Kantar Sales Process Indicative of Industry Dynamics

Kantar Business Units to be Split and Sold by Bain and WPP

Move is Emblematic of Current Market Research Industry and Capital Markets

March 2025: Kantar has been the subject of M&A discussions for many years, typically as an acquirer, but for the past two years, Kantar itself has been the M&A topic. In 2019, WPP sold 60% of Kantar to Bain Capital, with a medium-term objective to publicly list or otherwise sell Kantar. That medium term is now the present, and the breakup of Kantar is well underway.  The company has already divested Kantar Health (to Cerner and subsequently Oracle), Kantar Public (to PE) and Vivvix (strategic/PE).  

In 2023, Bain began to explore the idea of divesting Kantar Media, a television ratings/media measurement business. Earlier this year, after a challenging process, Bain agreed to sell Kantar Media to HIG Capital at an estimated $1 billion potential valuation, which is rumored to be below their initial target price.  Around the same time, Bain announced that it would be spinning off a combined Numerator and Kantar WorldPanel as a separate company with an intent to either publicly list or sell the newly formed spin out. That left only Kantar Insights, although there were indications that Bain intended to float Kantar Insights via an IPO or a direct listing in the UK.

But in early March 2025, Bain disclosed that all plans for an IPO or public listing of either Numerator Kantar WorldPanel or Kantar Insights would be scrapped and that a sale of each unit would be individually pursued.

All of this generates questions such as to why were these units broken up after more than 30 years of common operations and why is a public listing no longer on the table? Kantar is not alone in facing challenges with capital market receptivity. NIQ (Nielsen IQ) and Circana, also backed by their respective private equity owners, are attempting to IPO later this year, though it is unclear if they will be successful. At the same time, publicly traded insights companies such as YouGov, Cint and IPSOS have been under pressure and for different reasons seen significant share price declines. In the private markets, while some funding is still occurring (Rep Data recently announced a minority investment for example), capital has largely paused from this sector leaving many private, and subscale companies struggling to understand what comes next.

What does this mean for the overall research and insights industry and what can companies do to ensure they differentiate themselves from the pack? While the industry is facing market pressures that will likely persist for some time, we believe that winners can and will emerge and significant value will accrue to those that come out on top.

Why is the sector under pressure?
We have identified common themes that we believe account for the broad sector struggles, including low growth rates and diminished investor interest in the sector.

●  Oversupply: This is a twofold challenge. On the commercial side, too many suppliers providing similar products are driving down prices, especially for CPG clients. Additionally, with too many companies and fragmentation - both public and private - investors are turning elsewhere. Everyone is competing for a decreasing amount of investor capital.

●  Limited innovation: When was the last transformational change to impact the industry? While innovating outside of start-ups might be challenging, the industry is suffering from a lack of new breakthroughs. According to one industry expert, “this is an industry that feels like it has been doing the same thing for the last 20 years.” Complicating matters is that legacy offerings are suffering from fraud and bots while the rest of the data industry innovates faster than survey-based data research companies.

●  Business model fatigue: While the research industry covers a wide range of pricing models, including syndicated data and some DaaS/SaaS, the preponderance of project driven revenue among insights companies seems antiquated relative to other pricing models outside of research. Always On SaaS models have gained some traction, but more is needed.

●  Organizational and product complexity: Prior to Bain, Kantar was a diversified insights company with businesses in media measurement, behavioral data and insights/consulting. Now each of these distinctive units will go their own ways. The promise of integrating disparate businesses has proven challenging (this dates back to the old Nielsen Watch-Buy strategy). In addition, these sectors have varied growth rates, valuation multiples and distinct challenges and opportunities, making it difficult for investors to cleanly value the entire entity.

●  Threat of AI: As generative AI becomes more omnipresent and available at low cost; the value of consumer surveys is questioned. Synthetic data, created by AI trained on decades of respondent data or synthetic respondents acting like real respondents, are threats to the traditional business models of survey-based research. Kantar and the insights industry generally has not only underinvested in AI, but some companies are also still defending legacy solutions while AI penetrates every other data industry.

●  Lack of growth investment: Private equity owners of insights businesses are primarily focused on generating cash to reduce leverage required to pay for what are now seen as high valuations. These investors are reluctant to invest in growth initiatives that, however compelling, are unlikely to pay off during their holding periods. The investments required and time horizon to ROI may be too long for most current investors in the insights industry.

What can be done to emerge successful?

It is challenging innovating within a large, established company. Similarly, scaling a new and innovative company takes time, resources and adaptability. And while it is always easy to make suggestions from the sidelines, from what we are seeing, these are the steps companies should take to claim leadership.

●  Consolidation: Consolidation needs to occur, based on valuations at realistic market prices. There are significant overlapping operations in areas such as panel and go-to-market that can be captured and reinvested in growth areas.

●  AI Automation and new business models: Insights industry leaders including Kantar are sitting on decades of longitudinal consumer behavior data. They operate high-moat, scaled global respondent panels. The data and insights held by Kantar and its peers is enormously valuable. They must adopt AI strategies that leverage this advantage to generate cost savings (smaller panels supplemented by AI) and create new always-on AI research products that can be sold based on software subscription models vs. project-based data collection and advisory.

●  Invest in differentiated first party data: Even with the growth of synthetic data, there is value in owning hard-to-capture first party data. Whether capturing niche demographic groups or behavioral activities that are less commoditized, first-party data supports scalable data products with higher revenue growth and margins and greater retention and upsell opportunities.

●  New ownership base: For both public and private markets, there needs to be a refresh in the investor base, with new participants willing to balance short term cash generation with longer term growth investment around owning research technologies that leverage AI, new business models and smart consolidation strategies.

Based on these conditions, companies should be prepared to be private or independent for longer.

At Stage18, we work with companies across the data, research and analytics sectors. If you would like to discuss any of the items in this article, feel free to reach out to [email protected] .

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