Online Ad Management Syncs Up

JUNE 13, 2008


Mike Leo, President and CEO of Operative, co-founder of Avenue A.

Mike Leo is best known as co-founder of Avenue A (now Avenue A | Razorfish). Parent company aQuantive has acquired multimillion dollar accounts like Microsoft, Gateway, Expedia and Disney, and earned Adweek magazine's Independent Interactive Agency of the Year award.

Mr. Leo joined Operative in 2003 as CEO and president. The company provides software and services to media companies, including Dow Jones, NBC and Fox Interactive Media, whose MySpace now runs 3% of all Internet ads.

With coordination and billing of digital ads growing more complex, eMarketer spoke with Mr. Leo about how publishers are coping.

eMarketer: For those who might be unfamiliar with Operative, what does the company do?

Mike Leo: It lets media companies manage their inventory and productize it. Salespeople use those products to integrate with DoubleClick, aQuantive and other ad networks. The software helps operations staff execute campaigns, including trafficking and operating ad servers on others' behalf. Then it deals with billing.

eMarketer: Don't media companies already get all this done?

Mike Leo: Sure, but the typical publisher runs 16 different systems. The software of choice is Microsoft Excel. We often consult with clients on best practices and workflow as much as on software.

eMarketer: Operative recently added National Public Media, the national media sales representative for public TV and radio stations and their Web sites, as a client. How does NPM handle ads on its various properties?

Mike Leo: The creative and collateral is created by agencies; that is unique from format to format, be it podcast, radio, site or what have you.

On the publisher side, NPM now coordinates its proposals. Everything is in one proposal for agencies: Reporting, inventory, tracking and billing all now come from one proposal. There's a single process, for everyone.

For NPM, the biggest thing is that they can scale and integrate the various systems they use, including DoubleClick, Salesforce, Atlas and billing technologies. So using a single system for sales, inventory checking and system management, things that used to take three hours to a day across media properties and departments now take 10 minutes.

eMarketer: How do other companies use this type of system?

Mike Leo: Reuters manages its Times Square digital billboards and Web ads in the same campaign. NAVTEQ delivers Web and mobile ads through the same infrastructure.

By automating ad inventory details, SmartMoney.com reduced unsold inventory. As the company increased yield across its inventory, effective CPMs have risen by nearly 20%.

Companies on the system could also be networked to create a wider inventory selection.

The Internet reduces friction and improves communications, which allows people to pull together what look like disparate firms on a single product, be it the parts needed to make airplane, the components that go into advertising or many other products.

eMarketer: How are other companies dealing with these issues?

Mike Leo: Google, Yahoo!, Microsoft and AOL are all building closed systems of their own.

eMarketer: Where do you see digital ads going in the next few years?

Mike Leo: Anyone in the Internet media business in three years will be in a tough position. Advertisers will be demanding much more in the way of accountability. The complexity of fragmentation makes it tough right now to provide that accountability. As the complexity disappears and the problems associated with media fragmentation are solved, tough advertisers will use that as leverage.

The Monetization of Ad Inventory

Written by Darren Herman - February 24, 2008

Roger raises an important issue when it comes to assessing company valuations and inventory: how much of it is monetizable? This is an extremely important question and often gets answered by the associate or general partner of a venture firm who is building the financial model for the startup they are looking at investing in or the M&A team who is looking to acquire an ad-supported startup.

One of the top concerns of mine and I’ve been through it first hand: when venture capitalists or corporate development teams are working through a financial model to figure out how much your inventory is worth, I can almost guarantee not one of them has ever spent any time in an ad agency (on the media team) or in marketing at a brand. I’d imagine over 90% of all VC’s or M&A folks come from finance, engineering, or similar backgrounds.

This is a problem (there is always a solution to any problem) when it comes to monetizing the web. We like to think that just because Facebook delivered over 12 billion pageviews in January 2008 (ComScore), they are able to monetize all 12 billion. Unfortunately, that is not and most often never the case. Case in point: Yahoo sells out the homepage of their site, but I know first hand that they have quite a bit of inventory that goes unsold on other areas of their network. Trying to buy a Yahoo! home page though is quite expensive and is sold out for weeks at a time.

