Nielsen Holdings plc (NLSN) Earnings Report: Q4 2015 ... · Nielsen Holdings plc (NLSN) Earnings Report: Q4 2015 Conference Call Transcript ... Nielsen's outlook, expectations, and

CompanyName:NielsenHoldingsPLCCompanyTicker:NLSNSector:ServicesIndustry:Diversif iedServices

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NielsenHoldingsplc(NLSN)EarningsReport:Q42015ConferenceCallTranscriptThefollowingNielsenHoldingsplcconferencecalltookplaceonFebruary11,2016,08:00AMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

KateVanek;NielsenHoldingsplc;SVPofIRMitchBarns;NielsenHoldingsplc;CEOJamereJackson;NielsenHoldingsplc;CFO

OtherPart icipants

ToniKaplan;MorganStanley;AnalystTimMcHugh;WilliamBlair&Company;AnalystDanSalmon;BMOCapitalMarkets;AnalystJeffMeuler;RobertW.Baird&Company,Inc;AnalystTomEagan;TelseyAdvisoryGroup;AnalystAndrewSteinerman;JPMorgan;AnalystSaraGubins;BofAMerrillLynch;AnalystBillWarmington;WellsFargoSecurities,LLC;AnalystToddJuenger;Bernstein;AnalystRyanLeonard;BarclaysCapital;AnalystAndreBenjamin;GoldmanSachs;AnalystBrianWieser;PivotalResearchGroup;AnalystTimNollen;MacquarieResearch;AnalystTracyYoung;EvercoreISI;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator :

Atthistime,IwouldliketowelcomeeveryonetotheQ4full-year2015NielsenHoldingsplcearningsconferencecall.

(OperatorInstructions)

SVPofInvestorRelationsKateVanek,youmaybeginyourconference.

KateVanek(SVPofIR):

Thankssomuch,Operator.Goodmorning,everybody.ThankyouforjoiningustodiscussNielsen'sfourth-quarterandfull-year2015financialperformance.

JoiningmeonthecallfromNielsenisMitchBarns,ChiefExecutiveOfficer;andJamereJackson,ChiefFinancialOfficer.

Theslidepresentationthatwe'lluseonthiscallisavailableundertheeventssectionofourIRwebsiteatNielsen.com/investors.




Beforewebeginourpreparedremarks,Iwouldliketoremindallofyouthatthefollowingdiscussioncontainsforward-lookingstatementswithinthemeaningoftheSafeHarborProvisionsofthePrivateSecuritiesLitigationReformActof1995.Theseforward-lookingstatementsmayincludecommentsaboutNielsen'soutlook,expectations,andprospects,andarebasedonNielsen'sviewasoftoday,February11,2016.

Wewillbediscussingnon-GAAPmeasuresduringthismorning'scallforwhichwehaveprovidedreconciliationsintheappendicesoftoday'spresentation,andwillbepostedonourwebsite.Ouractualresultsinfutureperiodsmaydiffermateriallyfromthosecurrentlyexpectedbecauseofanumberofrisksanduncertainties.TherisksanduncertaintiesthatwebelievearematerialareoutlinedinNielsen's10-Kandotherfilingsandmaterialswhichyoucanalsofindonourwebsite.

FortheQ&A,aswedoeverytime,weaskeveryonetolimitthemselvestoonequestiononly,sothatwecanaccommodateasmanypeopleaspossible.Feelfreetojointhequeueagain,iftimeremains,andwewill[recall]you,andyouknowthatyoucanalwaysreachusimmediatelyafterthecall.Andwiththat,IwouldliketoturnitovertoourCEO,MitchBarns.

MitchBarns (CEO):

Thanks,Kate.Goodmorning,everyone.Thanksforjoiningusonthecall.

2015wasabanneryearforNielsen.Onaconstantcurrencybasis,wepostedanotheryearofmidsingle-digitrevenuegrowth,marginexpansionandrecordfreecashflow,despitethevolatileeconomicbackdrop.Steady,consistentandresilient,that'swhoweare.

In2015,ourtoppriorityandbiggestaccomplishmentwastotalaudiencemeasurement,ourcomprehensivesystemthatprovidescomparablemeasurementacrossallscreensandplatforms.Today,totalaudienceishere,it'sinthemarket,andit'sgainingtractionwithourclients,andIamextremelyproudofourteam'sexecution.

Lookingatthebusinessmorebroadly,leveragingourmeasurementandanalyticstohelpourclientsmaketheimportantconnectionsthatdrivetheirbusinessiswhatwe'vedonefornearly93years.Andinaworldofgrowingcomplexityandspeed,ourplatform-basedsystem-orientedapproachisnicelyalignedwithwhereourclientsaregoing.Ithelpeddriveanumberofwinsacrossourwatchandbuysegmentsin2015.

Let'stakeaquicklookatourfinancialperformanceforthefullyear.First,wehadstrongrevenuegrowth.Onaconstantcurrencybasis,2015revenuesgrew5%,0.5pointbetterthanourcorerevenuegrowthin2014.AdjustedEBITDAwasup7.2%constantcurrency,reflectingthescalabilityofourbusinessmodelandongoingproductivityimprovements.Adjustednetincomepersharegrew12.4%constantcurrencyto$2.63.

Freecashflowwasarecord$804million,up18%overtheprioryear.Ourstrongfreecashflowgivesustheflexibilitytoinvestinourgrowthinitiatives,whilealsoreturningcashtoourshareholders.Throughourdividendandsharerepurchases,wereturnedover$1billiontoshareholdersin2015.InDecember,weannouncedanadditionalsharebuybackauthorizationof$500million,bringingthistoatotalofapproximately$850millionatyearend.Drivingshareholdervaluethroughcapitalallocationremainsakeypriorityforus.

Acquisitionsarealsoanintegralpartofourbalancedcapitalallocationstrategy,andthestandoutacquisitionforusin2015waseXelate,whichaddedtoourabilitytohelpbuyersandsellersofadvertisingactwithmoreprecisionandspeed.Importantly,weleveragedthisacquisitiontocreateanenterprisemarketingplatform,EMP.ThesystemconnectsNielsendatawithawiderangeofotherdatasourcesto




helpadvertisersmovefromtargetingsegmentsofconsumerstoaddressingindividualconsumers.It'sapowerfulcapability.Lastly,wearereiteratingourguidancefor2016.

Next,let'stakealookatthefourthquarterhighlights.First,watch.Fourthquarterwatchrevenuesincreasedjustover5%.Inadditiontothegrowthfromourtraditionalclientbase,we'realsoseeingfastergrowthwithourdigitalclients,includingthebigplayerslikeGoogleandFacebook.Bytheway,weannouncedlastmonth,thatwe'llbeaddingFacebookconversationstoourexistingTwitterfeedtofuelourNielsensocialcontentratingsforTVprograms,previouslyknownasNelsonTwitterTVratings.WeplantoaddInstagramdatainthenearfuture.

Ourtotalaudiencemeasurementframeworkwasakeydriverofourperformanceinthequarter.Onourlastcall,wetalkedaboutthefourphasesweseeastheindustrymovestowardadoptionofthenewcurrency,execute,evaluate,adopt,andtransact.First,execute.We'vedonethis.Thesystemisbuilt,andit'savailableinthemarket.Webroughtmorethantwodozendeliverablestothemarketplacein2015alone.

Next,evaluateandadopt.Theseareiterativesteps,andthisisbydesign.Ourclientsneedtimetoassesshowthenewmetricswillimpacttheirbusiness.Andtheyneedflexibility,astheyexploredifferentwaystomonetizetheircontent,andwebuiltthatflexibilityrightintothesystem.

Let'slookatsomeofthekeycomponents.First,digitaladratings.Digitaladratingsisnowin17countries,covering85%ofglobaldigitaladspend.Revenuedoubledin2015.

InJanuary,wesuccessfullycompletedourbetaperiodonGoogle'sDoubleClickplatform.Sowe'renowfullylivewithDoubleClickineightcountries,andoursistheonlyindependentdigitaladvertisingmetricavailableintheDoubleClickplatformoutsidetheUS.Wealsocontinuedtogainsharewithmajoradvertisers,andthemostrecentisMondelez,whohaschosenNielsenasitsdigitaladvertisingmeasurementprovider.

MovingontoVOD,in2015,welaunchedseveralnewmeasurementsolutionsenablingustocoveravarietyofvideoondemandviewingsituations.Ifit'sVODorDVRviewingfromyourcable,satelliteortelcoprovider,nomatterwhetherit'sseenwithin3days,7days,orupto35daysoftheoriginalairing,wemeasureit.Ifit'sVODfromoneofthepopularsubscription-basedorad-supportedVODproviders,wemeasurethattoo.

