Why would Kantar sell off its media division (and Barb with it)?

Why would Kantar sell off its media division (and Barb with it)?
Béhar (right) interview with The Media Leader at 2023 ASI Television & Video Conference

In a quirk of fate, The Media Leader and Barb, the UK’s broadcaster-backed TV measurement company, moved into the same London office building last year.

Those familiar with this publication’s address in St Martin’s Lane, around the corner from Trafalgar Square, may also know it as former premises for TV researchers RSMB, next to Carlton Television (now ITV).

But Barb’s change of scene could be even more significant this year, with reports that Kantar Media, the company that manages the Barb measurement system, is set to be put up for sale by its private-equity owner, Bain Capital.

A sale has been predicted by industry insiders for some time and was, it is thought, telegraphed by Kantar’s decision in 2022 to move the Kantar Media division, an audience measurement business that operates in 60 countries, to a separate profit-and-loss statement.

As Kantar Media became operationally independent last year, the company, chaired by former ITV CEO Adam Crozier, hired Sky’s former chief business officer Patrick Béhar to take charge.

If true, recent reports of a sale would suggest Béhar, who took charge in September, had been either brought in to sell the business or the decision was made during his short tenure so far.

New CEO: appointed to sell?

A sale has been on the cards for some time, according to a former Kantar executive who spoke to The Media Leader on condition of anonymity.

“Patrick has been brought in to sell the business,” the source insists.

Béhar, a former management consultant at McKinsey & Company, is known as a tough operator while running Sky’s ad sales division, Sky Media.

In an interview in November, The Media Leader asked Béhar about whether he had conversations internally with Crozier about sell-offs.

Béhar kept his cards close to his chest. “It’s a good question,” he replied.

“As you know, Kantar Media is separating from what I call ‘big Kantar’, which is insights and all the rest. So we have our own board. We’re operating independently. So that’s the one thing.

“Now in terms of our destiny, and my destiny, I can tell you what I told Adam Crozier, which is: ‘I came here to write a big chapter of my professional life, not a few pages.’”

Fast forward to last week and investment bankers have clearly been put on alert about a potential auction, which usually leads to a story by Sky News. An auction will happen “later this year”, the broadcaster reported, quoting estimates that the business could be worth as much as £1bn.

The overall Kantar business was valued by Bain at £3.2bn when it acquired a 60% stake from WPP in 2019.

Kantar Media would not comment on this story and referred The Media Leader to information that has already been disclosed in the public domain.

In Kantar’s 2022 annual report, for example, it lists the media division as being worth $536m in gross revenue (up 6% year on year). Kantar Media operates three separate business models: audience measurement (including the TechEdge software); advertising intelligence; and Target Group Index (TGI, which carries out consumer profiling and targeting).

“This change gives the leadership team the flexibility and authority to build the strongest possible media business as part of the Kantar Group, setting its own investment and innovation priorities, without the need to compete for capital against other parts of the Kantar portfolio,” the company said at the time.

Why now?

What could make Kantar Media an especially attractive asset to sell now is the prospect of creating a service to rival Nielsen, which has in effect operated as a monopoly in the US for decades but has faced pressure to adapt as audiences migrate online.

The Media Leader understands that Kantar Media is the preferred supplier to create a measurement panel for the Association of National Advertisers, which wants a US cross-measurement system similar in ambition to the UK’s Project Origin by Isba.

Béhar would not be drawn on specifics when asked about Kantar Media’s ambition in the US and for delivering a rival to Nielsen in its home market, but he did suggest that meetings in the US had taken place very early in his tenure as CEO.

Chasing the ‘holy grail’: Kantar Media CEO Patrick Béhar interview

“It’s not a secret that I went to the US a couple of times to meet some old friends that I know from NBCU and from other broadcasters that were my partners. I think you’re facing a very similar situation that you’re facing in other markets, which is everyone wants to do some things and move the ball forward in terms of cross-media.

“The question is: how you do it? Who do you do it with? And how do you orchestrate all that? I think there’s a lot of goodwill and willingness to take things forward. I don’t think the puzzle has quite fitted yet.”

Kantar previously owned a North American division called Vivix, which was previously part of ‘big Kantar’ but was spun off a year ago into an independently-operating division last year, at the same time as separating Kantar Media.

It was then announced in November that Vivix would be sold to MediaRadar, adding weight to the theory that Kantar Media is next.

Overall Kantar ownership also in doubt

The future of the wider Kantar business was also thrown into further speculation last week when reports surfaced that WPP is considering selling its remaining minority stake in the business.

Media industry analyst Ian Whittaker said it would be logical for WPP to wait until any Kantar Media deal is completed before selling its stake. He also noted that the tone of the reports suggests it does not sound like the structure of a sale has been reached yet.

Whichever company ends up owning Kantar, and whether or not that includes its media division, Whittaker pointed to YouGov, now led by former Meta executive Steve Hatch, as an emerging rival that it should seek to emulate.

“My view has always been that the transformation of YouGov from a market research company into a data-led business, with accelerated organic revenue growth and a sharp share price rise, should be a template for how Kantar could use the data it holds to transform itself,“ Whittaker wrote on LinkedIn. “That may be easier under a less split share structure.”

Kantar Media’s current contract with Barb, renewed in 2021, runs until 2029 and the company conducts broadcast audience measurement in 62 countries, including France, Spain, Norway and parts of Latin America. Its technology is used in an additional 24 countries, making it a globally significant player in the production of TV ratings data used by advertisers.

Media Jobs