Nielsen fire-fights after Bihar poll fiasco

Market research agency Nielsen has written to the News Broadcasters Association, the country's apex body that represents news and current affairs channels, indicating that it had not provided incorrect numbers on November 8 - the day the results of the Bihar election were declared.

Most news channels, barring CNN-IBN, had then announced that the Bihar election results were moving in favour of the National Democratic Alliance when, in fact, it was the grand alliance of the Janata Dal (United), Rashtriya Janata Dal and Congress that was winning.

Nielsen, according to sources, has defended itself in a letter to the News Broadcasters Association, reiterating that the information the agency gave was based on inputs provided by returning officers of the Election Commission.

The News Broadcasters Association had to intervene in this matter since Nielsen was the agency hired by it to provide data on counting day to all member channels. The body has circulated the letter to member channels and is deliberating its next course of action.

But the episode has left a bitter aftertaste for Nielsen - though not for the first time. A global agency that provides market research data to a number of companies, Nielsen had to similarly defend itself when fast-moving consumer goods firms questioned its market share numbers in the past.

The latest run-in with FMCG companies happened when Nielsen projected a revival in sales for the first nine months of the current calendar year. It had said that sales growth for the January-September period was in double digits, namely 11.8 per cent against a growth of 6.8 per cent for the corresponding period last year. FMCG leaders disputed this figure saying that their quarterly numbers had not reflected this trend.

To be sure, India's nearly Rs 3 lakh crore FMCG market has been fighting a consumer slowdown for a few quarters now. The year 2014 saw its weakest growth in a decade as consumption failed to pick up. While most FMCG companies were expecting an urban recovery this year, this has been delayed with consumers remaining nervous.

Quarterly results for the three months ended September 2015 point to this. With top line growth sluggish, the gap between sales and profit growth widened for most companies.

G Chokkalingam, founder, Equinomics Research & Advisory, explains, "What we are seeing is a deflationary market scenario triggered by lower commodity prices. While this will mean that our import bill is down, it actually doesn't augur too well from a consumption point of view." This, he says, is because if commodity prices are on the lower side for a sustained period of time, money in the hands of commodity suppliers is lower. "This impacts consumption. The result is companies don't see the kind of sales growth they should."

Like most service providers, Nielsen has been quick to plug the gaps in its research. In response to a mail, a Nielsen spokesperson said, "In case there are any concerns raised by any of our subscribers, we reach out to them directly to find out if there is any issue with the data. If required, an investigation and/or a revalidation is carried out."

In the past, Nielsen has more than doubled the size of its panel in its crucial retail audit service, which provides market share data to FMCG companies. Nielsen also works closely with advertisers and marketers as part of a client advisory council, meeting them regularly to iron out differences on market share.

For the election, the agency recently joined hands with other polling agencies to monitor and review opinion polls. This came in the wake of the November 8 debacle when polling agencies in general came in for sharp criticism for forecasting incorrect numbers during the exit polls.

The Nielsen spokesperson said the firm was part of the Market Researchers Society of India, and added that if leading pollsters came together, it would "help improve things".

"We continue to stand by our numbers," the spokesperson said. "However, you need to understand that any study will have its own inclusions and exclusions as far as its scope is concerned. As an independent entity, we are committed to unbiased reporting. The data we have and share, be it FMCG- or election-related, is collected and analysed in the most scientific way possible."