OUR CLIENTS Our Approach DMA Monitoring the Pulse of the World's Consumers We measure the consumer. It is a straightforward—but very important—statement. We don’t measure just one screen or one form of product distribution. We provide data and independent measurement of consumers everywhere they go, across the places and ways they consume. That job is becoming increasingly complicated. Consumer behavior is changing rapidly as a result of the proliferation of new devices and digital technology. Consumers now access information not only through traditional media like television, but also online via smartphones and tablets, as well as purchase goods through e-commerce channels. In fact, as of 2015, nearly 3 billion people are currently online—that’s 40% of the world’s population. And 71% of global consumers own a smart phone. Consumer choice is driving how content is viewed and goods are purchased and it is fundamentally changing the business of TV, retail, advertising and measurement. Infographic: January 2016 As a global performance management company, we provide a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement with a focus on sales and marketing effectiveness as well as providing support for new products. In 2015, we built and offered our plan for Total Audience Measurement to clients, focused first on U.S. Media. Total Audience Measurement is Nielsen’s answer to the need for holistic measurement of audiences across all media devices to keep pace with consumer behavior. Nielsen has a commitment to deliver comprehensive measurement—measuring audiences where, when and how they consume content. Ensuring that the ratings capture a holistic view of the Total Audience is our business and our mission. With category shifting disrupters such as grocery delivery services, direct-to-consumer brands and fragmentation, understanding the total consumer is not possible without including the rapidly changing e-commerce landscape. Nielsen has been helping clients understand this new frontier for years, and in 2016 announced the first details of its much anticipated e-commerce measurement solution for the U.S. market. With e-commerce measurement capabilities in eight markets globally, Nielsen’s expansion of e-commerce coverage to the U.S. brings a comprehensive, multi-data solution to the retail marketplace. This solution is a combination of Nielsen retail data cooperators, multiple consumer-sourced data sets and demand related analytics that will provide the industry a leading measure of e-commerce channel performance for both retailers and manufacturers. These data sources, married with Nielsen’s best-in-class data science, will enable an integrated, calibrated and projectable measurement solution. The complexity of this space makes it important to develop a holistic solution that addresses all channels, players and new business models. This also marks an important milestone in our mission to create a Total Consumer measurement solution that captures our clients’ large mature channels integrated with their growth channels. Day to day, Nielsen serves numerous constituencies and communities in bringing our services and insights to markets all over the world. Our relationships with all of these constituencies, and the ways we engage with each of them to serve specific needs and expectations are core to our business. Specifically for our clients, we seek to provide consistent, high quality, relevant and timely services. We do this through numerous channels such as our Client Business Partner (CBP) approach, where clients are provided a dedicated, go-to expert to quickly connect the client with various parts of the Nielsen organization to meet their business needs. Nielsen also has various methods to address data and service quality, such as issue tracking, contractual performance measurement and quality assurance teams. We participate in several committees with clients and other stakeholders where we encourage open discussion regarding products, services and industry trends. Mapping the Future As we look to the future, the landscape is even more complex. Our clients–who rely on us to provide the data and insights they need to meet consumer needs, effectively deliver their messages and spur action–face four key challenges in the evolving global marketplace. The first is population growth. World population will grow by nearly 1 billion people by the year 2025 and most of that growth will occur in the emerging markets, especially Asia and Africa. Along with population growth, these regions will continue to see increasing levels of urbanization and a rapidly growing middle class. Our response to these powerful long-term trends is to consistently invest in our measurement coverage and granularity in these growth markets. We now have a global footprint in 106 countries and the accelerating growth rate for our business in these parts of the world shows that these investments are paying off. Second is media fragmentation. As consumers continue to divide their media consumption across a wider range of devices and platforms, the result is more things for Nielsen to measure, creating more growth opportunities for our business. Our focus on the consumer will lead us to bring high-quality, currency-grade ratings to the market for all screens, devices and platforms, doing it in a way