We'redoingexactlythatnowforawiderangeofnetworksandstudios.Wenowcoverover6,000differentprogramepisodes,mostofwhichareviewedthroughNetflix.Altogether,ourclientsareusingthesevariousnewmetricstodrivebothcontentlicensingandadvertisingmonetizationdecisions.

Next,digitalcontentratings.OurprogresswiththisrolloutcontinuedinQ4andintothisyear.Adiversegroupofnetworks,MPDVsandpublishersarealreadyfullyoperationalwithanotherdozenorsocurrentlyinprocess.Notably,amajorvideodigitalplatformwillbeginreceivingdatafromusnextweek.

Aswesaidbefore,ourapproachtomeasuringeachoftheparts,inthiscaseVOD,digitalvideoandlinearTV,istoensurethemeasurementofeachiscomparable,sotheycanbeputtogethertoformtotalcontentratings.TheabilitytoprovidethiscomprehensiveviewoftheconsumerisuniquetoNielsen.It'swhatenablesustoprovideourclientswithadeduplicatedviewoftheirtotalaudience,puttingtelevisionanddigitalvideoonanevenplayingfield,whichiscrucialtohowourclientsthinkabouttheirbusinessgoingforward.Wenowhaveover70individualnetworkssignedupfortotalcontentratings,andasmoreclientsenablemeasurementoftheirdigitalandVODcontent,thatnumberwillcontinuetogrow.

We'vealsoinvestedinourmeasurementoflineartelevisionviewing.In2015,weeffectivelydoubledthesizeofourgold-standardUSpanel.Theworkiscomplete,andtheratingsareliveinthemarkets,andthe




largerpanelprovidesgreaterratingstability,importantespeciallyforthesmallernetworks.Italsoaddsmoreanalyticalpowertoourtotalaudiencemeasurementsystem.

Infact,alloftheseinitiativescontributetothegrowingadoptionofNielsen'stotalaudiencemeasurementsystem,whichleadsustothefourthphase,transact.AswementionedatourDecemberAnalystDay,we'vehadsuccessfulmeetingswithafullrangeofkeyindustryleaders,regardingtheneedtomovethecurrencydefinitionbeyondthecurrentC3andC7.Additionalmeetingswilloccuroverthenextfewweeks.

Ourclientsarehighlyengaged,andthereisbroad-basedcommitmenttoredefinethecurrencytoonethat'smorereflectiveofhowtoday'sconsumerswatchcontent.We'reconfidentthatnomatterhowthecurrencyisredefined,ourtotalaudiencemeasurementsystemwillsupportit.Inthemeantime,weknowit'salreadyhelpedshapehowourclientsareapproachingandthinkingaboutthe2016upfronts.

BeforeIleavewatch,andturntobuy,Iwanttotouchonmarketingeffectivenessbusiness.Wehadanotherstrongquarter,withrevenueupmorethan30%,aswecontinuedtohelpbothbuyersandsellersofmediadrivethebettermarketingROI.WestrengthenedourpositioninthisareaduringthefourthquarterbyincreasingourstakeinNielsenCatalinaSolutions,abusinessthat'sperfectlyalignedwithourstrategy.

Turningtobuy,asweclosed2015,ourbuybusinesscontinuedtostrengthenandexpand.Revenuesgrewnearly6%inthequarter,ledbyemergingmarkets,aswellasasolidgrowthinkeydevelopedmarkets,includingtheUSandEurope.Wecontinuedtowinnewclientsintherelativelyfastergrowingmidtierandsmallclientsegments.Justlastweek,DoleFoodsnamedNielsenastheirpreferredproviderofconsumerinformationandanalytics.

Wealsocontinuedtostrengthenourpositionswithretailersaroundtheworld.Retailersarelong-timedatapartnersforNielsenbuttheyalsohaveagrowingneedforouranalyticstohelpwiththeiradvertising,marketing,andmerchandisingdecisions,bothonlineandoffline.Ourbusinesswithretailerssawstronggrowthin2015,boostedinpartby40newe-commerceclientsworldwide.

Emergingmarketsgrew8.4%inQ4,despitemorechallengingeconomicconditionsinmanykeymarkets.You'veheardussaybefore,thatwhenourteamsexecutewell,theyareabletofindgrowthevenwhenGDPgrowthslows,becausewe'restillgainingpenetrationinmanyemergingmarkets,andourresultsillustratethis.Forexample,inthreekeymarkets,Brazil,RussiaandTurkey,ourbusinessgrewdouble-digits,wellabovetheGDPgrowthinthosemarkets.

Thesecretherereallyisn'tanysecret,itcomesdowntogoodold-fashionedexecutionbyourteams,takingourprovenproductportfoliotonewclients,whilehelpingourexistingclientsmanagethroughthechangingmarketconditions.Ourteamsdidagreatjob.

Developedmarketsalsoexitedtheyearwithgoodmomentum.Revenuesincreased4.8%inQ4.AndnotablythiswashelpedbyEurope,wherewe'restartingtoseegrowthattheregionlevel,lowsingle-digits,butgrowthandwe'rehappytohaveit.

Inparallelwithtotalaudienceonthewatchside,ourbuybusinessisbuildingitsownversioncalledtotalconsumermeasurement.Theideaistomeasureallconsumerpurchases,asbuyingbehaviorcontinuestofragmentacrosschannelsandsegments.

Asmillennialscarvethepathforanewwaytobuy,forinstance,e-commerce,mobiledevicesandsubscriptionmodels,wetoo,arecarvingoutnewwaystomeasurethefullrangeofconsumerpurchasing,followingtheprovenformulathatcombinesourhigh-qualitypanelswithbigdata,toprovidethequality,granularityandefficiencythatourclientsrequire.




Measurementisthecoreofourbusiness,andourobjectiveisfullcoverage,totalaudienceinwatch,totalconsumerinbuy.Wedon'tmeasurejustonescreenoronechannelofdistribution.Ourobjectiveistomeasureallofthem,andwedothatbyfocusingon,andfollowingtheconsumer.

BeforeIclose,letmerevisitthethreemajortrends,andtherelatedkeyinvestmentsthatwilldriveourgrowthin2016andbeyond.Thefirstisthewell-knowntrendthataudiencesarefragmentingacrossscreensandplatforms.Andforus,thatmeansourmeasurementneedstocoverallviewingenvironments,providingcomparablemetricsforeach.Ourtotalaudiencemeasurementsystemdoesexactlythat,anditsadoptioncontinuestogrowamongourclients.

Thesecondis,theconsumersarereactingtoaddsandbrandsdifferently,andthey'rebuyinginnewways,andacrossnewchannels.Advertiserswanttoharnessthepowerofbigdatatoenablethemtomarkettothosechangingconsumerswithgreaterprecision,andwithprovenROIontheirmarketingspend.Thisiswhatourenterprisemarketingplatformenables.

Thethirdtrendisthatourclient'sinformationandanalyticsneedsaregrowingandchanging.Clientswantdataandsystemsthathelpthemtoact,andtheywantmoreefficiency,speedandprecision.ThisisthebasisforourinvestmentineXelateandtheenterprisemarketingplatformthatIjusttalkedabout.Butit'salsothebasisforourinvestmentinourbuyplatform,theconnectedbuysystemthatyouheardustalkaboutatourAnalystDayinDecember.

Clientswanttoknowwhatconsumersarebuying,whythey'rebuyingit,andwhatactiontheyshouldtakenext.Inallthreekeyareas,ourplatform-oriented,system-basedapproachprovidesscalability,flexibility,andspeed,especiallywhenoursystemsconnectdirectlytoourclientssystems.Andbecauseweowntheessentialcoredata,nooneisbetterpositionedtodoitthanNielsen.

Tosumup,wefeelgreataboutourprogress,andconfidentabouttheyearahead.Whilewecertainlydon'twishfordifficulteconomicconditions,we'rereadyforthem.Infact,weknowfromexperiencethatwheneconomicconditionsgrowmorechallenging,ourbusinessmodel'sadvantagesandstrengthsshowthroughmoreclearly.Overtoyou,Jamere.

JamereJackson (CFO):

Thankyou,Mitch.ItwasagreatyearforNielsen,andIamespeciallyproudofthecontributionsofmycolleaguesaroundtheworld.Ourteamshavehadalaser-focusonexecution,andoureffortsarereflectedinourfourthquarterand2015results.OurresultsarealsoindicativeoftheconsistencyandresiliencyoftheNielsenmodel,andourabilitytodeliversolidresultsthroughthecycles.

First,letmegiveafewmoredetailsonour2015performance.Revenuewasjustunder$6.2billion,up5%constantcurrency,whichisslightlyabovethehighendoftherevenuerangewegave.