There are a few important reasons (amongst many others) why any company who sells advertising on their website may have unsold inventory (startup, emerging company, or world renown):

1. Ad sales team is not effective. Tough to find, attract, and maintain a top-notch sales team in any industry.
2. Depending on the size of a company, a sales team can only cover so much geographical territory. For every territory not covered, money is being left on the table.
3. The ad marketplace (agencies and/or brands) may not want to purchase the inventory available for a host of different reasons.
4. The business environment is not conducive to ad spending at this time.

Most startups that I’ve had the chance to work with like to deploy a direct sales strategy first and sell all of the high-level integrations (longer sales cycle but more expensive buys) and then outsource standard inventory (IAB) to ad networks, rep companies, and participate on advertising exchanges.

With so many advertising supported (either fully or partially) startups in the market, the networks and exchanges are growing at an increasing rate. My guess is that the amount of inventory available to advertising networks is outpacing the additional advertising dollars available so the % of monetization of inventory is decreasing on a month-to-month basis. If there is a downturn in the economy, this will surely affect the sell thru and the % of monetization will decline rapidly.

Most of the purse strings of advertising budgets are held by ad agencies. Yes, ultimately, brands sign-off on any plans, but agencies are doing a lot of the work to make strategic and tactical recommendations as to where to spend the brands money.

There are many types of agencies who spend their money digitally:

1. Interactive (only) shop
2. Performance marketing (direct) shop that has a digital capacity
3. Fully integrated agency (digital, print, OOH, television, etc)
4. Others..

The way that each of these agencies looks at the digital environment may be very different from one another. A fully integrated agency may not be looking at performance driven marketing (CPA type stuff) whilst an Interactive shop may not want to amplify what the brand is doing offline into the online world. These are just examples and may or may not hold true for any and all of the agencies.

The bulk of the premium inventory on many websites are being sold to Interactive and Integrated agencies as they are the most creative and high-impact. Beyond this, agencies may purchase inventory from ad networks to add reach (or hit certain goals) and in some (increasing) cases, ad exchanges, though compared to the larger pie, small [today].

Just because you have 12 billion page views, should you be worth $XXCPM * 12 billion/1000 * XX months? (or whatever the valuation equation is?) I’d also like to see some marketing gurus head into the finance world, that way, we can add some context to the valuations occurring today. The majority of sites will not monetize 100% of their traffic 100% of the time. Please remember to keep this in mind.

One other thing to keep in mind:

1. Not all agencies pay the same rate
2. Rates are different depending upon the category vertical, time of year, etc.
3. Most major buying firms are paying well below rate card

Advertisers still don't know what surfers want

Disagreement continues over how to best gauge potential to buy

The Associated Press

updated 7:40 p.m. ET, Mon., Dec. 17, 2007

NEW YORK - Online advertising jumped 25 percent this year, raking in a cool $20 billion, but Internet executives say that figure could have been even higher if advertisers had reliable and consistent ways to measure online audiences.

Unlike traditional media, where each format has one main ratings provider — The Nielsen Co. for television, Arbitron Inc. for radio and so on — there are many sources of data on online audiences. And they frequently conflict.

Disagreement also continues over which criteria best gauge users' potential interest in a product or service. And the resulting data aren't easily comparable to ratings in other media anyway.

It's a "problem of plenty," as Manish Bhatia, president of global services for Nielsen Online, a unit of The Nielsen Co., told a recent conference on online audience measurement.

Web publishers are frustrated that the lack of cohesion is holding them back from capturing more of the $250-billion-a-year U.S. advertising pie, especially given the huge amount of time people spend online.

"This industry looks like it can't get out of its own way," said Steve Wadsworth, president of The Walt Disney Co.'s Internet group. "We need measurement of the audience and their use of the system that's clear, simple and actionable for a marketer. You need comparability with other media."

As Internet executives hash over clickstreams, page views and user panels, 2008 is sure to see even more evolution of the way online audiences are measured. Other media — including TV, radio and billboards — also are revamping the way they calculate ratings in response to pressure from advertisers trying to measure how effective their ad dollars are.

David Hallerman, senior analyst at research company eMarketer Inc., said many large advertisers remain shy of the Internet because of confusion over audience measures. Some also want to stick with video ads, which are still in their early stages on the Internet.

