Nielsen Holdings N.V. Management Discusses Q1 2013 Results - Earnings Call Transcript

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 |  About: Nielsen Holdings N.V. (NLSN)
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Nielsen Holdings N.V. (NYSE:NLSN)

Q1 2013 Earnings Call

April 25, 2013 8:30 am ET

Executives

Liz Zale - Senior Vice President of Investor Relations

David L. Calhoun - Chief Executive Officer and Executive Director

Brian J. West - Chief Financial Officer

Analysts

Sara Gubins - BofA Merrill Lynch, Research Division

Andrew C. Steinerman - JP Morgan Chase & Co, Research Division

Matthew Chesler - Deutsche Bank AG, Research Division

Suzanne E. Stein - Morgan Stanley, Research Division

David Bank - RBC Capital Markets, LLC, Research Division

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Tim Nollen - Macquarie Research

William G. Bird - Lazard Capital Markets LLC, Research Division

Douglas M. Arthur - Evercore Partners Inc., Research Division

Brian W. Wieser - Pivotal Research Group LLC

Daniel Salmon - BMO Capital Markets U.S.

Operator

Good morning, everyone, and welcome to the Nielsen Holdings N.V. First Quarter Earnings Conference Call. [Operator Instructions] Please also note that today's event is being recorded. I would now like to turn the conference call over to Ms. Liz Zale, Senior Vice President of Investor Relations. Please go ahead.

Liz Zale

Thank you. Good morning, everyone, and thank you for joining us to discuss Nielsen's first quarter 2013 financial performance. Joining me on today's call from Nielsen is David Calhoun, Chief Executive Officer; and Brian West, Chief Financial Officer.

Before we begin our prepared remarks, I'd like to remind all of you that the following discussion contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include comments about Nielsen’s outlook, expectations and prospects. These and other statements that relate to future financial results and events are based on Nielsen’s view as of today, April 25, 2013. Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. The risks and uncertainties that we believe are material are outlined in Nielsen’s 2012 Form 10-K and other filings and materials, which you can find on nielsen.com/investors or at the sec.gov website. We encourage you to consult these documents for a more complete understanding of these risks and uncertainties. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by securities law. A slide presentation that we'll use on this call is available under the Events section of our Investor Relations website at nielsen.com/investors. We use certain non-GAAP measures to evaluate the results of our operations. We believe these non-GAAP measures provide useful information to investors regarding financial and business trends when viewed in conjunction with our GAAP results of operations. Further definition and a reconciliation of these non-GAAP measures to our results under GAAP is available at the end of our press release. It is also in the Appendix of the webcast slide presentation we're using on today's call and on our IR website.

For today's call, Dave will start with comments on our results for the quarter and will provide a business update, then Brian will discuss financials for the quarter and will provide updates on our full year guidance, and then we'll be happy to take your questions. With that, I will turn it over to our CEO, David Calhoun.

David L. Calhoun

Thank you, Liz, and good morning. We had a very solid first quarter as we entered the year.

Our revenue was up 4% on a constant currency basis, 3% on a reported basis. We had very strong growth in recurring revenue, which is the long term, more subscription-oriented business that we enjoy.

Still pressure on our Insight business. As you look around the world, we see a slow growth environment, but a stable environment, with one exception and that's Europe, which enters its third year of basically moving sideways. But all in all, a solid, solid quarter.

Adjusted EBITDA grew 5% on a reported basis and 6% on a constant currency basis. We had a very healthy margin expansion embedded in that. And adjusted net income grew 26% on a reported basis and 29% on a constant currency basis.

There has been no change in our outlooks and our investments in growth opportunities, so we remain fully invested and, with our natural margin expansion, we have the ability to continue on that course.

We had very strong free cash flow in the first quarter, $70 million better than a year ago, and that supports the capital policy adjustment we made as we entered the year. And so we feel very good about continuing along those lines.

Arbitron shareholders approved a transaction roughly a month ago, and a regulatory process with respect to Arbitron is ongoing. We're responding to the second request. I've had very constructive and favorable feedback from the radio market, so I feel good about how that process continues. And then finally, we will reaffirm our 2013 guidance.

The next, Page 6, is just a few of the significant growth opportunities that we have. We talk frequently about our program reach and read, which is to continue to build coverage across all of Africa, rural China, rural India. That program continues and we continue to capture more and more consumers in that process.