Wehavedelivered38consecutivequartersofconstantcurrencyrevenuegrowth,behindsolidexecutiononourgrowthinitiatives.Ourwatchbusinessgrew4.9%onaconstantcurrencybasis,andweenter2016withgreatmomentumbehindourtotalaudienceexecution.Ourbuybusinessgrew5%,asourinvestmentsintheemergingmarketsandnewclientwinscontinuetodeliversolidgrowth.

AdjustedEBITDAwasjustunder$1.9billion,up7.2%constantcurrency,andadjustedEBITDAmarginswere30.1%,up61basispointsonaconstantcurrencybasis,asweexecutedonourproductivityinitiatives,anddeliveredmarginexpansioninbothourwatchandbuysegments.Adjustednetincomewas$975million,up8.5%constantcurrency,anddilutedadjustednetincomepersharewas$2.63,up12.4%versusprioryearonaconstantcurrencybasis.Ouradjustednetincomepersharegrowthwasdrivenbysolidoperatingearnings,andexecutionofoursharebuybackprogram.




Wegeneratedrecordfreecashflowof$804million,up18.1%versusayearago.Ourfreecashflowconversionofadjustednetincomewas82%,up12pointsversusayearago,drivenbyEBITDAgrowthandworkingcapitalmanagement.AndasIlookahead,Icontinuetoseeopportunitiesforworkingcapitalefficiencieswithinourbusinessthatwillcontinuetodriveourfreecashflowgrowth.

Finally,wedeliveredarecord$1.1billionbacktoshareholdersintheformofdividendsandbuybacksin2015,demonstratingourcontinuedcommitmenttodriveincrementalshareholdervaluethroughcapitalallocation.Again,agreatyear,andsolidexecutionbyourteamsaroundtheworld.

Letmemovetothefourthquarter.Revenuewas$1.6billion,up5.6%constantcurrency.Wehadastrongfinishtotheyear,withsolidrevenuegrowthinbothwatchandbuy.AdjustedEBITDAwas$531million,up7.1%constantcurrency,andadjustedEBITDAmarginswere32.7%,up45basispointsonaconstantcurrencybasis,aswedeliveredmarginexpansioninbothourwatchandbuysegmentsforthesixthconsecutivequarter.

Adjustednetincomewas$300million,up3.1%constantcurrency,anddilutedadjustednetincomepersharewas$0.82,up7.9%versusprioryearonaconstantcurrencybasis.Finally,wegenerated$306millioninfreecashflow,upanimpressive16.3%versusayearago.However,ourcashflowperformancewassignificantlyimpactedinthequarterbytheseverefloodinginoneofourmajorcollectioncentersinChennai,India,aswellascurrencyimpactsfromthestrongerdollar.Despitethis,wefinishedwithoursecondhighestquarterlyfreecashflowperformanceever.AsMitchsaid,wefinishedtheyearonastrongnote,andwehavetremendousmomentumheadinginto2016.

NextI'llmovetothesegments.Firstisourwatchsegment.Ourwatchsegmenthadanothergreatquarter.Revenuewas$745million,up5.2%constantcurrency.Ourgrowthinitiativesperformedwell,asaudiencemeasurementex-audio,whichwenowrefertoasaudiencemeasurementofvideoandtextwasup7.6%.

Aswetalkedaboutlastquarter,audiowasdown6.9%,asthetimingofsomedeliverieswererealizedinthethirdquarter,whichdidnotrepeatinthefourthquarter.AndforthoseofyouwhohavefollowedussinceweacquiredArbitron,youwillrecallthatourdeliveriesdonotalwayssyncupwiththequarterlycalendar,causingaudioresultstoappearlumpy.Butin2015,thehighlyprofitableaudiobusinessdeliveredlowsingle-digitrevenuegrowth,outstandingmargins,andstrongfreecashflow.

Marketingandeffectivenesswasup31.3%behindstrongquartersintheeXelateproductofferings,andtheperformanceoftheNielsenCatalinaSolutionsorNCSjointventure,whichweincreasedourownershipstakein,infourthquarterasImentionedatAnalystDay.We'llalsopointout,thatyouwillseeinourfilingsandGAAPnetincomewalkthatwerealizeda$158millionnon-operatinggainonthestep-upinourbasisinNCS,asaresultofournon-majoritystakeinthejointventure.Ourmajorityownershipstakecontributedabout1pointtoourwatchrevenuegrowthinfourthquarter.

In2015,marketingeffectivenesswasup21%,aswetransformedtheportfoliobymakinginvestmentsineXelateandNCS,whilemeetingthemarket'sgrowingdemandforsolutionsthathelppublishersandadvertisersbetteridentify,acquire,andretainaudiencesacrossallscreens,devicesandformats.Asexpected,andaswehighlightedinourlastquarterlycall,wehadnearlya2point[drag]onwatchrevenuefromtheproductsinourotherwatchbucket.WedivestedtheNRGbusinesslateinthefourthquarter.AndyoushouldalsonoteinourfilingsandGAAPincomewalkthatwerealizedan$18millionnon-operatinggainonthetransaction.

Ourgrowthinitiativesaredelivering.Digitaladratingscontinueditsmomentum,reflectingstrongdemandfromadvertisers,agenciesandmediaowners.Digitaladratingsisanimportantofferinginourtotalaudiencemeasurementframework.Andin2015,ourrevenuenearlydoubled,asweaddednewclients,andexistingclientsincreasedthenumberofcampaignsversusayearago.Oursubscription




video-on-demandanddigitalContentratingsproductscontinuedtogaintractionwithourclients,givingustremendousconfidenceandmomentumheadinginto2016.

WatchadjustedEBITDAwas$[343]million,up6.9%onaconstantcurrencybasis.Watchmarginsexpandedastrong70basispointsonaconstantcurrencybasis,aswecontinuedtodriveoperatingleverageinthebusiness.Ourwatchsegmentremainsstrong.Wehaveexecutedontotalaudiencemeasurement,investedtotransformtheportfolio,andournewproductsandinitiativesaregainingmomentum.

Turningtobuy,ourbusinesshadastrongfourthquarterandasolidyearin2015.Fourth-quartertotalbuyrevenuewas$879million,up5.9%onaconstantcurrencybasis.Ourbusinessinthedevelopedmarketswas$607million,up4.8%onaconstantcurrencybasisbehindrelativestrengthintheUSandEurope.Inaddition,wesawsomeone-timediscretionaryspendpickupthatledtoareallystrongquarterandfinishtotheyear.

Ourbusinessintheemergingmarketswas$272million,up8.4%onaconstantcurrencybasis.Ourteamsareexecutingagainstatoughbackdropofchallengingmacroeconomicconditions.Wesawbroad-basedgrowthintheemergingmarkets,withdouble-digitgrowthinLatinAmerica,theMiddleEast,andGreaterChina,alongwithhighsingle-digitsinAfrica.Emergingmarketrevenuegrew8.5%in2015,andI'mverypleasedwithourteamsexecutioninthesemarkets.

BuyEBITDAwas$195million,up7.1%constantcurrency.OurbuyadjustedEBITDAmarginswereup25basispointsinthequarter.Thisisthesixthstraightquarterofbuymarginexpansionaswehaveworkedtoimproveprofitability,whilewecontinuetoinvestinourproductsandexpandcoverageintheemergingmarkets.Overall,wehadagreatquarterinbuy,withsolidrevenuegrowthandmarginexpansiononaconstantcurrencybasis.

Movingtoforeigncurrencyimpact.IwanttoremindyouthatwereportrevenueinEBITDAonaconstantcurrencybasistoreflectouroperatingperformance.Wegenerallydon'ttakeontransactionalrisk,sothisslidefocusesstrictlyonthetranslationimpactforreportingpurposes.Inthequarter,foreigncurrencyresultedina620basispointsdragonrevenue,anda[580]basispointsdragonEBITDA,whichrepresenteda$0.02ashareearningsheadwind,versusourthird-quarterearningscall.

For2015,foreign-currencyimpactedouradjustednetincomepershareresultsby$0.21.Ifyesterday'sstockratesheldconstantthrough2016,thenweexpecta210basispointsdragonrevenue,and140basispointsdragonEBITDAforthefullyearof2016,whichrepresentsanincremental$0.02asharedragontheadjustednetincomepershareguidancethatwegaveinDecember.

Movingto2016guidance.Wearemaintainingour2016(inaudible)pershareguidance,despiteanadditional$0.02ashareheadwindfromFX.WeremainconfidentinourplantoexecuteanddeliveronalltheoperationalelementsthatwelaidoutinDecember.

Sotowrapup,we'reverypleasedwithourexecutioninthefourthquarterand2015.Wehavealotofconfidenceandmomentuminbothofoursegmentsasweheadinto2016.Andinaddition,wearecommittedtoanefficientandbalancedcapitalstructurethatwillenableustogrowourbusiness,andreturnover$800millionincashbacktoshareholdersin2016intheformofdividendsandbuybacks.Andwiththat,I'llturnitbacktoKate.

