New ways to analyse web advertising

The internet’s growth as an entertainment medium is bringing with it a dilemma that the worlds of television, radio and print have long grappled with: can an audience be measured?

The question may appear surprising, not least because one of the benefits of online advertising against more traditional forms is that it is measurable. Advertisers know whether ads are clicked on – it is much harder to find out if a magazine reader has glanced at a particular page.

Yet in spite the web’s ability to provide detailed information about people’s online activities, many of the commonly-used audience measurement statistics such as page view data from Nielsen NetRatings and ComScore are based on panels of internet users and therefore subject to estimation errors.

In addition, changes in the ways the internet is used due to the growth of audio and video, as well as technology that allows web pages to be automatically updated, means page views are regarded as a less relevant measure of a site’s audience.

Instead, there is growing focus on finding out how much time people spend on sites, and other measures of “engagement”. Last week Nielsen NetRatings introduced new measures of time spent, and ComScore has plans to enhance its measures this year.

“There is an irony in that the most measurable medium is causing the most controversy right now in terms of how it should be measured,” said David Card, analyst at Jupiter Research. “If it is not clear what your audience is, it is difficult for programmers to decide what content to develop and what to invest in.”

Already, advertisers and media groups are pressing the providers of internet audience metrics to be more transparent about their methods, and both Nielsen and ComScore have agreed to independent auditing of their numbers. The shift in web practices will lead to a period of uncertainty because advertising prices are often determined by page views and similar metrics. There are also questions about how well statistics reflect audience sizes in different regions.

“It will take us a while to get our heads around this,” said Jeff Ratner, digital director at Mindshare Interaction.

Richard de Silva, partner at Highland Capital Partners, a venture capital firm, anticipates six to 12 months’ uncertainty before the new measures are accepted.

“Anything that affects advertisers affects revenues, and we will have to spend quite a lot of time understanding what the new metrics really mean,” he said.

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