The Market Research Industry Is Getting a Makeover
Date : 14 Jul 2008 Category : Technology
NewsFactor NetworkTaylor Nelson Sofres, which is based in London, and GfK, which is controlled by a nonprofit organization based in Nuremberg, want to bring those services together under one roof. But their plan to merge in a deal that would create the second-largest market researcher in the world, after Nielsen, has run into opposition from WPP Group, an advertising company that wants to strengthen its own market research arm, Kantar.
WPP has already made several approaches to TNS, which have been rebuffed, and might make another, higher bid, its chief executive, Martin Sorrell, said during an interview.
The 50-50 merger agreement between GfK and TNS would value the combined company at about pound(s)2 billion, or $3.95 billion. WPP's most recent approach, in May, valued TNS alone at about pound(s)1 billion, though the value has fallen as WPP shares have slipped.
The battle over TNS reflects broader changes that are reshaping the market research industry. Midsize players like TNS, GfK and Kantar are under pressure to find partners to meet multinational marketers' demands for standardized global information. Meanwhile, new companies are springing up, sometimes employing little more than a handful of programmers, to take advantage of a powerful, low-cost research tool, the Internet.
"In three or four years, there will probably be three or four large players and a whole lot of smaller ones," said David Lowden, chief executive of TNS. "The middle will be squeezed out."
According to Morgan Stanley, a combined TNS and GfK would have 14 percent of...