KateVanek(SVPofIR):

Great.Thankyou.We'llnowturntoQ&A.

QUESTIONS&ANSWERS




Operator :

Thankyou.

(OperatorInstructions)

OurfirstquestioncomesfromlineofToniKaplanwithMorganStanley.

T oniKaplan (Analyst-MorganStanley):

Thankssomuch.Goodmorning.Audiencemeasurementgrowthwasreallystrongthisquarter,evenwithaudiodownmorethanexpected.Couldyougiveussomeadditionalcoloronwhatdrovethecoregrowth?Wasitdigitaladratings,orwasitsomethingelse?Andifyoucouldgiveusyourupdatedthoughtsonthetotaladdressablemarketfordigital,thatwouldbereallygreat?Thankyou.

MitchBarns (CEO):

Well,Iwillstart,andthenJamereyoucanadd.Toni,onethingImentionedisthatwe'renotonlyseeingthenormalstronggrowththatwehavewithourtraditionalclients,butalsowe'veseenacceleratedgrowthwithsomeofthedigitalclientsthatwe'reworkingwith,prettybroadrangeoftheminthemarketplace.ImentionedGoogleandFacebook,butthereisanumberofothers.

Oneoftheareasthathaslongbeenastrength,astronggrowerforusinthisarea,isourworkwiththeadtechworld,theadexchanges,theadplatformswhereourdigitaladratingsmetricinparticularhasplayedverywell.AndalsoaswebringeXelateintothepicture,itjustraisesourgameinthatarea,andsothat'scontributed.Jamere?


Yes.Soaswementioned,thecoreofourbusinessremainsverystrong.Andifyoulookataudiencemeasurementinthequarter,whichwearenowcallingaudiencemeasurementofvideoandtext,itwasup7.6%.Nowrecallinthethirdquarter,weguidedtoanumberthatwasinthe4%to4.5%range.

Wecameinalittlehotterthanthatinthequarter,andthedifferencetherearetwothings.One,theNCSjointventure,themajoritystakeclosedalittlebitsoonerthanwehadanticipated,andNRGclosedalittlebitlaterthanweanticipated,andasaresultofthatwewereupabout1point.

AndthenIthinkyourlastquestionwason--justtofinishup,yourlastquestionwasonthetotalopportunityasitrelatestodigital.Backacoupleofyearsago,wesaidthatthiswaspotentiallya$500millionmarketopportunity.Westillseethatasbeingthecase.Andwe'reintheearlyinningsofthatobviously,butweareveryconfidentintheproductsthatwehaveinthemarketplace,andintheadoptionthatwe'reseeingfromourclients.

KateVanek(SVPofIR):

Nextquestion?

Operator :

TimMcHughwithWilliamBlair.

T imMcHugh (Analyst-WilliamBlair&Company):

Yes,thanks.IwaswonderingifyoucouldjustelaboratealittlebitmoreonUSandEurope,partsofthebuysegment?Iknowyousaidnewclientwins,andyoutalkedalittlebitaboutthat,butwhat'sresonatingwithclients,andhowmuchofthatisamacro,indicationoftheactivitythere?AndIguess,in




thecontextofwhatyousee,orhearfromthemasyoucomeinto2016here?


Yes,thisisJamere.Soacoupleofthings,one,weseethediscretionaryspendenvironmentasbeingprettystable.Weseeourclientsinvestinginanalyticsandinnovationtohelpthemdrivetoplinegrowth.Andyou'veseenfromanumberofCPGclients,asthey'vecomeoutofarestructuringcycle,thatthey'repivotingtogrowthbyinvestingininnovation.

SotheUSforuswasuplowsingle-digitsinthefourthquarter,butupmidsingle-digitsfor2015.AndinWesternEurope,wesawourbusinessbeingupmidsingle-digits,behindstrongresultsfromnewclientwinsandinnovation.Sowefeelverygoodaboutwhereweareinthecycle,andourclientsarestartingtoseesomegrowth.

MitchBarns (CEO):

I'lljustaddthatwehavementionedsomeoftheseclientwins.Wedon'tmentionthemall.Wehavealotmorethat--thanwhatwementioned.Wedon'talwaysgetthefullsupportofourclientstobroadcasttheseonthesecalls,butsomethatwehavementionedinpreviouscalls,(inaudible)arenowknownas[RB&Cody],wouldobviouslyplayintoit,andonthiscallwementionedDoleFoodsearlier.

RetailersisanotherthingIwouldcallout.We'veincreasedourfocusonretailersoverthepastyear.Thisisaglobalopportunityforourbusiness,butinparticular,animportantopportunityforusindevelopedmarkets,whereretailenvironmentsarealittlemoreconsolidated.Andso,theirprofileinthemarketisraised.

Andwhatwefindis,whileretailershavelongbeendatapartnersforNielsen,andthey'vealsolongbeenclientsofourcapabilities,bothmeasurementandanalytics,theirneedfortheanalyticscapabilitieswehavehasbeengrowinginrecentyears,tohelpthemwiththeirpricingandtheirmerchandising.Andnowmorerecentlywereseeingtheirneedsforourwatchasset,tohelpthemwiththeiradvertisingdecisions,growingaswell.Andtheyarebigadvertisersasyouwellknow.

Andso,retailersofanimportantpartofourbuybusinessgrowth,andinparticularindevelopedmarkets,andweseeverystrongopportunityforourbusinesswithretailersgoingforward.Andinfact,ifweweretosizeitgoingforward,wewouldsaythattheyrepresentasmuchasa0.5pointofgrowthforourbusinessoverthenextthreetofiveyears,0.5pointperyearoverthenextthreetofiveyearsatagloballevel.That'showsignificanttheopportunityweseewithretailersis.

Operator :

DanSalmonwithBMOCapitalMarkets.

DanSalmon (Analyst-BMOCapitalMarkets):

Goodmorning,everyone.Mitch,youmentionedbeforethatthestrengthinthewatchsidewasbeinghelpedbyDARs,deeperpenetrationintotheadtech,andtheprogrammaticmarketplace.I'mcurious,howmuchiseXelatehelpingopenupthoseconversationsforyou?

Andwouldyouconsiderthose--mostofthoseclientstofallinthesmallandmedium-sizedclientbucket?Andthensortofseparatebutrelatedly,iseXelatehelpingyouopenupconversationswithlargerclientsaswell,thatcouldbeintheadtechspace?Iknowyou'vementionedpublicly,thatGooglebeingagrowingclientofyours.Butmaybeeveninotherpartsofthebusiness,whereeXelateisopeninguplargeclientconversations?




MitchBarns (CEO):

That'sagreatquestion.Ithinkwhat'simpliedbyyourquestionis,exactlywhatourexperiencehasbeenthat,thebigclients,thesmallclients--thisisanecosystemthatisasconnectedasanyotherthatweworkin,acrossourbusiness,aroundtheworld,andeXelatehashelpedusoneveryfront.First,credibility,theyhaveamazingtalent.Theyhaveaproven,verystrongcapabilities.ThosenowbeingpartofNielsenportfoliogivesusmorecredibilityinthisarea,thanweotherwisewouldofhad,hadwejustcontinueddownthepaththatwewereon.

Wealsobringalottotheparty,butconnectingwhatNielsenhashistoricallyhad,andhasbeendevelopinginrecentyearswitheXelate,whattheybringintoourportfolio,hasjustacceleratedourprogresswithboththesmallandwiththelargerplayers,becauseagain,theyareallconnectedatsomelevel.Andit'snotjustcoincidencethatGooglehasemergedoverthelastyearorsotobeoneofourlargestwatchclientsintheworld.Andso,yes,itreallyspeakstowhatunderliesyourquestion.

Soagain,wefeelgreatabouttheeXelateacquisition.Thebusinessitselfthatweacquiredperformedincrediblywellin2015.Butevenbeyondthatbusiness,atP&L,it'stheassetsandthetalentthatcameintoNielsenthatarecontributingallacrossourportfolio,thatwe'realsoseeingbigvaluefromthat.Jamere,youhavesomethingtoadd?


Yes.Thethingthatreallystandsouttous,andthereasonthatwe'resoexcitedabouttheacquisition,isthateveryclientthatweworkwith,onboththewatchandthebuysideofourbusinessislookingforaccuratedatatotargettherightaudience.Andwehavetheserelationshipswithover200onlinedataproviders,andwe'reworkingwithover125mediaplatforms.Sowe'reinallrightconversations,andwehaveanopportunitytoaddressbothlargeandsmallclients,justbasedonthefootprintandcapabilitiesinsidethisbusiness.

Operator :

JeffMeulerwithBaird.

