison Page in that company’s attempt to diversify its operations. Addison Page bundled Taylor Nelson with its other market and media research holdings and formed the Addison Consultancy division. Following the market crash of 1987, however, Addison Page was forced to shed a number of its businesses, and Addison Consultancy was spun off as part of a management buyout led by founding Taylor Nelson member Tony Cowling. Cowling took the chief executive’s position in 1989.

Consolidation in the 1990s

While a number of players loomed large on the international market research scene—including Nielsen in the United States, Sofres in France, and Addison Consultancy in the United Kingdom, the industry remained highly fragmented, with few companies operating at any kind of international level. The 1990s saw the industry transform itself, consolidating into a limited number of global heavyweights.

Under Pierre Weill, Sofres had already begun to build up its dominant position in France. At the end of the 1980s, Sofres went on a buying spree, moving beyond its domestic market to establish itself as one of Europe’s leading market research companies. Among the companies acquired by Sofres at this time were Belgium’s Sobemap, Italy’s Abacus, Emnid of Germany, and Sofemasa and Demoscopia of Spain. By 1991, Sofres had succeeded in transforming itself into one of the most dynamic of the international market research companies, with 60 percent of its sales achieved outside of France. At home, Sofres took on the French market’s leading position, especially after its 1992 acquisition of Secodip, a specialist in conducting consumer panels with strong positions in the French, Spanish, and Portuguese markets. A year later, Sofres had gained a dominant position in the Spanish market, taking control of that country’s television measuring contracts.

By then, AGB had changed hands. The death of Robert Maxwell led to the swift unraveling of his media empire. By 1991, AGB was up for sale—and was snapped up by Addison Consultancy for less than US$25 million. The purchase made Addison Consultancy—which shortly renamed itself Taylor Nelson AGB—the largest market researcher in the United Kingdom.

Taylor Nelson AGB spent the first half of the 1990s solidifying its position in its home market and extending its range of products and services, especially through the acquisition of companies such as Teledynamics, a telemarketing specialist, and John Richardson Computers. By mid-decade, the wave of domestic consolidations began to wash across Europe’s borders, as the market research industry, which has traditionally been country-specific, began to transform itself. As more and more of market researchers’ customers had begun operating on a multinational and global basis, the market research industry too began to move toward a globally operating industry.

Sofres fired the first shot, moving into the United Kingdom market in 1994 with the acquisition of Harris Research Centre. Sofres also acquired France’s Louis Harris, while increasing its position in Belgium with the acquisition of Dimarso. In 1995, Sofres moved even farther afield, buying up Frank Small & Associates (FSA), which over 30 years had established itself not only as a leader in the Australian and New Zealand markets, but also as the Asian Pacific region’s second largest market researcher, with offices in ten countries in the region. The year following the FSA acquisition brought Sofres into the Japanese market, through a joint-venture with that country’s Japan Statistics Research. Sofres also entered Vietnam, and began to prepare its launch into India as well.

Company Perspectives:

We have identified four key elements to our strategy, which we believe will lead to continued, profitable growth: To extend the Taylor Nelson Sofres global network; To develop business in our chosen specialist sectors; To increase the volume of syndicated and tracking services and develop branded research solutions; To use high-tech solutions to collect, analyse and present quality information.

By then, Taylor Nelson AGB joined the internationalization drive, launching a subsidiary, Taylor Nelson AGB Media Facts, in the Czech Republic. Media Facts quickly opened new branches in Poland, Russia, and Romania. These moves were followed by Taylor Nelson’s purchase of Gallup A/S, of Denmark. Meanwhile, in 1997, Sofres moved into the U.S. market, buying up Intersearch. Yet, a few months later, Taylor Nelson AGB bought out Sofres, paying £119 million.

The acquisition led the company to change its name to Taylor Nelson Sofres, in order to reflect the merging of its operations. The two company’s complementary operations combined to produce one of the world’s top five market research firms. Tony Cowling was named chairman of the new industry heavyweight, with Pierre Weill given the chief executive’s chair.

