| WASHINGTON, April 25
WASHINGTON, April 25 U.S. antitrust regulators
are likely to scrutinize new forms of advertising as they mull
the planned purchase by television rating giant Nielsen Holdings
NV of Arbitron Inc, which dominates radio
ratings, legal experts say.
The Federal Trade Commission, in assessing the $1.26 billion
merger to ensure it complies with antitrust law, will likely
focus on the emerging frontier - cross-platform data designed to
tell advertisers in a holistic way what customers watch on
television, listen to on the radio, look at online and see on
their mobile devices.
The deal was announced in December. Arbitron shareholders
approved the acquisition this month.
An informal Reuters poll of eight antitrust experts found
that six believed that the FTC would approve Nielsen's purchase.
A seventh thought a challenge was possible and an eighth had no
Access to reliable ratings is critical for companies
formulating their advertising strategies, to the tune of some
$140 billion in 2012 according to data from Kantar Media. The
higher the rating and the more attractive the demographic, the
more advertisers will be asked to pay for the spot.
One concern with the proposed transaction is that Nielsen,
which also measures some online spending, would expand into
radio. "It's putting a lot of eggs in one basket. That's the
biggest concern," said Brad Adgate, vice president for research
at Horizon Media, Inc.
Nielsen declined to discuss the deal in an interview but
said it was working with regulators and hoped to announce the
completion of the acquisition "as soon possible."
OLD MEDIA MONOPOLIES STILL MATTER
Nielsen and Arbitron now operate primarily in different
markets, which at first glance would make the deal
uncontroversial. There are signs, however, they could move into
each other's areas of dominance.
For example, Nielsen measures radio listening in 11
countries but not in the United States, according to its web
site, a sign that it could also do so in this country.
And Arbitron has made forays back into television ratings, a
business it abandoned in 1993. It entered again in a small way
recently through deals with ESPN and others.
By acquiring Arbitron, Nielsen also gains access to data on
what is known in industry parlance as "out-of-home," essentially
billboards and other forms of outdoor advertising.
Both Nielsen and Arbitron use devices - with Nielsen the
"people meter" and with Arbitron the "portable people meter,"
(PPM) a pager-like device which measures what radio station
people listen to - which measure consumer demographics,
according to Bill Duggan of the Association of National
Advertisers, a trade group.
Both also have an online presence, although the big dog in
Internet ratings remains comScore Inc. Nielsen, for
example, provides various data services including the
measurement of traffic to websites. It also provides information
about what consumers buy at retail stores.
Once it acquires Arbitron, Nielsen has said it plans to
expand its "Watch" measurement that keeps tabs on consumer
viewing and listening habits as consumers move from television
to computers and mobile devices. Arbitron also measures
streaming music over the Web.
THE BUZZ ABOUT MEASURING BUZZ
It is comparatively easy for the FTC to assess the likely
effect of the merger on television and radio metrics. Measuring
the impact on Internet and mobile space may be tricky.
"The feeling is that Nielsen is buying Arbitron to get a
better grip on measuring mobile," said Adgate. "Nielsen doesn't
have anything similar. Not for mobile they don't. ... This will
not be rubber-stamped (by the FTC)."
Arbitron uses its own on-device meters to measure how
consumers use mobile phones and tablets.
And, what about the newest frontier of all: combining all
four media so that advertisers can see how to get the absolute
best bang for their buck, and respond accordingly.
"My area of concern would be foreclosure of potential
(cross-platform) competition to Nielsen in particular," said
Ankur Kapoor, an antitrust lawyer with Constantine Cannon LLP.
"If you think about where and how people consume media, it's
literally everywhere. To get a meaningful measurement, you have
to be cross-platform."
No other ratings company has the reach of Nielsen, experts
said. ComScore is strong in Internet ratings while others -
Invidi, Precision Demand, Rentrak, Simulmedia and TRA - could
potentially grow into competitors. But for now, advertisers
currently cannot avoid using Nielsen, said Adgate.
Jacqueline Grise, a partner with Cooley LLP, was one of
several antitrust attorneys who believed the transaction would
be approved, but perhaps with conditions such as Arbitron being
forced to sell its PPM technology.
"I'd be cautiously optimistic that they can get it through
without a fix but even if they don't I think that they've got
that fix," she said.
One unknown that could tip the FTC investigation is what
Nielsen or Arbitron customers have told regulators.
A poll of Association of National Advertisers members found
that half had "no concerns" about the deal while half had "some"
or "serious" concerns, ANA's Duggan said in a blog post.