that is comparable, so they can be combined to represent the Total Audience. This is of tremendous value to the clients and markets we serve. Third is big data. Thanks in large part to growth in digital, mobile device penetration and hyper-connectivity, we will continue to see the rise of big data and new data sources. Where some might see a potential threat to Nielsen’s proven, panel-based approach to high-quality measurement, we see an opportunity. Big data won’t replace our panels. Our panels will be more valuable than ever, serving as the key to unlocking the full potential of big data. The future of measurement is not about choosing between high-quality panels and big datasets—it is about choosing both. We plan to continue to combine our panels with big datasets to get the best of both worlds: high quality, highly descriptive and highly granular information that creates new and better ways for us to measure and improve our clients’ performance. Our efforts are significantly aided by our 1,000+ data scientists and a patent portfolio that has grown more than four-fold in recent years. In fact, the Intellectual Property Owners Association (IPOA) recognized Nielsen in 2015 as ranking number 284 on its annual list of the top 300 U.S. patent recipients. The IPOA reviewed more than 7,500 companies in the process. And fourth, technology. Fueled by Moore’s Law, the relentless march of technology will continue to drive change in how consumers behave and how our clients manage and operate their businesses. Consumer data will become more digital, personal, granular and “real-time.” Algorithms and programmatic systems will play a growing role in marketing, advertising and sales. These are all positive trends for Nielsen and as they unfold, we plan to evolve in sync with our clients. Our business will steadily take on more “Data as a Service” characteristics. Our systems will become more interconnected with our clients’ systems. We will see speed, quality and productivity gains, as well as new opportunities for growth. How We Responded in 2015 These are just a few of the additional initiatives we launched in 2015 to advance Nielsen’s expertise in measuring the digital marketplace and changing consumer behavior: Our digital enablement strategy leverages technology and equips associates to help clients adapt to the “new normal” of the digital marketplace. We are transforming our technical architecture and product offerings to enable new levels of speed, flexibility, integration and openness. Nielsen added six countries to its global footprint for mobile measurement in Digital Ad Ratings, the industry-standard for independent, TV-comparable digital campaign measurement: Australia, France, Germany, Italy, the U.K. and Brazil. eXelate, a company Nielsen acquired in 2015, announced a collaboration with PushSpring, one of the world’s largest independent sources of mobile app and device data. The agreement furthers our reach in mobile-originated audiences across a variety of segments, including app installs, auto and travel intenders and mobile shoppers. With The Demand Institute in 2015, we published reports that illuminate the ways consumer demand is evolving around the world. This information helps government and business leaders align investments with where consumer demand is headed across industries, countries and markets. For more information about The Demand Institute, please visit our Appendix. Client Satisfaction Nielsen considers our clients’ feedback a gift. As such, we recognize the importance of understanding and measuring our clients’ view of satisfaction as a whole. Nielsen solicits ongoing feedback from our clients in a number of ways, including through participation on various client and industry committees as well as through client satisfaction surveys. In addition, our client service teams meet regularly with our clients to obtain their feedback on our existing products and our product roadmap. For more information about how we measure client satisfaction, please visit our Appendix. Customer Relationship Management In 2015, Nielsen launched an internal initiative to gain additional visibility into Nielsen’s global Customer Relationship Management (CRM) landscape by defining CRM system requirements and our global sales, marketing and relationship management processes. Going forward in 2016, we plan to continue the launch of our global CRM platform, beginning with our European and North America Buy commercial teams. In 2016, we also plan to expand to additional users in our North America Watch business and to integrate our global platform with our existing platform. With this CRM platform in place, we plan to fully retire the manual processes and custom-built tools currently in use in some places in order to increase transparency, client satisfaction and collaboration across our teams around the world. Our CRM Center of Excellence (COE) will continue to drive these efforts forward and handle all governance and support. We plan to launch this CRM platform in additional regions by 2020, leveraging additional marketing automation for our campaigns and client communications in order to provide real-time insights on the state of our business, with the ability to drill-down with additional data through reports and dashboards on an ongoing basis. Data Integrity Ensures