Jef f Meuler (Analyst-RobertW.Baird&Company,Inc):

Yes,thankyou.Iknowyouguysinthepasthavehighlightedsomevideoaudiencemeasurementclientsthatarenotadsupported.CouldyoujusttalkabitmoreabouthowtheyuseNielsendata?Andthen,dotheypayyousimilarratesforratingtheircontent,asnonadsupportedclients,forasadsupportedclients?

MitchBarns (CEO):

Well,whatwe'redoinginthisarea,withrespecttomeasurementofVOD,bothadsupportedandsubscription-based,isreallyservingtheentiremarket.Whetherit'soneofthoseplatformswhoisthesourceofthatvideocontent,orwhetherit'sanetworkorstudiowhomightbelicensingthatcontenttothatsameplatform.

Sowe'vemadetheseVODmeasurementcapabilitiesavailable,bothVODviewedthroughthecableortelcoorsatelliteprovidersset-top-box,aswellasVODviewedover-the-top,ifyouwill,throughaconnecteddevice.Andwe'remeasuringallofthose,differentwaysthatconsumerswatchthiscontent.

Imentionedearlier,we'renowcoveringmorethan6,000differentprogramepisodesinthemarketplace,andservingawiderangeofclientsaswedothat.Andso,sometimesitis,theoriginalownerofthatcontentwantstomakesurethatthey'relicensingittothatplatformforafeethat'sconsistentwithwhat




itsvalueis,giventhesizeoftheaudience,andtheappetiteforthatcontent.

Insomecases,yes,itmightbeastudiowhoisproducingitoraotherplayer.Sowe'rereallyservingamuchbroaderrangeofneeds,amuchbroaderrangeofclientsthenjusttheoriginalsourceofthatcontentitself,theplatformitself.

Insomecases,theplatformmightsay,well,look,Ialreadyhavealotofdataaboutjusthowmuchviewingishappeningonmyplatform.TheymightnotfeelagreatneedforwhatNielsenbringsthepartythere,andthat'sokay.Werespectthat,butthey'restillotherplayerswhoarelicensingthatcontenttothem,whodowantmoreinformationabout,howmuchviewingishappening,andhowdoesitcomparewiththeotherplacesthattheymightchoosetolicensethatcontentinstead.

Operator :

TomEaganwithTelseyAdvisoryGroup.

T omEagan (Analyst-TelseyAdvisoryGroup):

Great.Thankyouverymuch.Aquestionon2016margins.JamerehadmentionedatAnalystDaythatbuymarginswouldbeabiggercontributortooverallmargingrowthin2016.Giventhe50to70basispointmargingainguidance,whatdoesthatmeanforwatchmarginsin2016?AndthenIhaveafollow-up.Thanks.


Great.Sowedidgiveguidancefor50to70basispointsofmarginexpansion,andthatisonatotalCompanybasis.Andwedoexpecttobuytobeaslightlybiggercontributorin2016.Thereasonforthatisreallytwokeydrivers.

Numberone,we'recontinuingtoscaleintheemergingmarkets,andwehaveafocusonprofitability.Andasthoseinvestmentsthatwe'vemadeintheemergingmarketscontinuetoscale,thenbuymarginsaremovingintherightdirection.Andyou'veseenbuymarginsexpandoverthelastsixquarters,andweexpectthattocontinueinto2016.

Andthen,theseconddynamicisthatwe'rejustrunningtheplacewithintensityaroundcostsandproductivity.We'vedonethatforanumberofyears,andwe'regoingtocontinuethatin2016.Sowefeelgoodaboutthe50to70basispointsofmarginexpansionintheCompany,andweexpectbuytobeabiggercontributor.

Nowintermsofwatchin2016,2016isaninvestmentyearforus,aswelooktorolloutournewproductcapabilities.Andthatinvestment,isn'tnecessarilyinthetraditionalOpExthatyouwouldexpect,butwe'regoingtoaddalotofcommercialcapabilitiestohelpusgoafterthegrowthopportunitieswithdigitalclients.Andso,youcanexpectmarginstobepositiveinwatch,andwe'regoingtomanagethetotalCompanyto50to70basispoints,andyou'regoingtoexpectbuytobeabiggercontributorin2016.

T omEagan (Analyst-TelseyAdvisoryGroup):

Great.Secondly,IhaveaquestionaboutthepotentialforCPMdeflation.OneconcernI'veheardfromTVnetworksaboutcombininglinearanddigitalvideoratingsisthatthere'saprospectforCPMdeflation,meaningthehigherCPMofdigitalvideodecliningtothelinearCPM.Soanythoughtsyouhaveonhowthiscanbeavoidedwouldbegreat?Tanks.

MitchBarns (CEO):




Yes,that'scommonconversationintheindustry.AndIthinkthere'ssomethingsthatwillcounterthat,sowe'llseesomeforcesthatwillpushitthatdirection.We'llseeotherforcesthatwillcounterbalancethat,andoneofthemisprecision.Becauseyouhavethis--allthesedatasetsthatarebeingconnected,greattoolsbeingbuiltbyNielsenandothersfromananalyticscapabilities,thatenablemoreandmoreprecision.

Notonlyinthedigitalworld,buteveninthelinearworldgoingforward.Andthatincreasedprecisionmeanslesswasteintermsofadvertisingexposuresthatpeoplepayfor,andthatwillbeapositivedriveroncosts,onCPMs.

Andinaddition,Ithinkwe'realsocontinuingtoseepeoplerealizingtheimportanceofreach.Whileyoucangetincredibleprecisionsometimesinthedigitalworld,it'shardtohavethat,andreachatthesametime.Andit'sonereasonwhylineartelevisioncontinuestoholdupsowell,evenwithalloftheforcestryingtopullviewersaway.Lineartelevisionstilldeliversincrediblereachinthemarketplace,andadvertisersknowthatreachdeservesapremium,intermsofgettingtheiradvertisingmessageouttobrands.

Thefirstexposureofmyadtoaconsumeristhebestone,andsoreachiswhatIamreallyseekingfor,firstandforemost.Nottheonlything,butfirstandforemost.AndsothatwillbeasecondpositiveforcethatwillcontinuetosupporttheevolutionoftheseCPMsinthemarketplace.Somepluses,someminuses,we'llseewhereitplaysout,howeveritplaysout.Ourtotalaudiencemeasurementsystemwillnotonlymeasureit,butenlightenpeopleastowhatthey'reactuallygettinginthemarketplace,andhowdoesitcomparewithwhattheyhopedtogetwhentheyplanned.

Operator :

AndrewSteinermanwithJPMorgan.

AndrewSteinerman (Analyst-JPMorgan):

Hi,it'sAndrew.Twoquestions.Ofthetotal5.6%constantcurrencyrevenuegrowthinthequarter,howmuchwasorganic,adjustingforbothacquisitionsanddivestitures?Andmysecondquestionis,couldyoujustmentionwhattheNCSJVownershipwentfromandto?


Yes.SoonyoursecondquestiononNCSJV,itwentfrom50%to63.5%.Andthen,ifyoulookatthepiecesintermsoforganic,youhadabout1.5pointinthequarterthatcamefromtheNCSandeXelatepiecesinthewatchbusiness.Andthenyouhad,inthebuybusinesses,areprettycleanfromanorganicstandpointinthequarterso.

KateVanek(SVPofIR):

Nextquestion,operator?

Operator :

Thankyou.YournextquestioncomesfromlineofSaraGubinswithBankofAmericaMerrillLynch.

SaraGubins (Analyst-BofAMerrillLynch):

Hi.Thanks,goodmorning.Isthereanythingthatyousawinlatefourthquarter,earlyfirstquarterthatmakesyouthinkthatyou'dbeatthehigherorlowerendoftherangesthatyou'vegiven,insomeofthesegmentdetailsattheInvestorDay?Asanexample,30%growthinmarketingeffectiveness,theguidancefornextyeariscallingfor15%to20%.Andso,Ilookatthat,andwonderifyou'reat--more




comfortableatthehigherend?Butit'sabroaderquestionacrossbothwatchandbuy?


Yes.Sojusttoremindyouonmarketingeffectiveness,wesaidinthethirdquarterthatwesawsomeworkpushoutfromthethirdquartertothefourthquarter,andyousawthatplayoutinournumbers,whichiswhywehadagrowthratenumberthatishigherthanthe--sortofthehighendoftherangesthatwegave.ButwefeelprettygoodaboutwhatwegaveatAnalystDay,andwe'reseeingthetrendinthefourthquarter,andearlyinthefirstquarterlineupverynicelywiththerangesthatwegave.Andwe'vereaffirmedtheguidanceaccordingly.

MitchBarns (CEO):

Andwherewewereinthethirdquarter,Jamere,isaround8%,somethinglikethat?


Yes,yousawmarketingeffectivenessatabout8%,andremember,marketingandeffectiveness,aportionofthatisdiscretionary,portionofthatissubscription-based,andoftentimesyoumayhavesomeworkthatleavesfromonequartertotheother.Wedidgetalittlebitofacatch-upinafourthquarter,butstillverystrongonanoverallbasis,andwefeelgoodabouttherangeof15%to20%headingintonextyear.

