NYSE Euronext, via Business Wire David Calhoun, chief of Nielsen, said the $1.26 billion deal would help it gauge behavior.

7:54 p.m. | Updated Consumers today are gleaners of information, moving swiftly from cellphones to newspapers, tablets to radio and social media to television. The question for advertisers is how to reach them across a fragmented environment.

The potential for tracking consumers wherever they go was the rationale behind the announcement on Tuesday that Nielsen Holdings, the company that decades ago standardized the television advertising market through its ratings system, had reached an agreement to buy its radio industry counterpart, Arbitron, for $1.26 billion.

The deal, which is subject to approval by federal regulators, would expand Nielsen’s already extensive portfolio of tools to analyze consumers’ overlapping media habits. According to Nielsen, it would also increase the number of hours a day that it can monitor an average American’s media consumption, to seven from the current five.

“That is a very big deal when your job is to measure how consumers ultimately form and change behaviors,” David L. Calhoun, Nielsen’s chief executive, said in a conference call with investors and Wall Street analysts.

Nielsen is best known for its TV ratings, but it also tracks sales of books, music and other consumer products, and measures media habits online. On Monday, the company announced a partnership with Twitter to rank television shows by their levels of social media chatter.

Its goal is to gain as thorough a picture of consumer behavior as possible to allow advertisers and media companies to make more effective investments.

“These integrated, innovative capabilities will enable broader measurement of consumer media behavior in more markets around the world,” Steve Hasker, Nielsen’s president of global media products and advertiser solutions, said in a statement.

So far, though, the idea of a complete picture of consumer media behavior is still elusive, and there is no guarantee that the addition of Arbitron would provide it.

“You want them to be able to stitch everything together as seamlessly as possible,” said Jed Meyer, a former Nielsen executive who is the United States director of research at the Annalect Group, part of the Omnicom Media Group, the media division of Omnicom Group. “That’s the promise, but the question for this and other mergers is whether they can execute.”

The merger has the potential to bring together the two companies’ complementary strengths. Nielsen collects a broad amount of data from television, retail and the Internet, and has wide global reach, but analysts say that it has had little success tracking consumers’ habits while they are on the go.

Arbitron, however, does just a fraction of its business outside the United States but in recent years has been exploring new methods of mobile tracking. Its Portable People Meter, a pager-size device, has given the radio industry a far more detailed picture of its audience than was available before.

A combined Nielsen-Arbitron, several radio executives and analysts said, could help draw advertising to the medium. Last year ad spending was $17.4 billion, flat from the year before and still down about 18 percent from prerecession levels, according to the Radio Advertising Bureau.

Radio consumption has held strong in the Internet age, as people stay plugged in to their favorite stations, particularly while driving. According to Arbitron’s most recent statistics, more than 241 million people in the United States, or about 92 percent of the population age 12 and over, listen to the radio each week. And unlike television, a large majority of the ads on broadcast radio are for local businesses.

The proposed merger has also drawn concerns about consolidation in the global media research field, which has become dominated by a handful of firms like Kantar Media, comScore, Ipsos and now potentially the combined Nielsen-Arbitron.

“Nielsen is no stranger to radio,” said Paul Heine, a senior editor at the trade publication Inside Radio. “It has measured it before as an alternative to Arbitron, and there is some concern in the radio business that it further tightens the monopoly on measurement.”

But several analysts said that given Arbitron’s relatively small size, the deal was not likely to face major hurdles with regulators. Nielsen, active in more than 100 countries, had $5.5 billion in revenue last year. Arbitron had $422 million in revenue last year, but, with $53 million in net income, had wider profit margins.

Among the other hopes for the merger were that it could lead to more measurement of online services and link Arbitron’s value for local advertising with Nielsen’s more extensive, national data.

Despite the growth of Internet radio, services like Pandora, which has more than 60 million regular listeners, is not tracked by Arbitron and therefore lacks “apples to apples” audience data to lure potential advertisers. Such measurements have been sought after by advertisers, particularly as major broadcasters like Clear Channel Communications embrace online radio, but Arbitron has been slow to introduce a system that would put online and offline listening on equal footing.

Laura Martin, an entertainment and media analyst at Needham Company, said that Nielsen’s expertise and its aggressive push into online markets could be an advantage in exploiting Arbitron’s local radio data.

“It’s interesting that they will have the management I.Q. of Nielsen in charge of local advertising possibilities,” Ms. Martin said. “The Internet is moving at the speed of light, and the next big promise of advertising cash is sitting in local. In Nielsen’s hands those relationships may turn into something that Arbitron didn’t think of.”

Michael J. de la Merced contributed reporting.

Article source: http://mediadecoder.blogs.nytimes.com/2012/12/18/with-arbitron-deal-nielsen-extends-its-overview-of-consumer-habits/?partner=rss&emc=rss