Reliable, Accurate and Meaningful Data G4 15-16, G4 56-57 Data integrity is critical to both our clients and our company. Our clients rely on our data to make decisions and trust is the cornerstone of our more than 93 years of business success. Our policies and processes seek to ensure that Nielsen’s data is accurate, reliable and useful. This is an end-to-end approach—from developing the method of inquiry, to choosing a representative sample, to collecting the data and reporting accurate insights. We have established standards for quality reviews, auditing and problem resolution, both with our clients and through key industry collaborations. For our Watch data, Nielsen has an ongoing relationship with the independent Media Rating Council (MRC). The MRC is an industry-funded organization formed in 1963 by the U.S. media industry in response to a series of congressional hearings on industry best practices. It has set standards in place to ensure the reliability, validity and effectiveness of audience measurement services. The MRC is led by an independent, full-time staff, while its membership consists of leading television, radio, print and Internet companies, as well as advertisers, advertising agencies and trade associations. Nielsen is proud to have a long-standing relationship with the MRC, as this commitment to independent measurement is a key to both Nielsen’s business and to the MRC’s broad role in the industry. In line with its mission, the MRC establishes minimum standards for ratings operations, provides accreditation of rating services and audits the activities of the rating services through independent auditing firms. The main aspects of the service to which the standards (and compliance audits) apply include Sample Design and Selection, Data Collection, Processing, Reporting and Disclosures. The MRC oversees approximately 100 research product audits annually in digital, television, radio, print and out-of-home media for organizations, including Nielsen, that provide media ratings. The MRC’s annual external audits of Nielsen’s accredited rating services (as well as audits of services seeking first-time accreditation) are performed by an independent certified public accounting (CPA) firm, which has a dedicated team that exclusively audits media research services. MRC audits serve many important functions, including determining whether a rating service merits accreditation (or continued accreditation) and providing the MRC and its members, many of whom are Nielsen clients, with the results of detailed examinations. This not only provides a high degree of transparency to the industry, it also serves as the basis for quality improvements in both our services and in the overall industry. One example of this is the MRC Client Engineering committee, a group of representatives from Nielsen, the MRC and our clients who meet periodically through this cross-organizational group to share progress and dive into the technical aspects of Nielsen products and client needs. Throughout the process of introducing new products for audit, independent CPA firms regularly audit the methodology and data sources utilized. This process and the resulting feedback loop leads to improvements in the product and creates a more robust user experience for our clients. Day to day, when customer issues arise, we implement various “checks and balances” systems that allow various teams across Nielsen to cross-check our data to ensure its quality. Some of these systems include: Weekly “hot spot” reviews to monitor emerging customer concerns and to set timetables for addressing them. Root cause analyses to resolve any real or perceived discrepancies in the data with clients. Audits (conducted by both our internal teams and a third party). Our Data Science Board, a team of highly-experienced executives, which collaborates to review and respond to any concerns within 24 hours. From time to time, Nielsen enhances existing controls and implements new compliance controls. For example, in late 2014 and into 2015, Nielsen introduced new techniques to detect outliers, illogical panelist behaviors and relationships between panelists and media personnel. These help to ensure that the quality of data received from all participants in Nielsen panels (TV homes, audio meter wearers, etc.) is accurate and unbiased. Ensuring Information Security at Nielsen G4 15-16 Nielsen is committed to protecting the security of all employee, client and consumer information. Our Information Security program is grounded in internationally recognized data protection principles and we use a variety of security technologies and procedures to protect client and consumer information. The Information Security team at Nielsen is dedicated to information protection for Nielsen globally. This team reports through the Chief Information Officer who reports directly to the Chief Technology Officer. This team is also supported by a group of globally dispersed information security professionals, all of whom are industry-certified. The strategy for the delivery of information security services revolves around the following four key areas: Policy & Governance, Awareness, Risk Management and Incident Management. Policy and Governance: Nielsen uses a principle based approach to deliver specific control areas within the Nielsen