The Interactive Advertising Bureau, which represents more than 300 Web publishers, has called for Nielsen Online and comScore Media Metrix to undergo audits by the Media Rating Council, a process that is still under way. ComScore and Nielsen both still use panels, while Quantcast Corp., a relatively new agency, combines panel and Web-based data to produce ratings.

Resolving what to measure is as complex as deciding how to measure it. Some sites produce their own ratings based on internal server logs, on the theory that panel-based data understate traffic. But comScore says internal logs can overstate traffic when users delete identifying files called cookies from their browsers because servers think they're seeing a "unique visitor" each time that user arrives.

Counting unique visitors can also be challenging — and lose meaning — when an individual logs in to several different computers, or a family of six all use the same computer. "Page views," once a key indicator, haven't been since Ajax software let people view different elements on one page instead of going to a new page for each one.

From any vantage point, there's still no clear equivalent for reaching a potential audience of 18 million people around the country at the same time with a single ad on the TV show "Desperate Housewives."

"There aren't well-established, tried-and-true standards in the industry, which need to be worked through," said Jeff Marshall, senior vice president of digital marketing at Starcom USA, a major ad-buying agency. "The concerns are escalating as more and more of our clients are shifting significant amounts of money into the space."

Traditional measures may not even apply to the Web, some executives say, because the benefits the Web offers — most notably, the opportunity for users to click right through and buy the advertiser's product — aren't comparable to other media.

But Web publishers want to give advertisers some basis for comparison.

"Advertisers want to be able to understand that their online spend got this reach, and their offline spend got that reach," says Jim Spanfeller, president and CEO of Forbes.com.

Or, as Randall Rothenberg, CEO of the Interactive Advertising Bureau, put it: "Marketers want to know, If I take $10 out of TV and put it into online, am I getting $10-plus back?"

Peter Daboll, a research guru at Yahoo Inc. who holds the title Chief of Insights, acknowledges that it's still a "challenge" to work through the various kinds of online data.

"We're not dealing with a perfect science here," said Daboll, formerly chief executive of comScore. "What we're trying to do with our advertisers is take some of the mystery out of this."

Indeed, advertisers are demanding just that.

Bob Liodice, CEO of the Association of National Advertisers, said corporate leaders have been ratcheting up the pressure on marketing departments to justify their ad budgets with hard proof they are generating business.

In response, TV broadcasters this fall started counting how many people watch commercials during a show. Radio ratings company Arbitron Inc. is rolling out a new electronic measurement system that uses a portable device to capture what stations people actually hear, instead of what they recall hearing. The system is running in Philadelphia and Houston, with nine more markets to be added in September.

And the outdoor advertising business will replace estimates of vehicle and pedestrian traffic in front of billboards with a measure that takes into account how visible a certain billboard is. The new measure will also include estimates of demographic data, something other media already provide.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/22303017/

Nielsen, ComScore Taking A Measure Of Their Web Metrics

August 28, 2007: 08:05 PM EST

Aug. 28, 2007 (Investor's Business Daily delivered by Newstex) --

Companies in the business of tracking online usage are searching for measurements that reflect new technologies and ways people interact with Web sites.

Tracker comScore SCOR has introduced a slew of metrics this year that measure everything from site visits to time spent and what kinds of hardware and software users have. ComScore this month introduced qSearch 2.0, a service that expands the company's measure of online searches beyond leaders such as Google GOOG and Yahoo (NASDAQ:YHOO) YHOO to include searches on commerce sites, via downloaded toolbars and through local desktop search.

The idea is to give clients -- companies that operate Web sites and/or advertise on sites -- a clearer picture of user behavior and into how to best to spend their search marketing budgets.

"When we see there's a better way to be tracking something, we're going to go out and do it," said comScore analyst Andrew Lipsman.

ComScore rival Nielsen/NetRatings, a unit of privately held Nielsen Co., last month added a total-minutes metric to its measurement service. It also added a service called GamePlay that measures use of console and PC video games.

ComScore and Nielsen/Net-Ratings provide research that helps Web site publishers set ad rates and helps advertisers get more for their money. The trackers hope their metrics will boost revenue. That will likely happen only if the metrics help sites gauge their worth to advertisers, help provide better online ad pricing and more effectively get ads in front of the right viewers.

What's driving the changes?

