Summary

The Nielsen Company announced last month the latest release of its software platform designed for the consumer packaged goods (CPG) industry. The new release, Nielsen Answers 5.0, allows users to combine various analytical tools to gain insights and apply best practice methodologies to improve sales and marketing results. The new capabilities are based on integrated combinations of market measurement and analysis services from the other Nielsen businesses. New features, especially the dashboard, raise the level of this offering to rival IRI – and in some ways surpass – traditional businesses intelligence (BI) tools. Ventana Research believes that the advantages of Nielsen Answers, such as its integrated customer and consumer analytics, outweigh its cross-functional limitations and deserve a close look by CPG companies.

Assessment

Nielsen Answers can combine syndicated data, point-of-sale (POS) data, customer planning, consumer demographics, retail store characteristics and shipment profiles to yield insights into the forces driving market trends. Marketing and product professionals can use this intelligence to create roadmaps showing the impact of changes in marketing and sales programs. These insights and roadmaps can help companies effectively to answer three basic questions: What happened? Why did it happen? How should we address it? The new capabilities of Nielsen Answers 5.0 are built from market measurement and analysis services deployed by the other Nielsen businesses, including ACNielsen, Nielsen Homescan and Spectra, Nielsen Media Research, Nielsen Customized Research, TDLinx and Decisions Made Easy. Nielsen Answers also can incorporate client-specific and third-party enterprise information (such as data from SAP ERP systems) using advanced data integration and warehousing technologies. Answers 5.0 is offered as on-demand software as a service (SaaS) or as a customized on-premises application and service.

Its new features include a dashboard that delivers diagnostic information and operational analytics. The dashboards it produces allow drilling down and points of entry into Nielsen’s databases and third-party applications and are fully customizable by users. The drill-down feature not only does context carrying – that is, it remembers the intersections of data you want (such as brand, product, store and time) – but also offers application reach-through, which is the ability to get data from, and sometimes view, other applications inside the dashboard without leaving the current window. These dashboards also allow monitoring of performance against corporate objectives. What differentiates them from many other dashboards is their use of BI logic and information, which the Nielsen Answers dashboards can deliver in the form of plain-language text or graphic images. The plain-language text combines data from many queries and assembles the results into meaningful insights and suggested next steps, providing considerable detailed guidance for users. New also to release 5.0 are analytic models and simulation tools. Nielsen has OEMed a sophisticated forecasting and demand planning tool that calculates the impact of various combinations of trade promotion activities, including discounts, displays, feature support and bill-backs. What makes this unique is Nielsen’s ability to combine this with its own syndicated data – something that other demand planning vendors only talk about.

Market Impact

Pulling together its existing software and services and making them seamlessly accessible in one platform, Nielsen hopes this new release will push Answers 5.0 ahead of its main competitor, IRI’s CPGNPlus and PlusSuite and limited market efforts with its OEM partner Symphony-Metreo, which is not being fully leveraged by IRI software efforts. The improvements reflect Nielsen’s determination to offer an enterprise-class BI tool that is industry-specific. This product is in many ways competitive with those from the dedicated BI vendors, including Business Objects, Cognos and Oracle. MicroStrategy and SAP remain key vendors to watch in this space with critical pricing analytics and robust dashboards.

Nielsen’s market challenge is less about the capabilities of Answers or the combination of product and service than about a lack of marketing to educate the market on what it can do and to counter perceptions that traditional BI platforms offer a complete cross-functional solution, which would negate the necessity to have a specialized BI solution for product and marketing managers. Still, by offering prebuilt integration, role-based analytics and SaaS, Nielsen challenges the notion that one size fits all. And BI vendors do not have the domain expertise that Nielsen has, which is critical for advancing analytics into operational processes.

Recommendation

Consumer goods manufacturers looking to analyze their information often find themselves having to comb through disparate data sources to extract meaningful insights. Nielsen Answers 5.0 provides a single workbench for customer and consumer analytics rather than a series of in-house built applications that attempt to combine syndicated data, POS data and profiles of customers, consumers, retail stores and shipments without proper understanding of what analytics are needed to improve performance. Ventana Research recommends that CPG companies that currently use Nielsen services look at this new offering to determine where they can increase workforce savings and actionable insights.

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