Information Security Policy. This policy defines the minimum set of controls that are necessary to uphold the company’s reputation and protect our information. The policy is based on several authoritative sources including industry-standard frameworks and regulatory requirements, including the EU Privacy Acts, HIPAA, COBIT 5 and federal data protection regulations in multiple countries. Controls within the policy are tiered to ensure that appropriate protection is provided for each classification of information. The Nielsen Information Security Policy serves as the foundation for the Nielsen IT Controls Audit Framework, which is managed by Nielsen’s Corporate Audit Staff. Awareness: Information security awareness starts with the Nielsen Code of Conduct, which sets expectations for employees to protect confidential information, defines examples of confidential information and stresses the prevention of unauthorized disclosure. The Code of Conduct links directly to the Nielsen Information Security Policy. Employees are required to certify to the Code of Conduct within a month of starting employment and then every other year of employment. Commencing in 2015, Nielsen Information Security implemented an online Information Security and Privacy training module, which will be required training for all employees and has been translated into 20 languages. Additionally, Nielsen Information Security manages user awareness with a campaign approach that is a continual process throughout each year. Topics include: Guiding principles of information security Confidentiality and integrity responsibilities Data handling based on classification Theft prevention (physical, facility, laptop, clean desk policy, printing, shredding, etc.) Unauthorized access: user ID protection and password requirements Appropriate and inappropriate use of technology (storage of data, use of VPN, software installations and licensing, use of portable media, inappropriate use, etc.) Disposal of information Copyright protection Recognizing and reporting a security incident Employees who handle or have access to specific types of information within the organization are also provided with tailored communications or training. Risk Management: Nielsen Information Security utilizes the ISACA (formerly called the Information Systems Audit and Control Association) risk management framework with a focus on identifying information security risks throughout business streams, educating the business owners of the risks and providing consultation on mitigation options. Risk assessments are completed in a matrix approach that covers: Selected controls across a specific service, product or business process; Individual controls at a global level; and Individual or selected controls across specific regions or technologies. Contracts: In coordination with Legal, Nielsen Information Security regularly reviews and provides recommended information security language for client and third-party contracts to include: 1) specific security control requirements where applicable; 2) specialized reporting and response procedures in the event of an incident; 3) self-certification procedures; and 4) right-to-audit definitions. Suppliers who operate the largest co-shared data centers on Nielsen’s behalf are required to adhere to ISO27001 standards, covering physical controls, environmental safeguards and the security of supporting information technology (IT) services and telecommunications connectivity. New Product Introduction: Nielsen Information Security is integrated with the New Product Introduction (NPI) process. NPI is a multi-phase process that defines Nielsen’s global product development framework. During this process, Nielsen Information Security is engaged at various tollgates to identify risks based on the progress of the project. Where there is a requirement for mitigation, Nielsen Information Security provides consultation to the project teams and business owners. Cyber Threat Detection: Nielsen Information Security has developed a Vulnerability Assessment and Penetration Testing program that includes: Vulnerability assessments of key systems based on a risk-based prioritization. These assessments follow a perpetual schedule until the retirement of the system. Annual penetration tests completed on key platforms based on a risk-based prioritization with immediate remediation of critical and high-priority items. Acquisitions: Nielsen Information Security engages with acquired companies and the acquisition integration teams to ensure that the integration of their technologies and processes adhere to the Nielsen Information Security Policy (NISP). In the case of joint venture (JV) partners, we work with the JV to develop an internal information security program based on our model and utilizing our policies, practices and procedures wherever possible. Incident Management: Nielsen Information Security has developed a robust security incident management process to respond to information security incidents, as well as corporate Code of Conduct violations, globally. This process includes triage, investigation, evidence collection and storage, root cause analysis and incident resolution with executive reporting. Security investigations cover a broad range of allegations. Whenever such allegations are suspected, Nielsen Information Security