One factor is ways Web sites are created. A rising number of sites use Asynchronous Javascript And XML, or Ajax, a way of using Java, XML and other technologies. Ajax makes it possible for pieces of Web pages to be updated on the fly without refreshing the whole page. One result is visitors call up fewer Web pages -- and the site falls in rankings based on standard page-view measurements.

The rise of video is stripping additional relevance from the page-view metric, as people spend long periods viewing a single site page.

Another change in Web viewing, says comScore, is that up to one-third of Internet users regularly delete their cookies, the bits of software that many sites inconspicuously store on users' computers so users can be identified on future visits. That's how sites greet you by name, for example.

Without the cookie identifier, users will then be counted as new, or unique, visitors the next time they come to a site. That artificially inflates another standard measurement of Web site popularity, the number of unique visitors a site gets per month. (A person who enters the site once and another who enters the same site 1,000 times should both count as one unique visitor.) Cookie deletion is causing sites to overstate their audience by as much as 150%, estimates comScore. That can lead sites to overcharge for advertising.

Alas, many people in this field concede there is no ideal way to measure online audiences. For instance, it's pointless to compare the audience that flocks to YouTube, which strives to hold onto visitors as long as possible, with that of a site like Google that's trying to get people in and out of its search engine as quickly as possible -- preferably by having users click its search ads to link to an advertiser's site.

The latest changes help, many say. Page views aren't "a very good gauge anymore of user behavior," said Scott Ross, product marketing director for Nielsen/NetRatings' NetView service. "Time spent (per site visit) is a much better common denominator."

Peter Daboll, chief of insights for Yahoo and former CEO of comScore, agrees.

The page view "does seem a bit archaic and doesn't seem to measure anything well," he said. "We're making progress in trying to understand what matters."

What matters is a combination of getting users to a site in the first place along with the extent to which those users are engaged once they get there.

That is best measured by time spent on a site, says Jack Wakshlag, chief research officer for Turner Broadcasting. "If people spend lots of time on a site, then it's an engaging Web site," Wakshlag said.

But relying on time spent on a site isn't perfect. Time Warner's (NYSE:TWX) TWX AOL family of sites moves up in the rankings because of its instant messaging service. It inflates measurements of time spent because it registers as site engagement while users have it running, and many users keep it running in the background.

Conversely, Google ranks low in time spent on a site, per session, because the site is designed to move people to other sites fast.

Such differences in what sites try to accomplish is why comScore plans further changes to its metrics.

It's preparing to launch a service that will measure ad impressions, or how many times an ad is "served" to a Web surfer.

It's also looking to refine its measures. If a user has an IM window open, along with streamed video of a baseball game and a text-based news site, comScore wants to measure how much time each application is in the foreground.

The new measurements from comScore and Nielsen/NetRatings could help online advertisers who face a confusing market of wildly fluctuating prices.

"The advertisers are going to see less variability in the prices they see from sources A, B and C," said Bill Cook, senior vice president of research and standards for the Advertising Research Foundation.

Advertisers strive to track the effectiveness of online ads.

The goal, says Yahoo's Daboll, is to best gauge the impact of advertising. "There's nothing worse," he said, "than throwing money at an ad campaign and not knowing how well it works."

Measurement is easier for direct marketers.

Direct mail and e-mail had the highest return on investment of any target marketing method in 2006, according to Harte-Hanks' "Target Marketing Priorities Analysis: 2007 Key Trends" study.

The survey, conducted by CSO Insights, questioned marketers about their tactics. More than 70% of B2C marketers said direct mail brought them a high ROI, while more than 45% said e-mail did (respondents were allowed multiple responses).

Do direct mail and e-mail truly bring the best ROI? Was direct mail judged as having a high ROI only because it's relatively easy to track?

Bill Goldberg of Harte-Hanks pointed out, "As companies invest more in multiple channels in a bid to acquire customers, and to retain their loyalty, it appears businesses continue to grapple with data management and data insight — and just what the metrics are saying."

With other methods, such as consumer-generated media, ROI is openly questioned.

eMarketer has also noted that lack of data can make measuring ad ROI tough. But with the Harte-Hanks study, even having the data doesn't mean the case is closed.

A Pitney-Bowes study cited in an April 2007 press release also found mail and e-mail effective for communicating new product information, which could be construed as an indicator of high ROI.

eMarketer Senior Analyst David Hallerman said, "Trackable direct response marketing methods typically have a higher ROI just because of that direct step, when it works, from marketing to conversion."