We are doing a very good job of activating our Buy data. We have a couple of products we don't talk frequently about, Global Track being one, which is the ability to, in essence, track market shares all around the world for some of our big multi-nationals, and we recently signed another big client to that product.

We have a Total Store Read. When we acquired the Perishables Group, we now have ability to really measure all of what a store is capturing by way of market share and many of our clients, including Safeway, have done a terrific job with that. And then finally, Nielsen Catalina, which is a long-term investment that we made, which marries some of our Watch and Buy data, is off to a really good start here as we enter the year.

We continue to build on a business that we refer to as Ad Solutions, which is, in effect, the marriage of Watch and Buy data, and it measures brand effect for television and now with the Vizu acquisition, online and digital. And we have a new product, Nielsen Buyer Insights, which is the marriage of credit card data with all of our Watch data. At any rate, this package of products and the Ad Solutions approach to the marketplace has done exceedingly well and continues to grow at a healthy double-digit pace.

We've increased the reach of the OCR and XCR platforms, again, to bridge the digital world. We've had great success on this front. We continue to sign up more campaigns. We now have more than 200 advertisers and agencies, and we recently signed up the Omnicom Media Group, and so we feel very good. International expansion includes Australia, Canada, Germany and Italy, so we continue to stay on a very good course with respect to OCR.

Social television ratings is a product, as you know, we created a relationship with Twitter that will be introduced here as we enter the fourth quarter of the year. Importantly, the SocialGuide product that we acquired, again, and uses the Twitter feed, is off to a really good start. And we've got a lot of interest across all the media companies and ad agencies. And at least based on the first couple of months, I feel real good about the prospect of that product and the interest.

And then finally, we continue to capture more audiences across more devices. That course is always our objective. First, to measure; second, to roll them into our commercial ratings, and that's a process we'll stay on forever. But we continue to make great progress.

So with that, I'll turn it over to Brian. He'll fire through the financials, and then we'll get to Q&A. Thank you.

Brian J. West

Thanks, David. Good morning. First quarter revenue was $1.37 billion, up 4% constant currency, as Dave mentioned.

Adjusted EBITDA was $349 million. That's up 6% constant currency, and margins expanded 42 basis points to 25.4%.

We did see the impact of foreign exchange in the quarter. FX rates were a drag of 90 basis points on revenue and around 100-basis-point drag on EBITDA.

Adjusted net income was $145 million, up 29%, a strong result driven by, first, our continued deleveraging; second, the refinancing of our term loan and the associated benefit from lower interest costs; and three, our ongoing long-term favorable tax attributes. All that rolled into, as I said, a nice earnings growth quarter.

Adjusted income per share came in at $0.38. And finally, our free cash flow was a usage of $60 million. And as Dave pointed out, that's an improvement of $69 million versus the same time last year, reflective of the underlying business performance.

So I move on to Page 9, segment revenue. First quarter was yet another quarter of consecutive top line growth. Total Buy revenue was $825 million. That's up 5% constant currency. Information services was $648 million, up 7%, and that's driven by growth in both North America and the developing markets, reflective of where we invest. The smaller part of Buy Insights was $177 million. It's down 4% year-over-year, which is a better sequential growth trend versus the fourth quarter of last year. And developing markets was up 6%. On one hand, the global multi-national clients are still cautious. But on the other hand, we saw a continued strength from local and regional clients.

Total Watch revenue was $494 million. It's up a nice 4%. Another consistent performance from TV measurement, and a double-digit growth, as Dave mentioned, from our Ad Solutions business.

A side note, we made a small adjustment related to one of our legacy online businesses to discontinued operations. There's a page of the Appendix to help you update your models.

Moving on to Expositions. Revenue was $57 million. That's a decrease of 7%. It's all due to trade show timing between quarters. You'll see this flip around in 2Q when we expect to see the Expo segment grow double digits. So core revenue, if you take out Expositions, was up 4.5% constant currency. As Dave mentioned, a nice one for us. Very steady.

