As part of the decree settling the Federal Trade Commission's review of its $1.3 billion acquisition of Arbitron, Nielsen will divest a key component of its portable people meter technology that has been part of the cross-platform audience measurement system being developed by Arbitron and comScore for ESPN. Nielsen will not effectively enter into a joint venture with comScore on that project, as previously reported, but will license the technology to comScore for a period up to eight years, which would use it to develop its own service.
If comScore passes on that option, the decree requires Nielsen to license the technology to another competitor, assuming another company wants to develop a new cross-platform measurement system based on the parameters of the FTC's decree. comScore Monday stated that it was "pleased that the FTC has taken steps to preserve fair competition within the media measurement industry," and said it is in the process of negotiating an agreement with Nielsen to "acquire the technology and license the data cited in the decree, to comply with the license and divestiture process set forth by the FTC."
While one FTC commissioner, Joshua D. Write, dissented, stating: “there is reason to believe the proposed transaction will substantially lessen competition,” the settlement will allow Nielsen to complete its acquisition of Arbitron on Sept. 30th, effectively putting Nielsen back in the radio audience measurement business and expanding its role in other media, including out-of-home.
During a call with analysts and reporters Monday morning to explain the settlement, Nielsen CEO David Calhoun said Nielsen is "obliged" to sustain that relationship, even if it decides down the road that it no longer wants to support the portable people meter technology for its own reasons.
However, Calhoun said Nielsen is eager to begin integrating Arbitron's portable people meter technology into its measurement of out-of-home media, but said it would be up to Nielsen's clients to determine whether it gets included in TV advertising "currency." Historically, advertisers and agencies have been reluctant to make out-of-home audiences an explicit part of their TV audience estimates, asserting that it was an implied part of what they've always paid for, even if it was not measured.
A bigger impact of the out-of-home measurement, Calhoun suggested, might be in retooling so-called "marketing mix models" that many marketers use to help determine how much of their marketing budgets they allocate to various media.
In a final ironic note, the Nielsen executives said that Arbitron, which is primarily known for its audience measurement of an audio medium -- radio -- would be reported as part of Nielsen's "Watch" business operations.