A day after outlining plans to create a new cross-platform measurement systems, CEO David Kenny told investors they are looking at a “New Nielsen.”
"For the New Nielsen, Audience is Everything. As the essential provider of data and analytics to the media marketplace, we have a significant opportunity to expand our role as we help our end markets better find and monetize their audiences,” Kenny said Wednesday.
With the sale of the Nielsen Connect business for $2.7 billion. , Kenny said the new Neislen will grow revenues faster, have higher profit margins and generate more cash flow.
“We are undergoing a cultural transformation at Nielsen driven by our core operating principles of fewer, faster and bolder. We have streamlined our organization and will be 100% focused on media following the sale of connect. We are also exiting other non core businesses,” he said..
Kenny said Nielsen’s audience measurement business is expected to generate low to mid-single digit organic revenue growth, compared to 3% organic growth from 2016 to 2019.
He said Nielsen’s new measurement services will bring in more clients and revenue.
“Whether YouTube or Fox and Tubi, or addressable ads from DirecTV or Dish or Vizio, all of this creates value for both the buyers and the sellers and aligns our pricing and annual increases with that value,” Kenny said. “The deals we closed in 2020, give us greater visibility and confidence for the next several years and we are working closely with the industry to build alignment.”.
In its audience outcomes business, Kenny said Nielsen has been expanding from its base of consumer packaged goods marketers to companies in categories including retail, travel, insurance and telecommunications. New clients including Visa, Equifax, American Family Insurance, Petco, Renault, Volkswagen, Fiat and LVMN.
Kenny said he expects Gracenote to grow reviews in the mid to high single digits.
Overall, Kenny said the New Nielsen will have a stronger financial profile.
Its stable contracted revenue base will rise to 80% from 70%, increasing predictability. Nielsen’s 2020 base of $3.3 billion is expected to grow at 2.5% compared to 1% before the Nielsen Connect sale, and margins should grow to 42% from about 30%. Cash flow conversion should rise to 40% from 30%, and the company aims to get that figure closer to 50%
“The new Nielsen has a significant opportunity to help our clients and the entire media industry transform. I am so excited to let you see exactly how we plan to do this,” Kenny told investors.
Nielsen stock was up nearly 3% in early trading Wednesday.
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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