Page 10, profitability. First quarter adjusted EBITDA was $349 million, up 6% constant currency and, again, 42 basis points of expansion. Buy EBITDA was $124 million, up 5% as we continue to fund growth investments. Watch EBITDA came in at $199 million, up 7%, with very nice continued margin expansion, reflective of the scalability of the business model. Expositions EBITDA was $32 million, down 11%, again, all due to show timing and we expect strong double-digit EBITDA growth in Expositions in the second quarter. Overall, we're delivering on our cost management, productivity efforts, while funding the growth investments and expanding margins.

Turning to Page 11. We do see the impact of fluctuations of foreign exchange rates because -- in our reported results, that is, as almost half of our revenues were outside the U.S. The bar graph depicts both historical and projected foreign exchange impact on our revenue. In 1Q, you see the drag of 90 bps. And if all rates stay the same, constant, for the remainder of the year, second quarter revenue will have a small drag of around 10 basis points on revenue, and then the full year will see a drag of 40 basis points, both on revenue and on EBITDA. I remind everybody, this is just a trends translation effect as we report. We always talk about constant currency, which reflects the underlying operating performance of the business.

Moving on to Page 12. Upper left, free cash flow in the quarter, usage $60 million. As I mentioned, almost $70 million better than last year, driven by the operating performance and lower interest costs. CapEx came in at $70 million. Cash taxes $29 million, that low rate driven by the long-term attributes that we enjoy. And restructuring came in at $21 million.

On the balance sheet, bottom left of the chart, net debt came in at just over $6 billion, and the net debt ratio was 3.76x.

On the cap table on the right, we refinanced $3 billion in the quarter and lowered our rate by around 56 basis points. And it really took our -- it's the driver that took our weighted average interest rate to just under 4.5%. And as you can see from the table, we still have high -- higher coupon notes in the cap structure that we view as an opportunity going forward.

Moving on to Page 13, 2013 guidance. As Dave mentioned, we're reaffirming guidance. Revenue growth at 4.0% to 5.0% constant currency growth. Adjusted margin expansion in the 40 to 60 basis point range. The adjusted net income growth versus the last February earnings call has been updated to plus 15% to 19% constant currency, which just reflects the benefit of the refinancing and the lower interest expense.

Our reported adjusted income per share is at $2.13 to $2.19. We'll leave that where it's at and reaffirm there. And everything else, we haven't changed, other than a very slight tweak to the share count number.

So with that, I will turn it over to Liz, and we can start Q&A. Thank you.

Liz Zale

Operator, go ahead. We'll take our first question.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Sara Gubins from Bank of America Merrill Lynch.

Sara Gubins - BofA Merrill Lynch, Research Division

Could you give us some more details on what you're seeing in Europe, particular markets and how that might vary between Information and Insights?

Brian J. West

Yes, Sarah. Europe has been and continues to be a pretty big drag on our company. As you know, for almost 3 straight years, it's basically been going sideways. The reason it goes sideways is because the Information business holds up very well, which it has. And the Insight business, which declined significantly in the first 18 months, it gets smaller and smaller. I don't see that changing. The only thing that probably gives us some concern as we look for the rest of the year is just the extent to which it influences Eastern Europe, which we always have viewed as a developing market. So to be honest with you, I do think the Europe situation doesn't get any better. I think we're going to have to sort of stay in the status quo, as the way -- as how we think about it for at least another year or 2, and then get on with business in the other markets around the world. But it's been a tough situation and I think it's going to stay a tough situation as far as I can see.

Sara Gubins - BofA Merrill Lynch, Research Division

Okay. And then second, in the Insights business, it does seem like the revenue declines may have bottomed. So first, I want to just check and see if you think that that's fair. And then second, where are you seeing the improvement or easing of pressure? And are there any signs that your global clients might be thinking about ramping their spend later in the year?

Brian J. West

Sarah, there's no doubt we saw bottom as we exited 2012, where the back half of that year was in the down 8%, 9% range. And we saw that getting better as we turned the corner in 2013. I'd also remind you, as you probably know, there is a comp phenomenon here. So the first quarter of last year was the highest single quarter for Insights growth in probably 2 years. It grew 7%. So I'm up against that a little bit. But from our view is, if everything stays basically the way it is in that part of our business as you go through 2013, it's got to get better because comps get better, and it'll start to grow just because of the math. So our -- what we're seeing out there relative to some of the client behavior is that the developing markets look like they're getting a little bit more investment on a relative basis, and that feels pretty good. And then client-by-client, it can be different. But the global clients still, there's no doubt, are feeling pretty cautious in general.