"On the other hand, newspaper/print ads and TV ads show much lower ROI, not only because they're more difficult to track but also because the primary intent is typically different... the brand's mindshare, not the direct conversion."

eMarketer Senior Analyst Lisa E. Phillips added, "It depends on the product being marketed. Direct mail works very well for financial services, especially credit cards, investments and insurance. CPG companies do well if they send coupons."

Learn how search marketers measure results. Read the eMarketer Search Marketing: Counting Dollars and Clicks report.

Agencies Should Take the Lead in Measuring Results

Instead of Talking Around It, Give the Client a Push

By Marc Brownstein

Published: July 18, 2007

Marc Brownstein

The measurement debate rages on in small agencies. Clients say they want it. And I believe a good number of agencies are embracing it (though I don't know how many are actually implementing it). The question is: At what point, and to what extent, is the agency liable for measurement?

After speaking with some of my agency CEO peers, as well as clients, I'm convinced there's confusion regarding roles. Are agencies responsible for meeting goals or actually providing the validation? It used to be that clients had a quarterly ad-tracking study to measure success; now agencies have to provide the vehicles for measurement as well as the metrics. There's also confusion regarding buy-in on metrics.

If the CMO is on board with how you are going to measure success, is that enough? Or does the CEO need to be on board, too? We had an experience recently where we agreed with our client about how success would be measured. What we hadn't counted on is that the chairman of the company had a different idea about how it should be done. We learned about it after the campaign ran.

I am sure some agency-client relationships are doing a nice job of applying ROI. However, most are just talking about it. Tripping over it. Glossing over it. Not being fully committed to it. Hoping the client won't bring it up. Afraid to have the frank discussions about it at the beginning of a relationship, or during it. Or all of the above. As a result, there is too much gray area, and both sides are growing frustrated.

So I think agencies ought to take the lead. Bring up measurement with your clients. Agree on what success is, how it will be tracked, and who will be responsible for reporting it. If you wait for clients to take the initiative, you could get your agency in trouble. Today, it is irresponsible to launch a marketing campaign without defined goals and metrics. Do that, and you'll increase your odds that you'll get fired soon -- because no one will know if your campaign worked, even if you think it did. Just one caution: if sales is the metric, be sure that your client has excellent methods of tracking. And if the product is a complex sale, you had better be 100% confident that your client has a sales team in place that knows how to close. Or else, the blame game will be pointed at you.

Good luck. And may the ROI be with you.

AOL up, Google down? Not so fast

By Elinor Mills

http://news.com.com/AOL+up%2C+Google+down+Not+so+fast/2100-1038_3-6196348.html

Story last modified Thu Jul 12 13:09:01 PDT 2007

While it wasn't exactly the lead story on the nightly news, a new way of measuring Web site popularity startled the Web punditry earlier this week when it put long-suffering AOL in the top spot.

You read that right: that's above Google, MySpace.com, MSN and any other Web site you'd expect to be doing reasonably well.

Crazy, you say? You're not the only one.

Here's how it happened: Nielsen/NetRatings modified its Web site popularity gauge, adding time spent to its unique-audience metric. Using a new "total-minutes" calculation, Nielsen/NetRatings said AOL was the No. 1 site in the U.S. in May, followed by Yahoo; MSN/Windows Live; Fox Interactive, which owns MySpace.com; Google; eBay; Microsoft; Electronic Arts; Apple and YouTube, which is owned by Google.

Does this mean the Time Warner Internet subsidiary is--much to our surprise--somehow more valuable than Google? Not exactly. It's Google's ad dollars (about $10.6 billion annually and growing fast), not AOL's ability to get people to hang around, that really counts.

"You could say Google is very efficient in getting people where they want to go and thus it reinforces loyalty," said Greg Sterling, principal of Sterling Market Intelligence. "Somebody spending a lot of time on a site may be deeply engaged or may be struggling to find what they are looking for."

Nielsen/NetRatings seems aware that its new measurement method may have thrown some people for a loop. Thursday afternoon, the company sent a news release stating that it's still using more traditional measurement methods, such as total page views, pages per person, unique audience and average sessions per person.

