What is Nielsen?
Nielsen is a global research and analytics company. Its primary objective is to provide information pertaining to market research by supplying its clients with useful insights into what consumers pay attention to and, ultimately, what they will spend their money on. This is done through collecting and measuring data over a broad spectrum of sources. Nielsen has two primary units of operation, Watch and Buy. The Watch component allows clients to track precisely what is being viewed by which specific consumers, and whether or not these viewings lead to the purchase of goods and services. This level of information, referred to as Reach, Resonance and Reaction, can be used to inform companies as to the optimum use of any projected target marketplace.
The Buy component offers a global perspective on consumer shopping behavior, by providing retail performance measurements, via systems such as Scantrack and Homescan. Scantrack provides data on UPC coded products, giving detailed information on them, whereas Homescan data comes directly from consumers who are rewarded for recording their purchases. Data garnered from both the Watch and Buy aspects of Nielsen analytics can be invaluable marketing tools, at all levels of operation. In the words of businesswoman and political figure, Carly Fiorina: “The goal is to turn data into information, and information into insight.” Possessing such insight can determine the success or failure of a company.
A Brief History
Arthur C. Nielsen has been quoted as saying, “The price of light is less than the cost of darkness.”The company he founded in 1923, which was incorporated in 1929, initially performed analyses of the advertising trends of brand-name products. It quickly broadened its field of focus by entering the realm of radio marketing. By the late 1940s, it had begun reporting significant data, such as what the total audience of certain radio shows were, including cogent details about the composition of their listeners. The Nielsen Company was then able to extend this ratings analysis into the burgeoning television industry. It acquired the C. E. Hooper company in 1950, and initiated the practice of attaching devices to the television sets of a segment of the population in order to measure viewing habits.
It did not take long for the Nielsen name to become synonymous with the concept of consumer rating. Subsequently, Nielsen was able to develop electronic methods of data retrieval, founding an independent company known as Nielsen Media Research, in 1999. It has since branched out its services to include a myriad of exclusive deals with a great number of major retailers. Nearly a century has passed since its founding, during which time Nielsen has become perhaps the largest and most well-known consumer-behavior data system in the world.
Benefits of Using Nielsen Data
Nielsen data can answer specific questions that companies may have about any given market they wish to target, including the size of the market, what parts of it are expanding, how other brands perform within it, as well as a number of other basic concerns. It can also be helpful in the area of examining the efficacy of specific advertising campaigns, by identifying which strategies have yielded the best results, and by helping companies figure out if they are under- or over-promoting their products.
The data that Nielsen provides can also be useful in the area of pricing, using features such as Average Price and Price Elasticity to determine price points. Generally speaking, the importance of using Nielsen data in analytics centers around the enormous range of information it is capable of providing. Because of its scope, Nielsen data can point marketers in the right direction, when it comes to even formulating what questions need to be asked in order to conduct the most effective research. As the late author, lecturer and management consultant, W. Edwards Deming once remarked, “If you do not know how to ask the right question, you know nothing.”