David L. Calhoun

Yes. I -- to even get more specific question about the end of that question, I don't see any breakout opportunities to the upside, just by way of attitude, with all the multi-nationals. If we're going to continue to feel really good growth with the local clients and all the developing markets, I think that's going to be a -- continue to be great. But I don't see any big upside sort of popping with the multi-nationals.

Operator

Our next question comes from Andrew Steinerman from JPMorgan.

Andrew C. Steinerman - JP Morgan Chase & Co, Research Division

I want to ask about the all outlets combined database, so the so-called Walmart database when we think about the full year guidance of 4% to 5% constant currency. As we go into the second half of the year, is there going to be a comps challenge year-over-year because -- as we anniversary the AOC data? And then the second part of the question is, is the AOC data driving any additional Buy Insights business kind of more specific, not a cyclical rebound, but Buy Insights benefiting from the value of AOC data and desire to do more analytics around it?

David L. Calhoun

So there's going to be mix shifts that occur over the course of the year that, I think, we're pretty comfortable with how they're all going to play out, which allows us to feel good and reaffirm the guidance that we've given you for the year. Yes, there is a -- there is definitely an adjustment that occurs with respect to the inclusion of Walmart for the 12 months up through about the end of the second quarter. But we -- what's going on in the Insights business and the comps that sort of play out over the course of the year sort of more than offset that. So -- and we've got another factor, which is sort of some share shift gains that we have had over the course of the year. We don't report individual wins and losses, but we can account for them pretty clearly when they come and how they come. And so I feel real good about reaffirming that guidance. And yes, you're going to see some shifts in the mix of our business due to the Walmart phenomena. We are, no doubt, seeing more analytics based on Walmart and the Total Store Read stuff that we have. There's no doubt about that. But some of that offsets other Insight work that we do. And as I've said on this call many times and probably frustrate everyone, we don't know exactly what that offset is, so we're trying to just account for the aggregate Insight business and order rates. We feel good about where they are today. We don't need a big upside to happen in Insights for us to have favorable comps as we run through the rest of the year, and that's really the basis for our guidance. Brian, do you want to add anything to that?

Operator

Our next question comes from Matt Chesler from Deutsche Bank.

Matthew Chesler - Deutsche Bank AG, Research Division

On the Watch division, there's been a mismatch or, let's say, an outperformance within the segment, where your TV revs are outperforming the overall segment. And it looks like there's also pretty good performance from your Ad Solutions business. So maybe if you can comment on the part of the business there that's weighing it down. It sounds like you did get rid of some of your legacy online business. And is there a point later in the year where the segment starts to look more like what the TV business is currently doing?

Brian J. West

Yes. It may hit exactly. You still have -- while we took care of one relatively small -- actually, a very small part of the legacy online portfolio in the disc ops, there's still online legacy stuff that's running off, and we've been pretty clear about that we were just going to manage that down, and you'll see that. And to your point, I think, as you start to get later in the year, you'll start to see our digital business, our Ad Solutions business, our TV business, they will all start to move generally in a more consistent direction. But we're still at the tail end of running off some of this old legacy online stuff.

Matthew Chesler - Deutsche Bank AG, Research Division

Can you be a little bit more specific? What is the online piece that is running off and why? And also, can you comment a little bit on any initiatives you're making within local? I think I read out there that you're expanding your hybrid local measurement. What can we expect going forward?

Brian J. West

Well, remember part of that legacy online was old, real planning tools that really were antiquated and probably were relevant 10 years ago to how you measure the Web that really aren't today. And those are still hanging around, albeit much smaller. And that's the stuff that you'll start to -- you continue to wind down. You want to fulfill some responsibility to clients, but then, you're going to get out of it. And that's the piece that I'm talking about. The local side feels very good in our view, particularly around how we launch local hybrid.

David L. Calhoun

Now you'll recall that OCR was designed to displace the planning tool that previously was used as the audience reach measurement tool. OCR becomes the reach measurement tool, and it really obsoleted that planning tool for us. And we have been basically allowing that to sort of drift down. It's not a big number anymore. And as I said -- as Brian said, I think by the time we get to the second half of this year, it becomes pretty much de minimis.

Matthew Chesler - Deutsche Bank AG, Research Division

Is there a point at which you can slow down investment in there and shut down some legacy systems and, actually, besides the revenue loss get some profitability benefit from it?