Taylor Nelson Sofres immediately began to broaden its position not only in its core European and Asian market, but also in the huge U.S. market. In 1998, the company picked up Reed Elsevier’s Chilton Research Services; the following year, the company, which went on a buying spree, picked up two more U.S. companies, Market Development and QCR. Throughout 1999, Taylor Nelson Sofres made numerous acquisitions, including Scher International, WHF, and Customer Satisfaction Surveys of the United Kingdom; NIPO of the Netherlands; and Lit Tout of France.

An agreement to partner with Facta Research of Mexico in September 1999 brought Taylor Nelson Sofres onto the South American continent—a vast market of more than 500 million people. The Facta partnership added to the company’s acquisition of San Diego, California-based Market Development, which specialized in the U.S. and Latin American Latino markets. Taylor Nelson Sofres continued to build up its U.S. position in early 2000, buying Competitive Media Reporting, based in New York, from VNU Marketing Information, Inc.

While Taylor Nelson Sofres continued to solidify its international operations, offering a one-stop shop to the world’s global companies with its own multinational operations, the company was also moving into the extra-national sphere: by the end of the century, the company’s attentions had turned to developing its activities on the Internet. Developing a next-generation set of tools for measuring Internet and web site traffic, Taylor Nelson Sofres sought to extend its leadership position into what promised to soon become one of the largest market research markets.

Principal Subsidiaries

: Abacus Spa (Italy); Central Pentru Studierea Opinieri Si Pietei SRL (Romania; 48%); CVSC Sofres Media Co Ltd (China; 40%); D Mas A Documentacion Y Analisis SA (Spain); Demoscopia SA (Spain; 40%); Dimarso SA (Belgium); Dympanel SA (Spain); Dympanel SA (Argentina; 51%); EMNID GmbH & Co Kg (Germany; 78%); Gallup A/S (Denmark); GI Consulting (29%); GIE Audiepub (France; 33%); Market Research Bureau of Ireland (85%); Mode Research (India; 30%); Norske Gallup Institutt A/S (Norway); OBOP Sp zoo (Poland; 60%); SC Arema International SRL (Romania); Secodip SA (France); Sobemap SA (Belgium); Sofres AM Liban (Lebanon; 49%); Sofres AM SA (Spain); Sofres Modus Kft (Hungary; 51%); Sofres SA (France); Taylor Nelson AGB Media Facts sro (Czech Republic); Taylor Nelson Sofres Asia Pacific Pty (Australia; 75%); Taylor Nelson Sofres BV (Netherlands); Taylor Nelson Sofres Intersearch (U.S.A.); TRC (Hong Kong; 26%).

Principal Competitors

A.C. Nielsen Company; Audits & Surveys; Boron, LePore & Associates; Ceridian Corporation; IMS Health; Information Resources, Inc.; M/A/R/C; NFO Worldwide, Inc.; NPD Group; VNU Marketing Information, Inc.; WPP Group plc.

Key Dates:

1960:: Intersearch is formed.
1962:: Audits of Great Britain (later AGB) is founded.
1966:: AGB wins U.K. television measurement contract.
1963:: Sofres is founded.
1964:: Frank Small & Associates is founded.
1965:: Taylor Nelson is formed.
1970:: AGB lists shares on the London Stock Exchange.
1985:: Taylor Nelson is listed on the London Stock Exchange; AGB launches PeopleMeter.
1987:: Addison Page acquires Taylor Nelson, which is renamed Addison Consultancy.
1988:: Pergamon acquires AGB; Addison Consultancy is spun off in management buyout.
1991:: Addison Consultancy acquires AGB, which is renamed Taylor Nelson AGB; Sofres acquires Sofemasa.
1997:: Taylor Nelson AGB acquires Gallup A/S (Denmark); Taylor Nelson merges with Sofres and forms Taylor Nelson Sofres.
1998:: Taylor Nelson Sofres acquires Chilton Research Services.
1999:: Company buys Market Development, NIPO, Scher International, and QCR.
2000:: Company acquires Competitive Media Reporting.