Online advertising in the UK passed the £2bn mark last year, according to the latest figures from the Internet Advertising Bureau UK and PricewaterhouseCoopers. In 1997, the total spent on online as a medium was just £8.4m. But future growth is likely to be much slower than over the past few years, unless big brand name advertisers – and in particular, packaged goods companies – come on board.
The packaged goods giants are all talking about committing a share of their annual marketing budget to online that at least matches the amount of time consumers spend using the internet. But they are unlikely to ever actually do so unless the internet industry can address one simple concern: the lack of an industry-wide standard for measuring online traffic, along the lines of BARB for television.
Mike Hughes, newly appointed director-general of the Incorporated Society of British Advertisers (ISBA), says: “It’s high time to rise to the challenge of providing customers with credible user-centric audience information. The low-hanging fruit (the easier target customers – direct response, travel, finance and so on) have been reaped, but the remaining categories of advertisers (specifically packaged goods) need much more convincing.”
And Alex White, director of the Association of Online Publishers, part of the Periodical Publishers Association, says: “There is a feeling among advertisers and agencies that they can’t do without it for much longer. If anything is holding back the growth of online advertising, it’s the lack of a media currency.”
Providing just that user-centric data is the official aim of the recently formed Jicims – the Joint Industry Committee for Internet Measurement Systems, which has been set up by ISBA, the IAB UK, the Association of Online Publishers and the Institute of Practitioners in Advertising (IPA).
The starting point, the participants say, is for Jicims to create a standard that will allow for the provision of reliable user-centric data, which will complement the standard for site-centric data already created by ABCelectronic (Audit Bureau of Circulations Electronic, the online division of ABC).
Peter Bowman has just taken up the position as general manager of Jicims. Bowman has worked in media planning, buying and research for media owners and agencies, including WCRS, MPG and Flextech, and has been involved with running Broadcasters Audience Research Board (BARB), the National Readership Survey (NRS) for several years and the steering group that created Jiccar – the Joint Industry Committee for Cable Audience Research.
Jicims, Bowman says, faces peculiar challenges in that most other Jics were created when the media they measure were in their infancy. For one thing, “there is the issue that what the internet is, and what online is, changes so rapidly”. Not to mention the fact that the internet is not a static medium: “At least the ads on the magazine page don’t change while you’re looking at them.”
Drowning in data
Perhaps a more important issue is the fact that “the internet is already rich in research”. He acknowledges that many people, mainly involved in some way in measuring Web traffic, question the need for something like Jicims, given the apparent richness of data already available. And Bowman accepts that “you could argue that BARB has commoditised the TV medium, and there is a desire not to do that with the internet.”
But he is adamant that if online is to succeed in attracting big media budgets, then media planners must have access to a media currency that adheres to an accepted industry-wide standard.
ABCelectronic managing director Richard Foan says “Jicims is about measuring types of audience, while ABCelectronic is about certifying the figures on the actual physical transaction side. It will be like the difference between ABC audits and NRS figures.” ABC figures tell you how many copies of a magazine or newspaper were sold: NRS figures give in-depth information about how many people read those newspapers, and relevant demographic data.
Paul Cook founded e-mail marketing specialists RedEye, and has now moved on to launch behavioural targeting company Positive Feedback. An expert on measuring Web traffic, he says: “Online measurement is currently blatantly inaccurate. You can prove that by looking at user-centric and site-centric data side by side – they don’t agree. If there isn’t a currency to cross-compare, how will brands know what they are getting?”
He argues: “If I was an advertiser wanting to buy 15to 24-year-old males off a big portal, I should be able to. I can with ITV.”
There are issues that have to be addressed if any standard media currency is to be accepted. For one thing there is the issue of what counts as a “user”. The IAB US differentiates between “browsers” (the computer itself) and “unique users” (an identifiable individual). The two are not necessarily the same thing – more than one person may use the same PC at different times. Other IABs around the world, however, do not distinguish between the two.
Then there is the problem of IP addresses (internet protocol addresses, the unique number that allows the internet’s servers to “recognise” individual computers). These are not always the same – some systems use so-called dynamic IP addresses, which would be a bit like a mobile phone number changing each time the user makes a call.
A further problem is likely to be resistance from certain sections of the internet industry, many of whom say they have yet to be convinced of the need for such a common currency. As Bob Ivins, executive vice-president and managing director of ComScore Europe, says: “The UK is already the most developed online advertising market in the world [in terms of online’s share of total media spend]. The US is the biggest market in absolute terms. If those markets haven’t needed a ‘common currency’ yet, why are we bothering?”
He also challenges the idea that existing industry standards such as BARB in the UK or the Nielsen Ratings in the US are above suspicion – “there is a whole industry devoted to debunking them, saying that the sample size isn’t representative, or what about TiVo and time shifting?”
Furthermore, the speed of change in technology is so rapid that “whatever Jicims establishes today could be obsolete in a year”. And convergence of technologies means “single medium audience measurements are going to be irrelevant anyway. For instance, a brand like the FT won’t care how people consume its content – be it through TV, online or mobile – as long as they do consume it.”
Ivins argues that there is already enough information available for marketers to make their minds up: but IAB UK chief executive Guy Phillipson says that is half the problem. “You can measure almost everything online – and you’ll find yourself awash with data,” he says. “And furthermore, you can measure something with ABCelectronic, ComScore and Nielsen, and you’ll get different results. We want to establish something that tells you about reach and frequency.”
Cook says media owners appear to be creating inventory by adding more positions to pages, leading to a decline in click-through rates. He adds: “There is no indication of the relevant quality of placements, ie what is the ratio of banner impressions to user minutes (similar to listener or viewer hours). With Web 2.0 making page and banner impressions a redundant metric, moving to more time-oriented metrics makes a lot of sense.
“On a similar note, there is no guarantee as to how long ads are viewed for – something that is clearly important from a creative perspective. We’ve just added a feature to our ad server that enables advertisers to measure how long their ads are viewed for, and we are expecting the results to effect the creative and media schedules significantly.”
As Cook points out, the current measurement system was invented by newspaper publishers and the industry needs to discard the old methods and start again from a broadcast perspective.