In fairness, results have always differed based on who is measuring the traffic and how. For instance, Nielsen/NetRatings rival ComScore ranked AOL second among the top Web sites in the U.S. for May based on unique visitors, below Yahoo and above Google.

"Exposure doesn't necessarily mean engagement. I could be distracted, taking a phone call or have left the room."

--Tim Hanlon, senior vice president, Denuo

It's also understandable that Nielsen/NetRatings would want to look at how long people spend on a site given the widespread adoption of streaming media and applications like Ajax, which cut down on the need for page re-loads and thus make counting page views less of a meaningful metric.

Here's another point to show the ratings experts at Nielsen/NetRatings haven't completely jumped the shark: AOL, Yahoo and MSN/Windows Live were boosted by people doing e-mail and instant messaging on their respective services, while search sites are at a disadvantage because people usually leave the site quickly once they get their search results.

Using the more traditional unique-audience calculation, the top 10 list looks like this: Google; Yahoo; MSN/Windows Live; Microsoft; AOL; Fox; eBay; YouTube; Wikipedia and Apple, with AOL in the fifth spot.

But let's give the AOL folks their moment: The additional measurement seems to be giving them hope in the wake of declining subscribers and a move to an ad-supported, free Web-based service business model. The company has had numerous reorganizations and layoffs in recent years as it struggled to get back on track. And the new measurements give AOL execs hope that their "brand advertising" strategy has legs.

"Brand advertisers who are moving more and more dollars online are interested in a combination of reach and engagement and are leveraging what AOL offers to create a brand experience that they can't capture in other media," Mike Kelly, president of domestic Web sales at AOL, said in a statement. "This focus on time spent validates what advertisers are telling us...that pound per pound our audiences are more engaged."

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AOL spokeswoman Amy Call said the fact that Nielsen/NetRatings has AOL ranked No. 1 in terms of time spent is a validation of AOL's efforts to keep people on the site for longer with relaunches of its news, sports and video sites and its Web-based e-mail service that integrates instant messaging.

But brand ads targeting engagement or time spent on a site are different from those aimed at Web searchers. And let's face it, "brand advertising on the Internet has been a poor second cousin to search," said Charlene Li, an analyst at Forrester Research. "Search ads are all about relevancy; getting people to the content they're looking for. On AOL it's all about people engaging with the brand."

Search advertising is valuable for an obvious reason: It often reflects a consumer's intention to buy something, said search expert Sterling. Whether someone spends a long time or a short time on a Web site is interesting, but it doesn't necessarily equate to ad dollars. More importantly, it doesn't mean that someone is "engaged," a big buzzword on Madison Avenue right now, said Tim Hanlon, a senior vice president at Denuo, a consulting arm of advertising agency Publicis Groupe.

"Exposure doesn't necessarily mean engagement," Hanlon said. "I could be distracted, taking a phone call or have left the room."

Neilsen Retools metrics

Nielsen/NetRatings plans to drop its old methods of counting pageviews to gauge Web site popularity, instead opting for a system where it would measure how long a user stays on a site.

AJAX and other dynamic page generation techniques have rendered the page view a outdated metric and video also carries the same effect.

Nielsen/NetRatings will begin reporting total sessions and total time spent on a site in order to figure out site popularity.

Using this method will shake up Web rankings quite a bit. For example, under the old system, AOL was sixth in pageviews. However, using the new system, it is number one with 25 billion minutes spent on its pages in May. The opposite happens to Google which drops to fifth from third using the new method.

Other Web ratings firms also have addressed the problems new technologies pose to metrics with their own systems. comScore now defines its visits as the number of times a person returns to a site with at least a half-hour break between page loads.

Ad firms look for better gauge of success

By Theresa Howard, USA TODAY

CANNES, France — While the global ad industry is again gathered here to honor ad creativity, much of the talk at the 54th Cannes Lions International Advertising Festival is about number-crunching.

New media, as well as audience fragmentation, have upset the old agency model of creating ads and taking a percentage of the mass media spending as compensation. Today, there is pressure on agencies by marketers for new measures of the effectiveness of the $600 billion a year they spend worldwide on advertising, and agencies are trying to come up with models for being paid for that analytical work.

"Since every dollar has to work harder, clients are asking agencies to provide better predictors of success," says Anne Benvenuto, executive vice president, strategic services for digital agency R/GA.