David L. Calhoun

Yes, but I wouldn't overstate that one. The truth is, I mean, with respect to just the online piece, we have much bigger benefits to harvest in closing down old legacy systems in a bigger, broader, Buy side of our business. So the answer to your question is yes, that's an ongoing productivity opportunity for us. It's part of why our margins continue to expand. I wouldn't attribute that all to just that online legacy piece. That's not going to be the biggest part of that.

Operator

Our next question comes from Suzi Stein from Morgan Stanley.

Suzanne E. Stein - Morgan Stanley, Research Division

Can you just give us a little more detail on the regulatory process with Arbitron? Just remind us where you are. And can you address any specific issues that the FTC is focused on? And any sense of when this would potentially close?

David L. Calhoun

Yes, all I can do, Suzi, I'll tell you where we are. I'm not going to try to speculate outcomes because it's a regulator and that's not smart on my part. We are literally trying to complete the second request, which is the documentation that is required inside the company. We have to organize it. We have to sort of prepare summaries and then we have to hand it over. So we are really at the tail end of that process, almost ready to give it all to them. They will then go through their reviews and questions. And so we're not -- I don't want to speculate as to exactly where we zero in. I would suggest that, as I said early on, the request itself doesn't surprise us, doesn't concern us. We're just going to do our best, respond. There's nothing about the documentation that we've organized and prepared that scares us. So we're just going to move down this way, but I can't really speculate for you what outcomes are going to be. I'm going to guess it's somewhere between 60 days and 4 months it will take for them to just go through it and give us a response. So anyway, I'd like to be more specific, but I can't. They are a regulator.

David Bank - RBC Capital Markets, LLC, Research Division

And how are you thinking about the acquisition pipeline now? Is this sidelining you waiting for Arbitron?

David L. Calhoun

No, no, no. We look at them all day long, we continue to look at them all day long. We have a pretty rich pipeline. We'll continue down that path. As I've said many times, our appetite is usually built around smaller tuck-in acquisitions that complement our product portfolio, like the ones we've been doing, Vizu, SocialGuide, Perishables, that kind of stuff. It's a rich and it's a deep pipeline, and we'll continue to add things.

Operator

Our next question comes from Eric Boyer from Wells Fargo.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

I just want to make sure the assumptions around the Arbitron increasing are still the same.

Brian J. West

Yes, no change. As what we've talked about in December, I think that's $0.13 EPS in the first 12 months and then 19% in the following 12 months.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Okay, great. And then you had mentioned the credit Insights acquisition. On the merger, are you seeing more competition from companies that capture retail purchase data from credit and debit data?

David L. Calhoun

No. Again, this wasn't an acquisition. This was a data deal. So we got what we think is worth the best source of credit card data. We married it with our Watch data, and we're out in the marketplace with it. And it's a very, very good product. The truth is, we don't see a lot of competition on that front, mostly because the difficulty is they don't have the Watch data to marry it to. So for us, that's a relatively easy thing to do. I also believe we have the single biggest source of credit card data built into our product. So I feel good about that, and I don't see a significant competition today, and I don't see one likely in the next 12 to 24 months.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Okay, great. And then we haven't talked about Answers in quite a long time. I'm just wondering what the status is there.

David L. Calhoun

Yes, we're very happy with Answers. As you know, the big-launch clients, 2 manufacturers, Proctor and Kraft, and the big retailer, Safeway, with their loyalty program. So all 3 are performing really, really well. All 3 are adding the functionality. Our job now is to convert a couple every year, and we'll do that.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Are we at the point where we could see some cost savings from that platform, the migration off of the legacy platforms in 2014?

David L. Calhoun

Yes, you'll see that. I mean, that's part of our -- definitely part of our long-term productivity opportunity. First, build the platform, make sure it's robust, make sure it can handle the global marketplace and then steadily, steadily convert our clients. And that is what we will do.

Operator

Our next question comes from Tim Nollen from Macquarie.

Tim Nollen - Macquarie Research

Could you please give a comment -- another comment on the OCR and XCR business which seems to have a lot of potential? You did refer to some great success and a lot of advertisers and agencies signed up. What more can you tell us, please, about where the business stands now and what the growth opportunity may be?

