Monday, June 1, 2009

Arthur Nielsen

Today we honor one of the pioneers of market research whose name has become synonymous with the idea of tabulating what people want—the controversial but hugely influential Nielsen rating.

Arthur C. Nielsen (1897–1980) founded the ACNielsen company in 1923 to conduct marketing research. Prior to the advent of modern market research, firms had to gauge consumer interest in products only after they had manufactured and attempted to sell them, relying on inventory numbers and sales figures to estimate product popularity. Nielsen helped pioneer the system whereby businesses could "test market" their products to selected groups before putting them into mass assembly, distribution, and marketing. He also helped create the idea that you could use random statistical sampling at selected stores to determine a product's market share. All of this information created a revolution in marketing, allowing businesses to understand their markets more accurately and, in the end, to save huge amounts of money that might have been wasted on failed products.

Nielsen's most noted accomplishment was the developed of radio and television audience measurements, the so-called Nielsen Ratings. Though these have been criticized from various angles (potential for response bias, emerging media is more difficult to measure, executives being too quick to cancel shows based on ratings, etc.), broadcasters and advertisers nevertheless get enormously valuable information from the service and create new wealth as a result. By the time he died, twenty-nine years ago today in 1980, his company had revenue over $390 million.

Wikipedia entry
Scripophily website
Article from Journal of Marketing (July 1962)

1 comment:

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