But such predictors and pay models are all over the map. Particularly with fragmented new media, audience size often isn't high enough for statistically valid measures, and few standards for how to pay are in place.

"Digital and some of the emerging technologies don't have the reach and scale that TV has had," says Neil Canter, who heads Marketing Accountability Partnership, a division created at ad holding company Interpublic Group two years ago as a third-party ad measurement group. "So there are not very good inputs to the model. If you're going to figure this into compensation, you have to have an agreed-upon yardstick."

That yardstick is still up for grabs. Nielsen has only recently begun measuring commercial viewing, and the Internet Advertising Bureau is trying to establish standardized measures of Internet traffic.

"The name of the game for advertisers is using technology to document the effectiveness of ads," says David Evans, managing director of global competition policy at Massachusetts Institute of Technology and author of Catalyst Code: The Strategies Behind the World's Most Dynamic Companies. Evans says successful agencies will use analytical tools to measure the impact of ad ideas on sales and attitudes.

New measures and pay plans:

•Flat fees. Simplest is a negotiated fee for service based on costs and profit margins to measure an ad's effectiveness across media. Depending on the scale and scope of a project, marketers can pay anywhere from $35,000 to $1 million to apply analytical tools to optimize how and where ad dollars are placed.

Agency MindShare uses flat fees and sometimes the additional cost of a specialized manager to interpret data. "We're open to more fee-based agreements that reflect the exact scope of services for the advertisers," says Scott Neslund, CEO, MindShare North America. "To do a commission basis like … 20 years ago doesn't make sense."

•Dollars for consumer behavior. Direct-marketing agency Wunderman recently redefined some key measures to assign a dollar ratio to consumer actions, such as what percentage of visitors to a website performed a specified activity, such as requesting more information. "This is very, very meaningful for a client because it shows the value of a series of actions," says Mark Taylor, Wunderman's chief operating officer.

•Performance commission. DraftFCB, created last year by merging direct ad agency Draft and traditional agency FCB, created a variable-pay model based on a marketer's objectives. The agency still reaps a percentage of ad spending but will charge lower commissions in combination with a bonus if the program beats expectations.

"We want to compete the way clients do, which is based on performance measures," says Laurence Boschetto, president and chief operating officer. Real-time results for marketing programs are posted in the office on computer screens known as the "smart wall."

•Premium services. IPG's Marketing Accountability Partnership bills clients an average daily rate akin to consulting fees. Operating the unit independently of the agencies that create ads helps create the perception of objectivity and reduces the inclination for agencies to place ads in more costly media. "One of the key issues with accountability into compensation plans is the client perception of the objectivity of the accountability measures," MAP's Canter says.

Still, the industry hasn't moved as quickly as media has changed, and agencies are reluctant to give up commissions as a business model. And they don't want to be penalized if sales fall short for reasons other than the marketing.

comScore Media Metrix Releases Top 50 Web Rankings for May

Summer Movie Season and Political Interest Boost Traffic to Sites in May

RESTON, VA, June 15, 2007 – comScore Media Metrix today released its monthly analysis of U.S. consumer activity at top online properties for May 2007, which saw traffic increase to movie-related sites as the summer movie season kicked off, political sites with the presidential debates fueling interest, and e-commerce sites as consumers shopped for and purchased Mother’s Day gifts.

“With this year’s impressive lineup of big-money summer blockbusters, it’s no surprise that Americans flocked to movie sites in May,” said Jack Flanagan, executive vice president of comScore Media Metrix. “Whether searching for show-times or reviews, purchasing movie tickets or buying DVDs, the Internet is playing an increasingly significant role in the promulgation of movie information and monetization of the industry.”

Summer Movie Season Kickoff Heats Up Web Traffic in May

The launch of summer movie season saw traffic increase to several movie-related sites over the month. The tickets category gained 12 percent versus April to 40.8 million visitors, buoyed by strong growth at MovieTickets.com (up 55 percent to 5 million visitors) and Fandango.com (up 50 percent to 7 million visitors). The retail movies category experienced a 7-percent increase to 27.6 million visitors, while movie social networking site Flixster.com saw its traffic surge 65 percent to 4.5 million visitors.

