Word-of-Mouth Measurement Leader Emerges Under VNU

  |  January 17, 2006   |  Comments

Consolidation in the word-of-mouth measurement space as BuzzMetrics and Intelliseek form Nielsen BuzzMetrics.

Nielsen parent VNU is taking a majority stake in word-of-mouth measurement firm BuzzMetrics, which simultaneously announced plans to acquire rival Intelliseek. The new company will operate under the name Nielsen BuzzMetrics.

"The combined company will be a strong and clear leader for the space, especially with the backing of VNU," said Nielsen BuzzMetrics CEO Jonathan Carson.

Financial details of the transactions weren't disclosed.

VNU originally held a minority share of Israeli-based Trendum, which acquired U.S.-based BuzzMetrics in September. Now VNU is taking a 50.1 percent stake in the combined entity, which has signed a definitive agreement to acquire competitor Intelliseek. The acquisition is expected to close in 30 to 60 days. Nielsen BuzzMetrics will continue to operate as a private company.

The consolidation of the word-of-mouth monitoring space and adoption of the Nielsen name shows how mainstream the measurement provided by BuzzMetrics and other competitors has become. Carson called the word-of-mouth space an active and competitive environment.

"Nielsen is the clear leader in measuring all types of traditional media," said Carson. "So their backing of this deal and licensing of the Nielsen brand name to BuzzMetrics is a testament to how they see the emergence of consumer generated media. We think it's a real validation of the concept of word-of-mouth marketing."

Pete Blackshaw, who will become CMO for Nielsen BuzzMetrics, says the acquisition shows marketers are beginning to appreciate the importance of listening to consumers. "Just about every major study is showing that consumer recommendations trumps any form of advertisement," he said. Blackshaw was chief marketing and customer satisfaction officer at Intelliseek.

Competitors are optimistic because consolidation in the space validates it in marketers' minds. "It puts it on every marketer's agenda that this is a real space and they need a partner to help them figure out what's going on," said Cymfony Chief Strategy and Marketing Officer Jim Nail. "There's plenty of room in there for all of us, once marketers know how much value there is."

Both BuzzMetrics and Intelliseek plan to maintain and enhance their existing offerings. BuzzMetrics' services include the monitoring of TV show buzz and health-related buzz, while Intelliseek operates Blogpulse.com and a consumer generated media (CGM) monitoring service.

VNU's involvement comes at a time when the holding company itself is dealing with a buyout offer valued at a reported $8.9 billion. VNU has come under fire because of shareholder dissent about unrelated acquisition plans. Cymfony's Nail speculates that activity at the holding company level could present problems because the potential buyer, a group of private equity firms, would likely break up the properties for sale.

The potential acquisition doesn't worry Carson, however. "We're not anticipating that we would be significantly affected," he said.

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