fully investigates claims in conjunction with Legal, Human Resources and/or local business leaders. Appropriate actions are taken if the allegations are validated. In addition, Nielsen maintains an executive Cybersecurity Incident Response plan that details the response framework, executive decision-making roles, prioritization and escalation of defined events, supporting procedures and response management. In the event of a potential privacy breach, Nielsen Information Security will assess the incident and provide the assessment to Nielsen Legal, who will determine whether the breach requires notification to the affected party or parties, and any other required notifications. If notification is appropriate or required, the Nielsen executive team will determine the level of additional services which may be appropriate. Privacy by Design Helps Ensure Responsible Stewardship Nielsen considers privacy and data protection as critical issues for the measurement and ad tech industries and has established a cross-functional global privacy organization headed by a Chief Privacy Officer. This includes a dedicated legal team and privacy representatives embedded in various parts of the business. Our approach to privacy centers on minimizing the amount of personal data that we collect and using non-identifiable data tied to a device rather than an individual wherever possible. We follow an approach of “privacy by design” to ensure that our privacy principles—which align with globally-accepted fair information practices—are embedded in the design of our products and services during their development stage. Training is mandatory for all employees to support privacy best practices globally. We maintain extensive privacy notices on our website describing the various types of data collection and use in which Nielsen engages, and we provide the public with instructions for how to opt-out of our measurement products. Our subsidiary eXelate maintains a cutting-edge preference manager on its website, which enables individuals to see—and customize—in real-time the information that eXelate cookies associate with their devices. Further, eXelate is a member of the Digital Advertising Alliance and the Network Advertising Initiative, and adheres to the privacy codes of conduct of both organizations (applicable to online advertising enablement, which the rest of Nielsen does not perform). Our global privacy and data use policy is supported by an implementation guide tailored to various business units, as well as by advanced training for specific regions and job roles. Our international data transfers are based on internal data transfer agreements that, where relevant, include so-called EU “Model Contracts.” We are actively readying the company for compliance with the new EU General Data Protection Regulation and will be compliant prior to the effective date in 2018. We are tracking developing legislation in the U.S., Brazil, Turkey and elsewhere as well. Nielsen seeks to be a leader in the industry by promoting responsible stewardship and good practices across the ecosystem. We are active, participating members of the Center for Democracy and Technology, the Centre for Information Policy Leadership, the Future of Privacy Forum, the Interactive Advertising Bureau and the Information Technology Industry Council. We also work with the U.S. Chamber of Commerce and industry groups in Europe such as ESOMAR, FEDMA and the Business Software Alliance. Further, we maintain a membership in the International Association of Privacy Professionals, and regularly provide thought leadership in the form of speakers and articles for their conferences and publications. To foster greater transparency about our data collection and use practices for the general public, Nielsen has partnered with the Council of Better Business Bureaus (BBB) to develop a consumer education website known as “Digital IQ” where newly online populations can learn more about how the Internet works and how to safely navigate the online experience. We are actively working to promote the Digital IQ site, and we will continue to support future releases by donating our focus group services to perform a qualitative website usability analysis for the BBB. We not only comply with existing laws, but continue to move our privacy program forward toward a higher state of maturity and institutionalization. Measuring Social Impact and Outcomes for our Clients G4-16 Given the direct and indirect impact that Nielsen data and insights have on thousands of businesses and billions of consumers, we recognize the importance of our core business as our foremost social responsibility. We seek to identify shared value opportunities with our clients who work to improve the lives of consumers around the world. Nielsen’s global Public Development and Sustainability (PD&S) organization and our Nielsen Consumer Insights team, among others, connect our clients with products across Nielsen to help them drive their social impact through measurement and insights for faster and smarter decision-making. These commercial clients range from corporate social responsibility and sustainability departments to governments, foundations and nonprofit organizations. Helping our clients maximize the return on their brands and allocate their social investments more efficiently