April 23, 2007 10:51 AM PDT

Online ad group: Show us the traffic numbers

Online ad group: Show us the traffic numbers
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December 19, 2005
After years of complaints that the two leading Internet traffic measurement firms are underreporting figures, the Interactive Advertising Bureau is asking ComScore and Nielsen/NetRatings to submit to audits.

The IAB, which represents more than 300 new-media advertising companies, said it found noticeable discrepancies between the Internet audience measurements of ComScore and Nielsen/NetRatings and those of IAB members' own server logs. IAB also found conflicting numbers between the two research firms' figures and cited a lack of transparency and outdated methodologies as being problems. The group wants the firms to submit to audits of their statistical measurement processes by the Media Rating Council (MRC), an organization that looks at media measurement and accuracy across all media.

Web sites have for years complained that the two firms underreport their traffic. The lower the traffic reported, the less money Web sites can charge for advertising.

In a letter on Friday to ComScore and Nielsen, IAB Chief Executive Randall Rothenberg wrote that "to persist in using panels that potentially undercount or ignore the diverse populations that are the future of consumer marketing is to deny marketers the insights they need to build their businesses."

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William Pulver, president and CEO of Nielsen's NetRatings division, responded to the IAB's letter on Monday afternoon. "NetRatings shares the IAB's enthusiasm for building accountability across the digital marketplace," Pulver commented, saying that Nielsen looked forward to meeting with the IAB. He added that the research firm has already completed a pre-audit process with the MRC and is "currently executing on a formal Research Plan jointly developed with the MRC's Research Committee."

Pulver also authored a response letter to the IAB's Rothenberg in which he claimed that their "interests are aligned" and reiterated that Nielsen looked forward to working together on the issue and going through with the audit process.

ComScore had agreed to an audit earlier on Monday.

"ComScore welcomes the objective outlined in the open letter of achieving transparency in our panel methods. To that end, we began working with the MRC six months ago as part of an audit of our methodologies, and we intend to continue that effort," the company said in a statement Monday. "We are also in the final stages of an evaluation of our methodology by the Advertising Research Foundation, and we are confident that our methodologies will withstand the scrutiny of a third-party evaluation."

Sheryl Draizen, IAB senior vice president and general manager, confirmed that the IAB has been in talks with ComScore regarding the audit by the MRC.

Draizen said there was no single event that sparked the letter, just continued reports about discrepancies in Nielsen and ComScore's statistics. "There has been quite a lot of coverage on this particular topic from a bunch of publications over the past few months," she said.

At least one Web site founder was pleased with the news. "It sounds great to have the rating services submit to outside audits. It's surprising they don't already do this," said Mark Pincus, co-founder of social networking site Tribe.net. "The question of consistent reliable audience measurement that can be apples-to-apples across all sites has been a perennial problem for the industry."

Dan Agronow, chief technology officer of Weather Channel Interactive, said he has complained to both ComScore and Nielsen about traffic to Weather.com being under-reported and he finds the process "frustrating."

"This is a long time coming, and I think it will help out everybody in the industry," he said. "We have worked closely with them to try to get our numbers corrected. Sometimes we are successful and sometimes not."

"This has been going on for about seven years," added Bob Liodice, chief executive of the Association of National Advertisers. "Our members were part of the group that came forward" wanting more accountability with the online traffic reporting statistics, he said. "Marketers are spending billions of dollars across all media. The Internet is the most accountable medium out there, yet it is not accredited with the MRC."

Pam Horan, president of the Online Publishers Association, said her group's members, too, had complained about traffic figures from the research firms. "We are also in support of this," she said. "We believe there is a real benefit...Transparency can ensure that the audience counts are correct."

"It is ironic that the most measurable medium is still not entirely accurately measurable," added Tim Hanlon, a senior vice president at Denuo, a consulting arm of the advertising agency Publicis Groupe. "The reality is: we need objective third-party data."

The lack of accurate Web site traffic measurability threatens online ad spending, Draizen said. As more advertising dollars are directed toward the Internet and new-media outlets like in-game spots, confidence in audience statistics is more crucial than ever, she said.

"It has become more and more important because marketers are starting to allocate real dollars to interactive advertising, and they really need to have confidence in the numbers," Draizen said.

She was unable to cite any formal numbers regarding potential advertising revenue loss stemming from uncertain or inaccurate traffic reports, but did say that advertisers and Web sites alike experience a negative impact. "By virtue of the fact that advertisers and agencies are making decisions based on Nielsen and ComScore's numbers both in terms of where they allocate their dollars and how much they're willing to spend with a certain site; therefore, they have a material impact on anyone's business."

IAB's letter was unanimously approved by its board of directors, which includes representatives from Google, Yahoo, the New York Times, Fox Interactive Media, AOL, NBC Universal, and CNET, parent company of News.com.

While ComScore and Nielsen are the biggest names in Internet traffic reports, they aren't the only ones out there, and--according to the IAB--they aren't the only companies that ought to have more transparency into their methodologies. "Anyone who publishes audience metrics should get audited," Draizen said, "and I don't think that anyone out there currently is."

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ComScore, audit, Nielsen/NetRatings, NetRatings Inc., methodology

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they can't reveal the real numbers
that would threaten their TV and print tracking services and would reveal that TV and print media is competing with the internet for viewership.

TV and print ads are expensive, internet ads are cheap. if it turns out that internet viewership is significantly higher than previously stated, there might be a trend for big advertisers to start advertising online more and spending less to advertise on TV or in print.

that can't be good for the people who make those annoying geico and vonage commercials.
Posted by chris__anderson (23 comments )
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