David L. Calhoun

Well, we're as bullish as we've ever been. We are not yet a standard in the industry. I think we are becoming one in the video advertising space, which is the rich part of the space, and the space that, in our view, was the most important one to capture. So I feel very good about that. We're winning most of what we see, not all of what we see. And our job is to eventually turn this into a standard. So I don't know what to tell you other than we're adding more advertisers, we're adding more agencies. I think the inclusion of the Omnicom Media Group is another important sign because it's going to be the agencies in the end who, as they make these conversions and learn how to make money themselves from this product, that's what's really going to accelerate its use. And so again, very steady progress. We're not going to call out the numbers until we really get to significant critical mass and we can begin to talk about it as a standard. But we feel good about it. And that's pretty much all I can tell you at this stage.

Operator

Our next question comes from William Bird from Lazard.

William G. Bird - Lazard Capital Markets LLC, Research Division

How would you characterize developing markets' conditions and potential for improvement? And then secondly, I was just wondering if you could drill down a little bit more on how you see the commercial opportunity from both Twitter ratings and Nielsen Buyer Insights.

David L. Calhoun

I feel better about the developing markets than I did a year ago. There is some stability. I think they all are planning on slightly slower growth objectives as economies, and that's actually a healthy thing. We are going to be the beneficiary. We already are with the conversion to a consumer economy in China. So as I think everyone knows, looking at just the GDP numbers is not -- it's not something that really influences us. There is the significant economic objective to move to a more consumer-oriented economy in China. That's a good thing. We get a lot of support from the government to help them with policy development and building consumer confidence, so that feels right. I think we're going to have a really good run in India. We've had some terrific wins. They're in the order book, and I feel good about how they're going to play out over the course of the year. Latin America, probably the toughest of the developing world, but not bad. I mean, it's going to be, I think, a good middle-single digit kind of game for us. So I feel good about all of it. Eastern Europe probably isn't going to feel as robust as it has historically for us simply because the effects of Europe are creeping into it. And I think Russia's the one other country that's difficult. But all in all, better than I did a year ago, for sure. The Twitter product, I will tell you, again, it's small today. I'm way excited about it because I'm getting calls from everybody. The folks running the business for me are just pleading for more salespeople. So I -- all the signals are really good. That's the SocialGuide product, which delivers audience information to advertisers, mostly for their own sell side activities. When we get to real ratings that sit alongside our program ratings as we approach the fall, that's when the business really starts to play bigger. And that's -- that moment is going to come, and I feel good about the prospects for it. So we'll call out numbers when they become meaningful enough to influence all of our financials. But right now, all I can tell you is it feels really, really good about the early momentum.

Liz Zale

[indiscernible]

Brian J. West

NBI.

David L. Calhoun

Oh, I'm sorry. NBI. Same thing. We've had a great uptake. It covers more than the CPG world. When we go out to the CPG world, we need sort of product levels, SKU level kinds of data to really -- to help. This is retail establishment level data that you get from credit cards. It doesn't boil all the way down to SKU data. So it really -- for the travel and leisure industries and the industries that are most interested in attracting consumers to their particular retail outlet, that is where this one plays big. And so we're beginning to enter new markets that we didn't enter before. It's actually very exciting. So anyway, I -- again, off to a good, early, fast start. Part of our advertising solutions' success, and we're almost at critical mass there, where we can start really talking about it. But anyway, it's growing quickly.

Operator

Our next question comes from Doug Arthur from Evercore.

Douglas M. Arthur - Evercore Partners Inc., Research Division

Dave, you -- the Nielsen Catalina partnership has been around for a bit, but you seem to have particularly clawed out this quarter. Is anything, I mean, dramatically changing there? You mentioned as part of your -- an overall solution offering [indiscernible] amplify.

David L. Calhoun

We have a product we refer to as Brand Dashboard [ph], which, in effect, allows for brand managers who are looking for very specific consumers and very specific consumer behavioral attributes, to, in effect, dial in specific programs that they should be advertising on. So it just is a -- it's a much more precise way of placing advertising in the end. That is what the product's being used for. That was the original design of this joint venture, but believe it or not, we've literally just gotten to the launch. So, again, it feels good. It's part of a nice portfolio, and it's growing very quickly. So yes, you're right, the rubber's finally hit the road on that one.

Operator

Our next question comes from Brian Wieser from Pivotal Research.

