A Biography of Arthur Nielsen, the Market Research Pioneer

Collage of Arthur Nielsen on a cellphone.

The Life Story of Arthur Nielsen Sr.

Suppose you are in business or have studied marketing.

In that case, you probably have heard of the term “market share,” meaning the percentage or portion of a market controlled by one company or organization.

Arthur C. Nielsen Sr. was the marketing genius who developed this concept into what we appreciate it to be today.

Arthur Nielsen Sr. was one of the pioneers advocating for market research in the business field.

His main marketing philosophy was that one could analyze and systematize movements and changes in the market and use this information to improve his products or business. Nielsen Sr. also developed other innovations in the marketing and retail industry, one being the Nielsen Rating.

Early Life and Education

Arthur Charles Nielsen Sr. was born in Chicago, Illinois, on September 5th, 1897. His father, Rasmus Nielsen, was a Danish immigrant who worked as an accountant, while his mother, Harriet, was a teacher.

Both of Nielsen Sr.’s parents had a good mathematical background, which enabled young Nielsen to foster an interest in mathematics.

Arthur Nielsen Sr. studied electrical engineering at the University of Wisconsin, graduating summa cum laude in 1918. He served as the captain of the tennis varsity team from 1916 to 1918, remaining true to the sport for more than 50 years.

Career Beginnings

Upon graduation, Nielsen Sr. returned to his hometown, Chicago, and worked as an electrical engineer in several companies. He aspired to go into business but was anxious and afraid of starting.

In 1923, he took a chance on himself, borrowed $45,000 from his fraternity brothers, and founded the AC Nielsen Company.

Arthur Nielsen aimed to develop a system to track the number of people listening to the radio.

Nielsen Company and Breakthroughs

Arthur Nielsen Sr. faced many challenges in the initial days of running his company, almost declaring bankruptcy twice.

He eventually found his footing by targeting the sales and market dynamics of the retail and drugs industry.

In 1930, the company’s sales reached $200,000 per year, but the Great Depression severely impacted the United States economy and put Nielsen in danger of going bankrupt.

He diversified his research services and established the Nielsen Food and Drug Index.

The Nielsen Food and Drug Index service involved auditing selected sample stores to record the retail flow of grocery and drug brands, enabling manufacturers to compare their product sales with those of their competitors.

Nielsen Sr. took his market research expertise to the retail and drug industry.

“Employ every economy consistent with thoroughness, accuracy and reliability.” – Arthur Nielsen

In the early 1940s, AC Nielsen Co. started providing ratings for radio programs. Later, the rating service became favored among the masses for measuring the popularity of television shows.

Nielsen’s rating system, dubbed The Nielsen Rating, worked by sampling over 1,000 television homes using an audiometer.

The device, a box, would get attached to the set, during which it would record when the television was on and the channel tuned in.

The data collected would be sent and analyzed at a data collection center to help television programs and producers know their total audience for each show.

According to the Nielsen Rating Index, a rating of 20 means that 20% of households in the United States are tuned in to a television program. Each percentage denotes a share (or market share).

A 20% share means that 20% of the population in the United States watches the studied program.

Although the Nielsen Rating system took longer to gain popularity than competitors, who conducted mainly phone and door-to-door interviews, it gradually became more widely accepted.

Nielsen had installed nearly 1,500 audiometers within the United States by 1950.

“Be influenced by nothing but your clients’ interests. Tell them the truth.” – Arthur Nielsen

The AC Nielsen Company (now called The Nielsen Company) became a leader in the ratings and market research sector.

Arthur Nielsen’s company was also one of the first to adopt technology in the 1950s by purchasing and using the first electronic computer.

In the 1950s, Nielsen modified his audiometer and applied it to television ratings.

He stopped assessing radio ratings in 1964. Nielsen Sr. worked alongside his son, Arthur Nielsen Jr., to improve their company’s consumer analysis until the former’s retirement in 1957.

His son took over as CEO, leaving Nielsen Sr. to focus his free time on philanthropic activities.

Arthur Nielsen Sr. passed away in 1980, leaving his company’s ownership to his son and the nuclear family. Four years after his death, his family sold the Nielsen Company to Dun and Bradstreet for $1.3 billion.

Nielsen Sr.’s rating service is now a pioneer and leader in the television ratings service.

Legacy and Impact

Arthur Nielsen Sr.’s influence on marketing shaped the industry in many ways. First, he introduced the concept of market share, which measures a company’s percentage of total sales within a particular market.

This idea revolutionized how companies approached market research and allowed them to understand their position within their respective industries.

“Leave no stone unturned to help your clients realize maximum profits from their investment.”- Arthur Nielsen

Nielsen Sr. also pioneered audience measurement services for media like television and radio.

His company’s methods for collecting and analyzing audience data became industry standards, and his innovations like the “people meter” helped to modernize audience measurement methods.

Nielsen Sr.’s company also recognized the importance of data-driven decision-making in marketing and advertising, and its methods were designed to provide businesses with accurate and actionable data.

Arthur Nielsen’s contributions to the marketing industry helped to establish the importance of market research and audience measurement in driving business success.

His company’s methods and innovations remain relevant today. They continue to provide valuable insights to businesses globally.

Personal and Professional Accomplishments and Awards

Since he was passionate about tennis, Nielsen Sr. utilized his financial resources and business expertise to improve the sport. He had previously served as the varsity tennis team captain in 1918.

After school, he participated in the United States National Tournament and remained an avid player for most of his life.

“Accept business only at a price permitting thoroughness. Then do a thorough job, regardless of cost to us.” – Arthur Nielsen

Nielsen Sr. even teamed up with his son to win the U.S. father-and-son doubles titles in 1946 and 1948.

He was enshrined in the Tennis Hall of Fame and recognized for his philanthropy and passion for developing the sport.