MitchBarns (CEO):

Andso,Sara,lookingbacktolastyear,8%inthirdquarter,alittlebitmorethan30%inthefourthquarter.Andpretty--ifyouaddthosetwotogether,prettysimilartoourgrowthofjustalittlebitmorethan20%forthefullyear.

Operator :

BillWarmingtonwithWellsFargo.

BillWarmington (Analyst-WellsFargoSecurities,LLC):

Goodmorning,everyone.Sofirst,Ijustwanttosaythankyoufortheadditionaldisclosureonthewatchsegment.MyquestionisaroundtheincreasedownershipinCatalina.Why,andwhynow?Andthenalso,doyoufeelthatyouhaveallthecomponentsnecessary,intermsoftyingtogetherthewatchdata,andthepoint-of-saledata?Andifnot,whatdoyoustillneedto[pad]?

MitchBarns (CEO):

Yes,Bill,I'llstartoff,andJamerecanadd.ImentionedinmyopeningcommentshowwecanseethisNielsenCatalinaSolutionsbusinessasbeingperfectlyalignedwithourstrategy.Solet'stakealookatwhatdotheydo?Well,theytakeinformationaboutwhatconsumersbuy,theyconnectitwithinformationaboutwhatconsumerswatch,whetherit'sontelevisionorinthedigitalworld,andthereforetheiradvertisingexposure.Andthentheyputthattogethertoprovidemeasurementandanalyticscapabilitiestoclients,tohelpclientsfirstofall,findtherightaudiencesfortheiradvertising,andthenalsotoassesstheROIonthatadvertising.

ThisisNielsen,thisisrightattheheartofourbusiness.Andso,whilewe'veenjoyedthisverypositiveandproductivepartnershipwithCatalinatoputthisbusinesstogether,thisisreallyrightatthecoreofourbusiness.Andso,that'swhywesawthisassomethingthatwereallywanttosecure,thecontrollingstakeingoingforward.

Youseeusdong--thisbusinessbytheway,focusesprimarilyonFMCGbrands,consumerpackaged




goodsinthemarketplace.Wehavesimilarcapabilitiesinourportfolioalready,withmoretocome,thatdoprettymuchthesamethinginotherverticalsoutthereinthemarketplace.Sohavingthecontrollingstakeinthisjointventure,alsoallowsustodevelopalittlebitmorescaleadvantagesaswedevelopsimilarcapabilitiestoserveotherverticals.


Listen,advertisersareaskingthequestiononROI,andforthebigbrandedadvertisers,ROIistheHolyGrail.Andyoualsosawforthemediacompanieslastyearintheupfronts,wheretheyweretakingnotonlyourratingsdata,butalsotakingourmarketingeffectivenessproductslikeNielsenBuyerInsights,andNielsenCatalinaSolutions,packagingthosetogethertoamplifythevalueoftheirinventory.

Andso,asthosemarketdynamicsplayout,weseethisasafast-growingareaofthebusiness,andwe'vesaidthatwe'regoingtocontinuetoinvestinfastergrowing,highmarginpiecesofthebusiness.Andthisisagreatinvestmentforus,andwe'relookingforwardtothegrowthprospectsgoingforward.

MitchBarns (CEO):

It'sexcitingwhatwe'redoinginthisarea,andreallywhat'shappeningindustryoverall.I'vebeenaroundlongenoughtorememberthedayswhenpeopleaskedthesequestionsabouttheROIontheiradvertisingspend,andtherewasnoanswer.Andso,thentheyjuststoppedaskingthequestion.Andherewearetodaywiththesedatasourcesavailable,thesetoolsthatenableustoputthemtogether.Thesequestionscanbeanswerednow.

Andthat'swhyyouseesuchstrongconsistentgrowthinourmarketingeffectivenessbusiness,20%ormorein2015.Mostofthatcomingbytheway,fromdevelopedmarkets,becausethecapabilitiesaredevelopingandacceleratingsorapidly.AndthereisstrongdemandfromclientsallacrossthemarketplaceforwhatNielsendoesinthisareaandforwhatothersdo.

So,look,welovewhatNielsenCatalinaSolutionsbringstoourportfolio.Welovetheopportunitynowtomakeitmoreintegratedandconnectedwithsimilarcapabilitiesthatwealreadyhave,thatserveotherverticals.

Operator :

ToddJuengerwithSanfordBernstein.

T oddJuenger (Analyst-Bernstein):

Hi,thanks.Youguysmentionedafewtimesinyourpreparedremarks,howyourbusinessmodelholdsupsowell,upanddownthroughthecycles.Iwouldloveitifyoucouldremindusgoing,lookingbackheldNielsen,thebusinessperformedthroughthepreviousrecessioncycles?Andthen,thinkingaboutthechangesinyourfootprintinthemarketplace,howmightweexpectyourbusinesstoperformthroughthenextdowncycle?Thatwouldbeveryhelpful.Thanks.

MitchBarns (CEO):

Thanks,Todd,38consecutivequartersofconstantcurrencyrevenuegrowthinourbusiness.Andifyoudrawthelineback,thatevengoesthroughthebigglobaleconomicdownturnthatoccurredfromlate2007through2009.Andit'saresultofourbusinessmodel.We'rein106countriesaroundtheworld.Weserveabroadrangeofclients.Wehaveabroadportfolioofcapabilities,manyofwhicharemust-haveinformationforclientstoruntheirbusinesswith.

Andinfact,theyneedsomeofthekindsofthingswedoevenmore,wheneconomicconditionsget




difficult.Sowewillshiftourfocustothosepartsofourportfoliothatbecomeevenmoreimportant,wheneconomicconditionsgrowmorecomplicated,ormorechallengingforourclients.Thatenablesustodeliverthissteadyconsistentperformanceinourbusinessaroundtheworld.


Yes,andifyoulookatourcorerevenuegrowth,2008to2010,ourcorerevenuegrew4.6%.Andagain,thatspeakstotheconsistencyandresiliencyoftheNielsenbusinessmodel.Andit'sallthethingsthatwe'vetoutedforanumberofyears,beinginsyndicatedbusinesses,long-termcontractsthatgothreetonineyears.Wegetgoodpricing,ourteamsaredoingafantasticjobondeliveringonproductivitythroughthecycles.Andso,ingoodcyclesandbadcycles,theattributesofthisbusinessholdupvery,verywell.

MitchBarns (CEO):

Ourfocusonproductivityisespeciallyimportanthere,becausewearealwaysstartingtheyeardevelopingourownreserveforhowtoinvestbackintoourbusiness.Wearenotwaitingforthegrowthtohappen,tocreatetheopportunitytoinvestinthefutureofourbusiness.Youalwaysstartwithproductivity.ThisisbeenarealstrengthofourCompany.AndIthinkit'soneofthereasonswhywemovethroughmorechallengingeconomicconditionsbetterthantheothercompanieswhooperateinthesamespacethatwedo.

Operator :

ManavPatnaikwithBarclays.

RyanLeonard (Analyst-BarclaysCapital):

Hi,thisisRyanfillinginforManav.Justwanttotalkon,Iknowyoudon'treportthebuyinsightbusiness,butIthinkgenerallythat'sbeenaprettygoodindicatoroffutureexpectedgrowthinthatpartofthebusiness.There'ssomeconcern,Iguess,thatemergingmarketsarestartingtoslowdown,andparticularlyChina,youguyshavecalledoutthepast.Canyoujusttouchonanythingyou'reseeinginemergingmarkets,andhowthatmorediscretionary-basedspendislookingforclients,particularlyexitingthefourthquarter,andintothebeginningoftheyear,justgivensomeofthemorechoppinesswe'reseeingoutthere?

MitchBarns (CEO):

Hey,Ryan.ThanksformentioningChina.IalwayslovetalkingaboutChina,myoldhome.(laughter)OurbusinessheldupincrediblywellinMainlandChinain2015,double-digitgrowth,evenwithwhatwashappeninginthe--well,thefinancialmarketsandthemarketoverall.

Ithinkthekeyreasonforthat,isinadditiontoourteamsstayingfocusedandexecutingwellandcontinuingtogainpenetration,likeImentionedforourteamswhatthey'vedoneinBrazil,RussiaandTurkey,Chinawasverysimilarforus.Theotherthingis,we'refocusedontheconsumer,andtheconsumermarketsandretailsalesanddigital,andothermediaconsumption,theconsumerfocusofourbusiness.AndinChinathatislargelyseparate,frankly,fromalotoftheturmoilthatyou'veseenanyfinancialmarketswhichhasdominatedthepressabouttheChinamarketrecently.

