Arthur C. Nielsen The world's largest marketing-research crganization had its origin in 1923 when a 26-year-old graduate electrical engineer and champion tennis player borrowed $45,000 from college friends to start a new kind of venture. Arthur C. Nielsen, born in a Chicago suburb in 1897, had achieved the highest scholastic average ever recorded a t the College of Engineering of the University of Wisconsin. At the same time he had captained the university's tennis team for three years and served as ranking officer, colonel, of Wisconsin's ROTC unit. After World War I service as an ensign on transport duty in the North Atlantic, he spent a year as engineer for a manufacturer of ref rigerating equipment, then three years in field research for the H. P. Gould Company, a publisher of business papers in Chicago. Intense, hard-driving, ereative, and competent, Arthur Nielsen was possessed of a ranging curiosity, a desire to find out the facts behind appearances, and an engineer's conviction that the facts were measurable. In the belief that he could get a t the facts, organize them, and sell them to those who could use them, ARTHUR C. he founded the A. C. Nielsen Company. For Gould, Nielsen had produced performance surveys on business and industrial equipment. These were used to help sell advertising for 100% Management, which Gould published. The A. C. Nielsen Company began to do this type of work independently. Despite the 70-hour week that Nielsen put into his endeavors, the enterprise did not thrive. I t came very close to failure early in the depression of the 1930s. Requests of a different type from
By JAMES PLAYSTED WOOD The Curtis Publishing Company
two important clients helped to reestablish the business and turned it sharply from industrial to consumer research. General Electric asked the Nielsen Company to find out why i t was not selling a timing gear in expected quantities. The du Pont Company asked f o r a study of its Duco enamel in the furniture field. Nielsen's first research contact with the marketing of consumer goods came with Bausch & Lomb as a client. E. R. Squibb & Sons was his first drug client. Bauer & Black asked for more consumer research. It was in 1933 that the Nielsen Company shifted from spot research of retail inventories in drug stores (done in response to individual requests) to the establishment of the first of the Nielsen continuing surveys. The Nielsen Drug Index was started in April, 1934, and succeeded immediately. The Nielsen Services The service was based on continuing audit of the retailer's purchase invoices, prices, stocks, and displays. The Drug Index was already well established when in the same year the A. C. Nielsen Company started its Food Index. Today the A. C. Nielsen Company uses a large sample NIELSEN of both drug and grocery outlets t o provide the Index service to its clients. A sample of thousands of drug and grocery stores is used to test advertising, product, package, and price changes, and to study the application of marketing techniques. The Nielsen food and drug divisions check on the sale of nearly 800,000 food items, about 360,000 drug products, some 23,000 pharmaceutical items. Clients can obtain information on 121 food product classifications, about 60 drug classes, and over 30 pharmaceutical lines.
Journal of Marketing, July, 1962 Long since, the Nielsen services have extended beyond food and drugs to provide comparable indexes of marketing in other lines; confectionery, tobacco, and photographic supplies. To the general public the Nielsen name is generally connected with its more widely-publicized radio and television rating services. I n 1936 Arthur Nielsen, in his own words, "created the concept of continuous, nation-wide measurement of broadcast audiences based on the use of Audimeters." I t was in this year t h a t Nielsen learned of the device, developed by two M.I.T. professors, Robert F. Elder and Louis E. Woodruff, which, when attached to a radio receiver, registered the times when the set was on and the station to which i t was tuned. About 100 Audimeters were in experimental operation around the Boston area. Nielsen obtained the device, had i t redesigned by his engineers, then pilot-tested f o r three years. I n 1942 he started the Nielsen Radio Index, based on area probability sampling through use of the Audimeter. Nielsen established his Television Index in 1950. That same year, after loud dispute in the trade press, Nielsen bought out C. E. Hooper's rating service which was based on coincidental telephone survey techniques. Besides its Audimeter measuring of exposure to broadcast programs, the Nielsen Company operates a national panel of 1,200 radio and television set owners who record f o r one week in each month programs seen, by whom, and how many of what ages and sexes. Recordimeters attached to their sets measure the time that they were turned on. The information from all these sources is then collated f o r Nielsen findings. Expansion Today the A. C. Nielsen Company conducts its marketing research operations from an International Headquarters, the Nielsen Building in Chicago. Its fact-finding services have been extended to Australia, Belgium, Canada, England, France, Ireland, the Netherlands, New Zealand, Sweden, Switzerland, West Germany and other places. The company employs 4,000 full-time workers in 1 3 countries in four continents. It utilizes all of the electronic devices that have been devised or can be adapted f o r the mammoth task of sorting, coding, tabulating, and digesting the continuous data t h a t go into its complex of finished reports to some 1,200 corporate clients. A r t h u r C. Nielsen became Chairman of the Board of the A. C. Nielsen Company when his son,
Arthur C. Nielsen, Jr., then 38, succeeded him as President in 1957. Yet the older Nielsen is as enthusiastically and as ambitiously working a t the further development of Nielsen techniques and the expansion of Nielsen services as he was in 1926. Tall and vigorous, still a formidable tennis playe r a t age 74, Arthur C. Nielsen, Sr., is unrelenting in his belief i n the need f o r accurate marketing information and in the intentness with which he pursues it. In 1946 he was traveling 100,000 miles a year selling the Nielsen idea, working 12 or more hours a day, seldom retiring before 2 a.m. To his friends and associates, Advertising Age wrote a t the time "he appears to be a tireless dynamo of inexhaustible energy." In the same year he won three national tennis titles. Twelve years later, when Printer's Ink described the man and his work in 1958, Nielsen's schedule had changed little. He was spending from 11 a.m. to 6:30 p.m. daily a t his office, working a t his home in Winnetka, Illinois, from 9 or 10 p.m. to 2 or 3 a.m. As the present article was being written, Nielsen was on his way to Japan to further the A. C. Nielsen interests there. An aggressive salesman as well as a devotee of precision measurement, Nielsen is also meticulous in planning and in the application of the marketing facts to the marketing plan. He even devised special training for his sons, putting what he describes as an unusually comprehensive educational process into effect when they where in high school. A. C. Neilsen believes in seeking and utilizing advice freely, and in setting up difficult objectives, then even more difficult goals when the first have been achieved. He believes in saving time, in eliminating o r minimizing useless or unprofitable activities. Mainly he believes in hard work. I n advice to young men he wrote in 1954, "Do much more than 'your share' of the work. The roads that lead to the heights a r e paved with midnight oil." A. C. Nielsen received the Silver Medal in the Annual Advertising Awards in 1936 "in recognition of his distinguished contributions to advertising research." He received the Paul D. Converse Award of the American Marketing Association in 1951 "in recognition of outstanding contribution to the advancement of science in marketing." In 1953 he was awarded the Distinguished Service Citation of the University of Wisconsin f o r accomplishments in the field of marketing research. In the same year he was elected to the Hall of Fame in Distribution.