NEWS ANALYSIS: Offline brands want online audits

It was Mark Twain who said, "Get your facts first, and then you can

distort them as much as you please."



These days web sites will go to unseen lengths to get ads. So data about

who a site reaches, how often it reaches them and what happens when

users go there is being dressed in more ways than a supermodel at a

fashion show.



For example, late last year Britannica.com counted four million unique

users by its log files. Nielsen//Net ratings gave it 2.9 million. Media

Metrix gave it 1.5 million.



Now the internet, which set new standards for advertising

accountability, is again facing its problem of site traffic

accountability. It has lacked a third-party auditing force, but that's

about to change.



The Internet Advertising Bureau (IAB) has retained

PricewaterhouseCoopers to complete a "process audit" of how impressions

and audience are delivered among its members. And firms who have made

their reputations auditing offline media are suddenly finding new

business on the internet. The reason is pure and simple: offline brands

want online audits.



"I think a lot of people became distracted from this issue by the

economic factors that have hit the business," said Dick Bennett, VP of

Audit Services at ABCi. "Advertisers want a complete evaluation of their

ad campaigns and that comes from verifying site traffic. When offline

brands invest in an ad campaign, they want sophisticated, third-party

post-campaign analytics. We think we're well-positioned to deliver

that."



ABCi's parent company is the Audit Bureau of Circulation. It is the

accepted source of print media audience measurement and has trusted

relationships with offline publishers and offline brands. Bennett says

he has seen an appreciable uptick in business from both these groups in

the past three months. Several big brands have hired ABCi to execute

online ad campaign audits.



ABCi will expand its efforts to measure site traffic on a

campaign-by-campaign basis, as well as going after contracts with

individual site publishers. Email audits are another area that Bennett

says needs more verifiable third-party results.



These developments put an old issue back on the radar. Namely, the

discrepancy between the audience figures calculated by panel-based

measurement firms, and data from the sites themselves.



In the fall of 1999 an IAB panel, commissioned to study the issue,

claimed the difference between panel-based and log-file figures ranged

from 10 percent to 315 percent. The problems stemmed from what media

owners said were statistically inadequate samples and unscientific

methodology.



Log files measured and collected from the media owners' servers

contained too much impure data, such as international traffic and

automated tracking bots, to be a gold standard. And sites serving niche

audiences, such as Bolt.com, claimed they were being underrepresented

even more severely because panel-based methodology was not allowing

young internet users to be counted.



Back in late 1999, when the NASDAQ was over 4,000, traffic measurement

was a nightmare anyone would have taken over the current market

conditions.



The initiatives undertaken to rectify the measurement problems were

jolted when the NASDAQ crashed in April 2000, then shelved as many sites

became more concerned with survival.



But for those still in business, the issue is important once again. The

reason is still the fact that traffic data can win over advertisers. If

you don't have a growing audience, you won't attract the big offline

brands currently driving online ad revenue. And if you feel your site's

audience is being underreported by Media Metrix or Neilsen//NetRatings,

that doesn't help your case.



"It's not a good thing," says Bolt CEO Dan Pelson. "I know Media Metrix

still under-reports our traffic, for the reasons they underreported it

in the past. The logical way to solve this issue is to involve a

third-party auditor."



While Pelson says the discrepancies still remain, he and others say the

reliance on panel-based measurements has changed. A Media Metrix rating

used to be critical to Wall Street analysts. Now they're more concerned

with monetization of content and customer-relationship tactics. And

advertisers have learned that log files are an acceptable form of

measuring an audience, without being a perfect form. They're more

interested in individual demographics and how a site's audience can be

targeted.



Still, panel-based proponents say their methods have improved, and make

a strong case. For example, Nielsen//NetRatings' principal analyst Tim

Kelly says the company has increased its sample size from 7,500 to

70,000 active internet users over the past two years. The participants

are chosen via random digital-dialling and have Nielsen tracking

software installed on their PCs.



"It's the best way to measure the user perspective," Kelly says. "It's

the best way to measure demographic information, because log files can't

give you that. And it's the best way to measure the competitive

situation. Yahoo! can measure its own log files, but the only way it can

see how it measures up to MSN and AOL is by checking a panel-based

survey."



Actually the debate here is not about using one method over another.



Each proponent of panel measurement can now see the value of log

files.



And Bennett at ABCi will need both in order to be an effective

auditor.



Perhaps some ad dollars are in the balance.



"This is a very important issue," says L90 CEO John Bohan. "We need a

reliable source of auditing. We take a lot of data from log files, and

there are issues with that, unless a third party looks at it."



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