Andso,Ithinkit's--thosetwothingsgotogether,forwhywestillhadastrongyearofdouble-digitgrowthinMainlandChinain2015.





Yes,listen,I'mencouraged,becausewhatIseeisreallybroadbasedgrowth.SoifyoulookatLatinAmerica,whichisourlargestregion,itwasupdouble-digits,withoneofourlargestmarkets,Brazilbeingupinthemid-teens.China,oursecond-largestregionwasupdouble-digitsinthefourthquarter.TheMiddleEastwasupdouble-digits.Africawhichisourfastestgrowingregion,isupsingle-digits.Sowe'veseenbroad-basedgrowthacrossthemarkets.

Ithinktheotherdynamicthatreallystandsoutforme,isthatintheemergingmarketswheremulti-nationalsmakeupabout65%ofourbusiness,wereallydidseethempivottogrowththereoverthelastyearorso.Andthegrowthintheemergingmarketsformulti-nationalswasaboutonparwithwhatwe'veseeninlocals,wherelocalsatonepointweregrowingsignificantlyfasterthanthemulti-nationals.Sobroad-basedgrowth,andyou'vegothealthinreallybothsegmentsofthemarket,intermsofmulti-nationalsandlocals.

MitchBarns (CEO):

Andintoyourquestionaboutinsightsspecifically,Iprefertothinkofitasour--theanalyticsportionofourbusiness.Again,whentheeconomicconditionsgetalittlebitmoredifficultandclientsarestartingtolookfordirection,andtheanalyticsportfoliothatwehaveiswhatgivesalotofthoseanswers.Soitwillhelpthemwithpricingdecisions.Itwillhelpthembemoreefficientwiththeirassortment.Itwillhelpthemthinkdifferently,abouthowtheymarkettoconsumerstobemoreefficientwiththeirmarketingspend.

Allofthesekindsofthingstapdirectlyintoouranalyticsportfolio.Nottomention,ourleadinganalyticscapabilitiesaroundnewproductinnovation.Whichwecontinuetoinvestin,andbelieveintheimportanceof--theimportantroleitplaysinourbusinessgoingforward.

Operator :

AndreBenjaminwithGoldmanSachs.

AndreBenjamin (Analyst-GoldmanSachs):

Thanks,goodmorning.

MitchBarns (CEO):

Goodmorning,Andre.

AndreBenjamin (Analyst-GoldmanSachs):

Iknowit'searlygoing,butIwaswonderingifyoucouldprovidesomecoloronwhatsomeofthemorecriticalfeedbackhasbeensofar,withdigitalcontentratingandtotalaudience?It'sprettyeasytoimaginewhatthepositiveonesare,giventheneeds[thatyou]address?Andthen,whenshouldweexpectsome[syndication]onthoseproducts,andhowmuchofyourtotalclientbaseiscurrentlytestingthem?


Andre,wedon'tdonegatives.(laughter)

MitchBarns (CEO):

I'llbehappytogointoalittlebitmoredetailonthose,Andre,thanksforthequestion.Digitalcontentratings,Imentionedearlier,therolloutisprogressingwell.Wehaveadiverserangeofclients,networks,MVPDs,publisherssome--anumberofthemfullyoperationalalready,moreinprocess,soontobeoperational.Imentionedwehaveamajordigitalvideoplayertobeaddedinthecomingweeks.




Sowe'reexcitedaboutthat.Andalsojuststrongengagementfromtheindustrybroadly,dozensofclientsparticipatingonourclientadvisoryboard.

Withregardtosyndicationofdigitalcontentratings,wesaidonourlastcallinquarterthree,thatwe'reontrackforsyndicationinthefirstpartofthisyear,andweremainontrackforsyndicationinthefirstpartofthisyear.It'slikelytobesometimeintheearlytomiddlepartofthesecondquarter,butwe'lldothatwiththeguidancefromourclients.Andourupcomingclientadvisoryboardwillhelpusfirmup,whatistherighttimingforourclients.That'sreallywhereitstarts,alwayswhereitstartsandendswithus,istodoitattherighttime,intherightwaytobestservetheirneedsinthemarket.Sothat'sdigitalcontentratings.

Andthentotalcontentratings,digitalcontentratingsobviouslyflowsintoandplaysabigpartintotalcontentratings,alongwiththeaudiencemeasurementwehaveofalineartelevision,videoondemand,andeverythingelse.Andwe'rewellontrackforsyndicationoftotalcontentratingsaswell.Wewouldpegthatonerightaroundtheendofthesecondquarteroftheyearrightnow.

Butwealreadyhave70-plusnetworksthatarereceivingdatafromtotalcontentratings.Allofthatalongwitheverythingelsefromourtotalaudiencemeasurementsystemisalreadyinformingandsupportingourclient'sthinkinganddecision-makingastheyapproachthe2016upfronts.Sowealreadyknowthatit'sbeingusefultothemarketplace,andwe'reobviouslythrilledaboutthat.

Andso,oneotherthingontotalcontentratingsthatIthinkisjustinterestingtonote.Wedidarecentanalysisof,asamplingofshowsthatwecanseethroughtotalcontentratings.Andwhatwedidiswelookattheratingstheywouldgetoutoftotalcontentratings,andwecomparedittotheratingsyouwouldget,ifyoujustlookedatouraudiencemeasurementoflineartelevision.Inthiscase,therearenumberofpeoplewhosawthelineartelevision,eitherliveorthroughaDVRuptosevendaysaftertheliveviewing.

Socomparetotalcontentratingstolineartelevisionratings,whatweseeisthatintotalcontentratings,ratingsareatleast10%higherinmostcases,andinsomecases,asmuchas50%higher.Andso,weknowthatthesystemisworking,andit'sreallyshowingthebroaderrangeandtheliftthat'savailabletotheclientsintheindustry,astheycontemplatehowtoredefinethecurrency.Whattoincludeinthatnewdefinitionofthecurrency,whichisofcourse,thefocusofthoseongoingclientdiscussionsandmeetingsthatIreferredtoearlier.

Soit'sexcitingtoseewherethisisgoingtogointhemarketplace,andexcitingtoseetherolethatourtotalaudiencemeasurementsystemisplayinginit,inallofit.

Operator :

BrianWieserwithPivotalResearch.

BrianWieser (Analyst-PivotalResearchGroup):

Hi,it'sBrianWieserhere.Thanksfortakingthequestion.TwoIhave,first,thereseemstobeafairamountofmisinformation,evenamongtheCEOsofsomeofyourclients,aroundsomeelementsofyourdata.Andtotheextentthatthere'sbeenattackson--whatseemedtobeattacksoncredibilityofthedatainsomeways,itmakesmewonderhow--whatyou'redoingtoaddressit,thoseattacksinthepublicsphere?

Iunderstandyoucan'tnecessarilycorrectyourclientsasmuchasmaybemightbeappropriate,ormightbeneeded.ButI'mcuriousabouthowyou'rethinkingaboutthatdynamicingeneral?Separately,IsawyourrecentlyresignedHearstandMediaGeneral.Andofcourse,IthinkyousignedSinclairandTribunelastyearonthelocalside.I'mjustcurioushowthetermsofyourdealswithlocalstationgroupsareevolving,intermsoftermlength,priceescalators,productextensionsorotherwise?Thanksforany




thoughts.

MitchBarns (CEO):

Yes,thanks,Brian.Greatquestions.First,onthecommentsorcriticisms,sometimesthatwe'llhearfromourclientsinthemarketplace.Look,weunderstandthat--firstofall,whatItakeawayfromitveryinitiallyis,it'salwayspositivewhenourclientsaretalkingaboutusinthemarketplace.Becausewhatitsaysis,we'rehighlyrelevant,andthat'salwaysagoodthing.But,ofcourse,Ipreferthattheyaresayinggoodthings,asopposedtocriticisms.

Whenthey'remakingcriticismswelisten.That'salwaysthefirstthingwehavetodo.Andwehavetoaskourselves,isthatcriticismvalid?Orisitbasedonmisinformation,ormaybeincompleteinformation?Andthenwerespondaccordingly.

Andwhatwealmostalwaysdois,we,whenwehearacommentlikethisinthemarketplace,wefollowup.Andwefollow-upandwesay,look,wewouldliketounderstand,wesaworweheardwhatyousaid.We'dliketounderstandalittlebitmoreaboutwhyyousaidthat?Andthatoftengivesusacasetobringthatparticularclientuptodateonsomething.Itgivesusachancetomakeourcaseonsomething.Andinsomecases,itgivesusachancetolearn,andwegetbetterfromthat.Andso,it'salwaysproductive,whenwerespondtoitintherightway.

Andwe'vebeenveryfocusedondoingexactlythatinthepastyear,andwe'regoingtocontinuethatintheyearahead.Andwhilewedon't--neverexpectthosekindsofcommentstogoawayentirely,wedosee,andwehaveheardotherssay,thatwhenwe'remakingprogressonthatfront.Andso,wefeelgoodaboutthat,andwe'regoingtostayfocusedonit.