Brian W. Wieser - Pivotal Research Group LLC

One thing I was noticing from your K recently, actually, was that if you look at the top 5 Watch clients, which I guess are the broadcast networks, primarily, you've got -- you have about 15% year-over-year growth. But everyone else, by inference, was basically flat. I was wondering if you could characterize any diverging trends between the different Watch clients. I assume that the rest is sort of the agencies and smaller networks. A second question around...

David L. Calhoun

Hey, can I just address that quickly? Because I think maybe you ought to just take that offline and talk directly to Liz. I don't recognize that data at all.

Liz Zale

Yes. I wouldn't agree with that characterization at all.

David L. Calhoun

So I don't want anybody to get the wrong impression on us.

Liz Zale

Business grows across the breadth of the business.

Brian W. Wieser - Pivotal Research Group LLC

Okay. So separately, on Online Campaign Ratings, it sounds like certainly a lot of traction among agencies. But when we -- we heard that Google, for example, has not adopted or embraced it. I'm curious to, maybe just speaking more generally, among those publishers which have not signed up, do you get a sense that it's mostly just a commercial discussion versus a strategic one? In other words, there may be some players who want to create a competing currency or just won't sign up under any terms? Or is it just a question of eventually coming to commercial terms? Curious for any thoughts you have on that.

David L. Calhoun

Well, with Google, as you mentioned, which is the one that matters the most, I think, for the broad marketplace, it's purely a strategic question for them. So they have, as you know, announced better part of a year ago, their own product to, in effect, measure their sites. And I don't -- our view is that the market will always need and require an objective measurement to satisfy itself in the placement of advertising. And the advertisers who we started with as we designed this product have pretty much proved that point as they've gone down the path with us and with independent measurement. So -- but Google is going to have to wrestle with that decision. And listen, they are -- they have a one guy who's big enough -- who's got a big enough reach to draw their own conclusions. We believe it's in their best interest and the market's best interest to have the objective measure, and we think they'll be one of the biggest beneficiaries of that measure. But listen, he's saying it. They have to commit themselves to that. I'm hopeful that someday that'll happen.

Douglas M. Arthur - Evercore Partners Inc., Research Division

We've definitely heard they left money on the table by not having it.

David L. Calhoun

Well, this happens. This happens. There are always folks who -- they have a reach in data who want to measure themselves. And I get it, and I understand it. They've got great insights to it. But the independent measurement thing is a very important thing for the -- ultimately to get the maximum realization of that market. I think and believe that someday, they'll come to that conclusion.

Operator

And our final question for this morning comes from Dan Salmon from BMO Capital Markets.

Daniel Salmon - BMO Capital Markets U.S.

Just -- you mentioned the Twitter business is still small. But the other day, we saw an announcement from that company and Publicis about a tighter integration between the 2. I expect we may see more of those coming. Should we view these type of announcements as sort of second derivative positives for your work with Twitter as those companies tighten up with the agencies a bit more?

David L. Calhoun

I think that's the perfect description, to be honest with you. Yes. They're very complementary. What's happening is you're going to see a real shift in measurement from purely measuring paid advertising reach to paid and earned. Earned, really, is the Twitter and Facebook feed, right? That's what that is. And because you don't pay for the reach, but you get it as a result of either good programming or good content or just a great message. So that is what we're all leaning into. Our measurement facilitates that currency, if you will, and then everything else just becomes sort of a big ad for the agencies to go out and help their clients sell better, get their messages clear, learn how to leverage the earned component of reach. That is really -- I think your characterization as a second derivative is a perfect description.

Operator

And ladies and gentlemen, at this time, I would like to turn the conference call back over to Ms. Zale for any closing remarks.

Liz Zale

Thank you. I just wanted to say we'll be announcing our participation in some May conferences shortly and we look forward to interacting with all of you at those conferences and other meetings. Also related to the recent SEC guidance around use of digital and other social media, investors should be aware that we use multiple channels for information disclosure, including our website, nielsen.com/investors, Twitter and also our iPad app. You can follow Nielsen IR on Twitter, and don't forget to download the Nielsen IR iPad app from the App Store. Thanks, everyone.

David L. Calhoun

Thank you, everyone.

Brian J. West

Thanks.

Operator

Ladies and gentlemen, today's conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your telephone lines.

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