Nielsen Company executive tells students how data drives insights

Art Nielsen Sr., the founder of the Nielsen Company, invented not only TV ratings but the concept of market share, said Frank Piotrowski, senior vice president of measurement science for the company.

“Art said to early clients, ‘You know what you’re shipping to the stores, but do you know what people are buying? And, more importantly, do you know what your competition is doing?’” Piotrowski said during a presentation, sponsored by the Kilts Center for Marketing, at Harper Center on February 17.

Today, Nielsen applies the same concepts of monitoring and analyzing what consumers watch and buy, he said. The company uses its corresponding data, Piotrowski said, to provide clients:

• A clear picture of consumer behavior
• A clearer view of how to reach them
• Clearer information about how to drive growth

Nielsen sells its insights, not just raw data, he said. “Now it’s all about timing.We provide applications to run through the data, so our clients can get to those insights. Just having raw data doesn’t help anybody.”

To provide such analysis, Nielsen collects data from 60,000 stores, visits stores to observe marketing and consumer behavior, impanels 100,000 households to scan all their purchases, and monitors advertising and coupons, he said.

“Store transaction are much more tactical, to measure total sales quantity,” Piotrowski said. “The consumer panels are to learn about buyers. Manufacturers can learn specifics about who buys their products versus their competitors’, what else they buy, and their rate of purchase. Put together store and consumer data, and you learn a lot about consumers.”

As marketers prepare for the future, they must carefully consider four ideas that are evolving, he said:

• Consumers are choosing value over loyalty.
• The marketplace is becoming more flexible.
• The environment is important to consumers.
• Demographics are changing.

“During the recession, people went to private labels, or store brands,” Piotrowski said. “Yet even post-recession, private labels are staying at that same level. That data is saying that consumers are looking more for value now than ever before. If you’re a brand manager, you’re competing with store brands, and you have to understand that those private labels are here to stay.”

Online buying is changing the marketplace, he said. Although just 6 percent of groceries were bought online in 2010, that number was only 1 percent in 2007, Piotrowski said. “That’s a six-fold increase in three years,” he said. “As a result, your shopping trips to the local Jewel grocery store are going to look different because Jewel has to compete with all of the online merchants.”

By 2050, the number of Hispanic Americans, African Americans, and Asian Americans will constitute a majority of U.S. residents, Piotroski said. “The 300 billion dollars in buying power of these groups will almost double to 520 billion,” he said. “To create and market products, you have to make sure you’re hitting all segments of consumers.”

Emil Koulov, ’09, attended Piotrowski’s presentation to hear about the latest developments in marketing research, techniques and methodologies, insights, and demand for such research, he said. “The discussion of validation principles, in terms of data, interested me the most,” Koulov said. “I was interested in what changes consumer preferences and how, along with the economy and the development of new technologies, consumer preferences shift buying behavior.”

--Phil Rockrohr