OnyourotherquestionaboutHearstandMediaGeneral,youalsomentionedSinclairandTribune.We'rethrilled,whetherit'saclientwhosigningacontractwithusforthefirsttime,orwhetherit'sthe50thtime,we'realwaysthrilledbythose.Andso,therenewalsherethatarehappeninginourlocaltelevisionbusiness,theyreallyarerenewals,they'rejustthat.AndthetermsreflectIthinkwhereweareinthispartofthebusiness.

Thelocaltelevisionbusinesshasbeenoverthelastseveralyears,thetrendlinehasbeenlowsingle-digitgrowth,andthecontractrenewalsreflectthat,andareconsistentwiththat.Whatyou'realsoseeingthough,withthe--forinstancetheHearstrenewalrecently,isit'snotjustfocusedonlocaltelevision,lineartelevisionaudiencemeasurement.Butalsothey'restartingtotapincreasinglyintothebroaderrangeofcapabilitieswecanbringtothem,bothfordigitalmeasurement,andalsoforanalyticsthathelpthembetterselltheiradinventorytotheiradvertiserclientsinthemarketplace.

Andso,we'reseeingtheserelationshipsbroadenabittoutilizemoreofthecapabilitieswebringtothemarketplace.That'sabigpositive.

Operator :

TimNollenwithMacquarie.

T imNollen (Analyst-MacquarieResearch):

Hi.Thankyou.Myquestionisabouttotalaudiencemeasurement,andIwonderifyoucouldhelpme--letmeknowifI'mthinkingaboutthistherightway?Backintheday,NielsenTVratingswerebasicallytheonlywayforaTVnetworktomonetizeadvertising.Nowthereareotherways.Therearecompetitorstosomedegree,TVnetworksthathavetheirownapps,cancollecttheirowndata,tousethattosellads.

Somyquestionis,Idon'tthinkanyonequestionstherelevancyofNielsentotalaudiencemeasurement,




butisitpossibletobreakdownhowtherevenuestreamsmaylookasin,willyouselltotalaudiencemeasurementasadatasource,asasubscriptionasyoualwayshaveyourratings?Andthen,isthereaseparateelementofsellingdatawithfeesintheprogrammaticbuyingexchanges?

Ijust--ifyoucouldmaybehelpusunderstand,howweshouldthinkaboutthetotalaudiencemeasurementrevenuestream?Doesthatmakesense?

MitchBarns (CEO):

Yes,itdoes.I'llshareafewthoughtsonthatandmaybeJamerewillhavesomethingtoaddFirst,withregardtocompetitorsornetworksorpublisherswhohavetheirowndata,therearetwothingsthatwebringthatarehighlydifferentiated,versusanybodyelseoutthere.Oneis,webringacomprehensiveview,especiallywhenitcomestovideo,we'reabletobringthefullrangeofplacesandwaysthatconsumersviewvideocontent.

That'sourtotalaudiencemeasurementsystem.That'swhatit'sabout.Nobodyelsehasthatcomprehensiveviewwiththelevelofqualityandgranularitythatwebringtothemarket.Sothat'sone.

Andthentheotherisindependence,whichisincrediblyimportantinthemarketplace.Forinstance,ifIamadigitalpublisherandIhavemyowndata,Icansharethatwithanadvertiser.Sothat'sgreat,intermsofhelpingthatadvertiserunderstandwhat'spossibleonmyparticularplatform.Butwhat--Ican'tputthatincontext,relativetotherestoftheoptionsavailabletothatadvertiser,andI'malsonotanindependentproviderofthatinformation.

Andso,advertisersultimatelywantthatindependence,sothatthingsarelookedatinthesameway,withobjectivity.Notonlyinthatparticularpublisher'splatform,butacrossotherplatforms.

Andtoyourpointaboutsubscriptionversusmaybemorevolume-based,asmightbemoretypicalthesedaysintheadtechworld.Andthen,there'sanotherdimensionwhichismeasurementversusanalytics.Yes,Ithinkthat'sexactlyconsistentwithourexperienceoverthepasttwoyears.Weseeawiderrangeofbusinessmodels,andexpressedinthewaywe'vecontractedwithorengagedwithourclients.

Andpartofthatisjustastateofthefragmentation,andthepaceofchangeintheindustry.Anditlikelywillconvergetobeanarrowerrangeofbusinessmodelsgoingforward,butit'shelpfulforclientstohavethatflexibilityrightnow,aseverything'schangingsofastinthemarketplace.Forinstance,ifIamgoingtosignupforafee-basedservice,thenIneedtoknowwhetherornotI'mgoingtoreallygetvalueoutofthatfee-basedserviceoverthecourseoftheyear,thattherearemaybemultipleyearsofthatcontractappliesto.

Butifit'ssomethingthat'semerginginthemarketplacerapidly,it'skindofhardtoknow,whereit'sgoingtobeayearortwoorthreeyearsdowntheroad.Andso,Imightprefertoinsteadsignupformoreofavolume-basedcontractrightnow,becauseIdon'tknowifit'sgoingtobe2timesbiggernextyearor5timeor10timesbiggernextyear.

Sovolume-basedwouldbeabetterwaytocontract,andweofferthekindofflexibilitytoourclients.AndIthinkthatservesuswell.Jamere?


Yes.Sojustacouplethings.One,today,wehavetheratingsdataonasubscriptionbasis,butweselldatasetsintoagenciesandprogrammaticnetworkstoday.Andso,thatmodelwillcontinueinthefuture.Intermsofthewaycontractswillbestructured,weanticipatehavingourlargemediaclientscontinuetodothebroadMSAswithus,butwe'realsosigningupanumberofnativedigitalclients.Andthoseareallnewclientsforusandnewopportunitiestogrowourbusiness.




SoasMitchsaid,wereprettyflexibleintermsofthebusinessmodel.Butyou'llcontinuetoseeushaveconsistent,steadylong-termcontractswithourbigclients,andwe'resigningupnewnativedigitalclients,andwe'repumpingdataintoprogrammaticnetworkstoday,largelythroughoureXelateacquisition.

Operator :

TracyYoungwithEvercore.

KateVanek(SVPofIR):

Tracy,didweloseyou?

T racyYoung (Analyst-EvercoreISI):

I'msorry.Ihadmuteon.Whenwe--Iknowyoudon'tbreakoutthebuymarginsegmentsbetweendevelopingandemergingmarkets,butshouldwethinkabouttheabilityforyou--forthemarginsinemergingtobesimilartodeveloped?Thankyou.


So,themarginsintheemergingmarketsarestillquiteabitlowerthanwhattheyareinthedevelopedworld.AndasIsaidbefore,thereasonthatwe'reseeingmarginexpansionisthatthosemarginsintheemergingmarketsareactuallyimproving.Soasyoucontinuetobuildscaleinthosemarkets,andyougetyourmarginstomoveintherightdirection.Sowestillhavesomerunwayintermsofmargininsidebuy,andit'sthereasonwehadconfidencegoingforward,thatourbuymarginswillcontinuetoexpandin2016.

Operator :

Thankyou.Therearenofurtherquestionsatthistime.Mitch,Iturnthecallbackovertoyou.

MitchBarns (CEO):

Thankyou.Well,justafewfinalwordsbeforewewrapup.Look,we'rethrilledwithhow2015unfoldedforus,banneryear,showingoursteady,consistentandresilientbusinessmodelandexecutionbyourteams.We'reallaboutmeasuringperformanceforourclientsandhelpingthemimprove.Andbydoingthatwell,wedelivervaluetoourshareholders,putsusinthatposition.

Aswelookto2016,we'regoingtostayfocusedonthesethreekeystrategicinitiatives,totalaudienceonthewatchsideofourbusiness,ourconnectedbuysystemonthebuysideofourbusiness,andthatenterprisemarketingplatform,leveragingeXelateandenablingustoconnecttowhatconsumerswatch,withwhatconsumersbuy,tohelpourclientsdelivermoreprecisionintheiradvertisingtoconsumers.

We'regoingtocontinuetoalsoremainfocusedontheopportunityourbusinesshasinthesegrowingemergingmarketsaroundtheworld.Andalsowe'llcontinuetopursuethisgrowthopportunitythatwehavewithretailersonthebuysideofourbusiness.

Look,we'rethrilledaboutwherewe'vecomefrom,andwe'reconfidentinourposition,andwe'regoingtocontinueoursteady,consistentapproachandwe'regoingtocontinuetoexecutewell.Andwe'lljustsaythankstoallofyouforjoiningthecall.Thanksforyourgreatquestions.Welookforwardtotalkingtoyouinafewmonths.

Operator :




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