As for other awards:

  • In 1939, Arthur Nielsen got elected president of the National Association of Market Developers, a professional organization for market researchers.
  • In 1956, the Advertising Research Foundation awarded Arthur Nielsen Sr. the Gold Medal Award for his Distinguished Achievements in advertising research.
  • In 1961, Arthur Nielsen was awarded the Distinguished Citizen Award by the Chicago Boy Scouts Council.
  • In 1974, Arthur Nielsen was inducted into the Advertising Hall of Fame for his contributions to the advertising industry.
  • In 1985, Arthur Nielsen was posthumously awarded the Silver Medal Award by the Market Research Council for his pioneering work in market research.

Family Life and Relationships

Arthur Nielsen, Sr. was married to his wife Gertrude for 63 years, with whom he had two sons, Arthur Jr. and Philip, and three daughters, Margaret, Barbara, and Virginia.

He was very close with his son, Arthur Jr., and aside from running his company together, they participated in and won tennis championships together.

He was also very passionate about tennis and played until his 70s.

Philanthropic Activities and Charitable Contributions

Arthur Nielsen Sr.’s philanthropic and charitable contributions reflected his commitment to supporting education, healthcare, and the arts.

Arthur Nielsen Sr. was a proponent of healthcare organizations and research initiatives.

He donated $5 million to the University of Wisconsin-Madison to establish a research center to study multiple health-related topics.

“Keep the problems of clients and prospects confidential. Divulge information only with their consent.” – Arthur Nielsen

Arthur C. Nielsen was also a strong supporter of education. He established the Arthur C. Nielsen Jr. Education Foundation to support educational organizations and institutions.

The foundation has provided grants for teaching and learning initiatives in several education fields, including science, math, and the arts.

Nielsen Sr. was an arts patron, supporting several cultural institutions in the Chicago area. He was on the board of directors for the Chicago Symphony Orchestra. He provided funding for many cultural events and performances.

As a part of his legacy in the tennis world, Nielsen and his wife founded the Nielsen Tennis Stadium at the University of Wisconsin, a facility ranked as one of the finest in the country.

The Death of Arthur Nielsen, Sr.

Arthur Charles Nielsen Sr. died in Chicago, Illinois, on June 1st, 1980, at 92. He had suffered from Parkinson’s disease.

Closing Thoughts

Arthur Nielsen Sr. lived a remarkable life filled with entrepreneurship, philanthropy, and a deep commitment to market research.

He revolutionized the advertising and market research sector by creating the AC Nielsen Company.

Nielsen Sr. was a pioneering figure in the market research industry and will be remembered for his contributions to market research and the sport of tennis.

Timeline.Arthur Nielsen Timeline

1897:

Arthur Charles Nielsen Sr. is born in Chicago, Illinois.

1918:

Nielsen graduates from the University of Wisconsin-Madison with a degree in electrical engineering.

1923:

Nielsen Sr. establishes the AC Nielsen Company and focuses on conducting performance surveys of industrial equipment and providing manufacturers with evaluation reports.

1930s:

AC Nielsen turns to other research services due to the Great Depression. Nielsen Sr. creates the Nielsen Food and Drug Index, a research service that records the retail flow of grocery and drug brands from carefully selected samples of stores.

1940s:

The AC Nielsen Company expands its services to include measurement of radio audiences, pioneering the use of audiometers by installing them in homes and offering the Nielsen Radio Index to radio stations and advertisers to estimate their audience size and demographics.

1950s:

The AC Nielsen Company grows its measurement services to include television audiences, using people meters to track viewing habits in selected households.

1957:

Arthur Nielsen, Sr. retires as CEO. His son, Arthur Nielsen Jr., takes over.

1980:

Arthur Nielsen dies in Chicago, Illinois, at 82.

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Frequently Asked Questions

1. How much is Nielsen worth?

As of 2023, the Nielsen Company has a market capitalization of approximately $10 billion.

2. What is Nielsen known for?

Nielsen Company is known for its market research and audience measurement services, which provide insights into media consumption and consumer behavior.

The company learns what consumers appreciate through data and analytics and offers this intelligence to their clients in the TV, radio, and newspaper markets to drive informed action.

3. What does Nielsen do with your information?

Nielsen collects data on consumer behavior and media consumption across online, mobile, and emerging technologies through software and products to provide digital measurement services.

It then uses the collected data to measure and analyze how consumers engage with media and offer insights to its clients.

Nielsen does not sell personal information to third parties for marketing purposes. Rather, it protects individuals’ privacy by sharing it in aggregated or anonymized forms.

4. How does Nielsen collect data?

The Nielsen Company uses electronic meters, a computer, and a modem installed into the TV sets of a representative sample, which then deliver results to the company every night.

However, with the changing technological landscape, it has opted for methods such as online surveys, social media monitoring, and collection from other sources like third-party providers, in addition to its older methods that use tracking devices and retail measurement.

5. Do Nielsen Families still exist?

Yes, Nielsen still uses households to participate in its audience measurement programs.

While the company has expanded its measurement capabilities to include other forms of media, such as digital and mobile, the use of households is still an essential part of its audience measurement methodology.

6. Do Nielsen Families get paid?

Yes, households participating in Nielsen’s audience measurement programs get compensated for their participation.

7. Is Nielsen a Canadian company?

No, it is not. While Nielsen does have operations in Canada, including a Canadian headquarters in Markham, Ontario, it is not a Canadian company.

The Nielsen Company is a multinational corporation headquartered in New York, United States.

8. How accurate are Nielsen’s ratings?

Nielsen’s ratings are one of the most reliable and accurate ways to measure media audiences.

However, like any research methodology, there is always a margin of error and limitations that can affect the accuracy of the results.

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