The Nielsen Company is a publicly held global information and media company, and is one of the world's leading suppliers of marketing information (Nielsen Consumer, formerly ACNielsen), media information and TV ratings (Nielsen Media Research), online intelligence (Nielsen Online) and mobile measurement (Nielsen Mobile). Nielsen is active in over 100 countries, and employs some 36,000 people worldwide. On January 25, 2011 the company issued an IPO raising $1.6 billion in the biggest private equity-backed U.S. IPO since 2006.
While the Nielsen brand is most often associated with television ratings, those TV ratings services comprise approx. one-quarter of the company's business and revenues. After substantial work to simplify the company over the last several years, Nielsen today aligns their business into two divisions: What Consumers Buy and What Consumers Watch
What Consumers Buy
Nielsen's Buy division (approx. two-thirds of global revenues) primarily helps packaged goods companies and retailers (and Wall Street analysts) understand what consumers are buying in terms of categories, brands and products. For example, it is Nielsen's data that measures how much Diet Coke vs. Diet Pepsi is sold in stores, or how much Crest versus Colgate toothpaste is sold. They accomplish this by purchasing and analyzing huge amounts of retail data that measures what is being sold in the store, and they combine it with household panel data that captures everything that is brought into the home. They also can provide insights into how changes in product offerings, pricing or marketing would change sales. Major clients include The Coca-Cola Company, Nestle, Procter & Gamble, Unilever Group and Wal-Mart.
What Consumers Watch
Nielsen's Watch division (approx. one-third of global revenues) primarily measures what consumers are watching on all of the screens in their life: TV, computer, mobile/smartphones, tablets, etc. The company measures consumption of programming and advertising across all distribution points. Nielsen's ratings are used by advertisers and networks to shape the buying and selling of advertising. Major clients include CBS, NBCU, News Corp. and The Walt Disney Company.
The company began measuring television audiences in 1950, at a time when the medium was just getting off the ground. Just as with radio, a sampling of homes across the U.S. was used to develop ratings. This information was collected on a device that was attached to a television that recorded what was being watched. In 1953, the company began sending out diaries to a smaller sample of homes (“Nielsen families”) within the survey to have them record what they had watched. This data was put together with information from the devices. This combination of data allowed the company to statistically estimate the number of Americans watching TV and the demographic breakdown of viewers. This became an important tool for advertisers and networks. In the 1980s, the company launched a new measurement device known as the “people meter”. The device resembles a remote control with buttons for each individual family member and extras for guests. Viewers push a button to signify when they are in the room and push it again when they leave, even if the TV is still on. This form of measurement was intended to provide a more accurate picture of who was watching and when. In July 2008, Nielsen released the first in a series of quarterly reports, detailing video and TV usage across the ‘three screens’ – Television, Internet and Mobile devices. The A2/M2 Three Screen Report also includes trends in time-shifted viewing behavior and its relationship to online video viewing, a demographic breakdown of mobile video viewers and DVR penetration.