On any given day, people around the world browse nearly 15 billion Web pages. That's an attractive audience for advertisers itching to get their ads on the most-visited sites. But calculating exactly how many people visit any one site is a challenge. So the Interactive Advertising Bureau (IAB), a trade group that sets guidelines and standards for online advertising, is in the midst of a two-year effort, called the Nomenclature Project, to come up with a standard measurement.
Research groups, agencies, and even the Web sites in question measure traffic differently. Some groups use a representative sample of Web traffic to make extrapolations about demographics and surfing habits. The sites themselves can use software that lets them track actual traffic, in real time.
CONFLICTING NUMBERS. Compare that with the method for measuring TV viewership. In the TV industry, ratings are determined by a representative sample. While some may disagree about the measurement's accuracy, it's still a standard -- and shows are rated accordingly. An advertiser wanting to know how many people watch Desperate Housewives gets one straight answer.
But let's say an advertiser wants to know how many people go to Yahoo!'s (YHOO) portals and sites on a given day. An array of answers is likely. And as the Net evolves, these answers are getting more and more confusing. Sites like Yahoo! News aggregate content from a variety of sources, from bloggers to major publications and media outlets. When a user calls up a particular item, who gets to lay claim to that view -- or, to use Net parlance -- that eyeball?
Online advertising has been exploding, rising 25% this year. As advertisers consider shifting more dollars online, they want solid numbers -- not warring estimates. The Nomenclature Project is one of many efforts at standardization the IAM has undertaken. In some ways, it's very elementary. It seeks to establish a common set of rules, or nomenclature, to determine what counts as a site's "eyeball."
HAZY ENVIRONMENT. Other attempts deal more directly with how Web publishers actually charge for ads, says IAB Chief Executive Greg Stuart. The Nomenclature Project seeks to define Web sites by who is looking at what. Unlike the arenas of TV or print advertising, that's not how advertisers pay online. They pay per actual impression, or click -- not just for raw audience. The final standard is still a way off, and the IAB isn't ready to disclose the details it's considering.
When completed, the project is likely to have an impact on ad strategies and budgets. Marketing managers and advertisers organize a branding campaign around exposure, and without reliable Web traffic to compare with TV, radio, or print, it has been difficult to fit online advertising into a campaign's strategy. Such haziness has caused some big advertisers to shy away from online ads, experts say.
Why the reluctance? The Web may be too radically different from traditional media. It's a positive in that the Web's interactive nature provides advertisers a unique ability to track and target potential customers. Plus, new and innovative types of ads are created everyday, including so-called "rollovers" that expand when a cursor moves over them, talking animated characters, and video ads.
KEEP IT SIMPLE. But the flip side of all of the data and fast-moving innovation is confusion and complexity. Unlike the steady offline-media world, the Web is constantly morphing. The IAB is navigating on one side between traditional marketers and brand builders that want online advertising in terms and metrics they can understand, and interactive agencies and technologists on the other who say imposing such strict standards will kill what makes the Web so powerful and unique.
The Nomenclature Project strikes a compromise. It doesn't seek to price advertising in old-media terms such as sheer audience, but it will give marketers reliable numbers to use for justifying pulling advertising from print or TV to put online. It's a way to compare apples to apples. For Web sites, this is key to drawing a bigger share of advertisers' wallets, even if it relies on measures used on more traditional, or old-economy, industries. "At a minimum, you need to have a dataset that is easily comparable with traditional media," says Adi Kishore, director of Yankee Group's media practice.
David Hallerman, senior analyst for research firm eMarketer, agrees. A lot of the detailed data that Web sites give on user activity is overload, he says. Most marketers just aren't sophisticated enough to even know what to do with it. He compares the Web to the brainy kid in class who may have interesting things to say, but may have trouble getting people to listen to it all. "In some ways the online-ad industry might have to sacrifice a level of detail in order to have greater simplicity of measurement, making it more palatable for traditional advertisers and agencies," Hallerman explains.
"IT TAKES TIME." So if the Nomenclature Project succeeds in establishing standard "ratings," advertisers will more easily be able to make decisions on how to allocate resources between the Web and other media. From there, they can drill down into more specifics that affect the actual price of ads.
Plans are under way to provide more standardization in other areas, too, according to Stuart. He says a more important project is devising a standard, auditable definition for "serving," or delivering, an ad. After all, that's what advertisers actually pay for. "We're basically creating a whole new medium here," Stuart says. "It takes time."
But old-economy marketers may just be stalling the inevitable. As the Web evolves, it'll become harder, not easier, to measure a brand's reach in magazine- or TV-like metrics. Emerging Web design trends such as "mashups" that put together two sites are blurring the boundaries between properties even more than content-sharing partnerships do today. Moreover, many Web evangelists, like John Cate, national media director for ad agency Carat Interactive, are loath to throttle such innovation in the face of standardization.
ANOTHER YEAR TO GO? "This industry changes greatly every three to six months, and I don't want to lose that," Cate says. Instead, he expects old-economy media to start looking more like the Web. For instance, broadcasters could use video on demand or digital-video recorders to track what people are actually watching and sell advertising based on that kind of data, not just ratings.
With such large stakes and so many constituencies -- some pushing for change, some resisting it -- it's no wonder the seemingly simple Nomenclature Project has taken two years, and may well take another year before the standard is widely deployed. Not everything, it seems, is faster in cyberspace.
Lacy is a reporter for BusinessWeek.com in Silicon Valley
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