and effectively enables them to develop sustainable solutions that help care for their markets, communities and consumers for the long-term. Here are some examples: Health care For a global pharmaceutical company, Nielsen’s Consumer Insights team conducted a multinational study to understand the challenges that women with advanced breast cancer face. Among the 1,273 women aged 21 years or older in 12 countries who have been diagnosed with metastatic breast cancer, we found that 63% of women said they “often feel like no one understands what they are going through.” The results were then shared in educational forums and in the media, enhancing awareness of breast cancer patients’ experiences. The University of Texas Medical Branch – Galveston works with Nielsen to monitor and identify health problems among aging Mexican Americans. Funded by the National Institute on Aging, the study has been ongoing since 1993 and is the largest epidemiologic study of the health of aging Mexican American people. Longitudinal face-to-face surveys are conducted in five southwestern states (Texas, New Mexico, Colorado, Arizona and California). In 2016, the research will be extended to caregivers for greater insight into healthcare conditions and needs. Poverty For a government client, Nielsen conducted a census of key textile trade workers in rural areas—specifically hand-loomers, a group of citizens living below the poverty level without access to government programs and benefits. The census we conducted helped identify not only who these weavers were and where these weavers were, but also their needs. The outcome of our work provided over 2.5 million family members with an official identity for the first time, giving them access to health and welfare benefits never before available. In Delhi, India, 50% of the population lives in slums, with a huge number of unemployed youth. Nielsen—in association with a large private sector company in India— undertook a project to improve the livelihoods of unemployed youth in one selected slum in Delhi. We conducted a baseline survey and study to identify vocational options for the youth, as well as associated training. As a result, all of the selected youth group from the Delhi slum were trained and employed across local retail and restaurant chains. 8 million European youth (18–25) are unemployed. Collaborating with a large global manufacturer, Nielsen worked to improve employee recruitment potential and establish employment opportunities with over 200 companies. With this initiative, we developed a Readiness-for-Work toolkit, which is being implemented in a variety of organizations to support scholastic curriculum vitae (CV) clinics and interview coaching. We also conducted two surveys that assessed the opinions of young Europeans on unemployment in Europe and evaluated employers’ view of internship programs. As a result, we were able to better understand the needs of unemployed European youth and employers, in order to better bridge the skillset gap and helped to decrease unemployment in Spain and Portugal by employing youth as interns. Photo: Michael Cummo/Hearst Connecticut Media for Stamford Advocate In addition to pro bono work through Nielsen Cares, Feeding America works with Harris Poll, acquired by Nielsen in 2014, to survey self-reported charitable givers across the country. The study seeks to understand how these individuals perceive the domestic hunger issue, as well as their feelings about the Feeding America Nationwide Network of Food Banks, particularly in comparison to other organizations in the human services sector. This ongoing study has helped the nonprofit to identify differentiating strengths in its brand equity and improve its communications effectiveness. Access to Education With an increasing demand for secondary and senior secondary education (a complete high school education), Nielsen partnered with a large global non-governmental organization to explore the possible expansion of the public-private partnership (PPP) model in rural areas of India. Our team reached out to nearly 1,400 private schools and insights showed that 55% of urban schools were willing to set up schools in rural areas to provide access to secondary education. Under the PPP model, the Indian government established approximately 2,500 schools by the end of 2015 with each school accommodating 600 students. As a result, 1.5 million children in rural areas have access to secondary education. New America is a U.S.-based non-partisan think tank that focuses on a broad range of policy issues, including national security, gender equality, the economy and education. The Harris Poll conducted an online survey for New America to examine the factors students consider when searching for the right college. The results showed how financial perceptions and limitations impacted college choices. For a Social Change Impact Report, Walden University commissioned the Harris Poll to survey more than 9,000 adults in Brazil, Canada, China, Germany, India, Jordan, Mexico and the U.S. to compose a detailed picture of the state of social change engagement around the world. Topics covered were beliefs about social change, issues change agents care about, motivations behind their engagement and actions they are taking to further social change, as well as the tools they use.