Political Sites Get Boost from the Debates

With both Republican and Democratic presidential debates swinging into action, the politics category saw a 17-percent increase to 9 million visitors in May, making it the top-gaining category overall for the month. Traffic to Politico.com, which sponsored the Republican Presidential debate on May 3, jumped 162 percent for the month to 648,000 visitors, while MoveOn.org’s traffic surged 246 percent to 689,000 visitors due in large part to an online petition against gas price increases. Several presidential candidate websites also saw their traffic increase, led by BarackObama.com (up 13 percent to 298,000 visitors) and HillaryClinton.com (up 3 percent to 217,000 visitors).

Remembering Mom Brings Traffic to Gift Websites in May

Whether searching for that perfect gift for Mom or buying it online, Mother’s Day fueled growth in several online retail categories. The flowers, gifts & greetings category saw an 11-percent increase to 35.6 million visitors, led by a 365-percent surge at Trilegiant Corporation sites, which includes 1-800-FLOWERS.com, to 5 million visitors. The jewelry, luxury goods & accessories category rounded out the top ten gaining properties for the month with a 6-percent increase to 16.9 million visitors.

Planning for Summer Vacations Sparks Traffic to Travel Sites

With summer vacation plans looming, travel categories saw an increase in traffic during May. The travel information category grew 7 percent to 42 million visitors, led by Yahoo! Travel with 9.9 million visitors (up 7 percent), TripAdvisor.com with 6.5 million visitors (up 8 percent), and the Travel Ad Network with 6 million visitors (up 23 percent). The car rental category also experienced gains, climbing 6 percent to 6.2 million visitors. The category was led by Avis Budget Group with 2.6 million visitors (up 19 percent), Enterprise.com with 2.4 million visitors (up 9 percent), and Hertz with 1.7 million visitors (up 7 percent).

Top 50 Properties

In May, Yahoo! Sites and Time Warner Network remained in the number one and two positions, respectively. Both Amazon Sites and Ask Network gained one position within the top ten, each attracting more than 50 million visitors in May. ARTISTdirect Network, a group of sites featuring multi-media music content, enjoyed a 13-percent increase in visitors and gained six spots in the ranking, while Yellowpages.com Network increased by 11 percent to secure the number 33 spot. Photobucket.com LLC moved up four positions to number 29, drawing more than 21 million visitors.

Top 50 Ad Focus Ranking

Advertising.com reached 87 percent of Americans online in May, keeping it atop the Ad Focus Ranking. Within the top ten, Yahoo! inched up a spot to number two, and Blue Lithium moved up two positions from number eight. Centro entered the ranking at number 20, reaching 42 percent of the U.S. online population, while Undertone Networks enjoyed a nine spot jump to number 29, more than doubling its reach.

TABLE 1

Top 10 Gaining Properties by Percentage Change in Unique Visitors* May 2007 vs. April 2007 Total U.S. Home, Work and University Internet Users Source: comScore Media Metrix
Property	Apr-07 (000)	May-07 (000)	Percentage Change	Rank by Unique Visitors
Total Internet Population	178,079	177,487	0	N/A
Trilegiant Corporation	1,072	4,978	365	192
Mars, Inc.	2,605	4,575	76	201
MANIATV.COM	2,729	4,590	68	200
FLIXSTER.COM	2,742	4,516	65	204
FANDANGO.COM	4,703	7,041	50	135
TOPTVBYTES.COM	2,971	4,402	48	210
ABC.COM	9,887	14,643	48	54
SNOPES.COM	3,909	5,535	42	172
Glam Media	12,221	17,299	42	42
SLIDE.COM	4,708	6,262	33	155

*Ranking based on the top 250 properties in May 2007

TABLE 2

Top 10 Gaining Categories by Percentage Change in Unique Visitors May 2007 vs. April 2007 Total U.S. Home, Work and University Internet Users Source: comScore Media Metrix
	Apr-07 (000)	May-07 (000)	Percentage Change
Total Internet : Total Audience	178,079	177,487	0
Politics	7,755	9,056	17
Tickets	36,323	40,844	12
Flowers/Gifts/Greetings	32,025	35,625	11
Training and Education	9,462	10,384	10
Retail - Movies	25,704	27,559	7
Classifieds	38,864	41,599	7
Travel - Information	39,524	42,154	7
Car Rental	5,829	6,197	6
Teens	30,071	31,885	6
Jewelry/Luxury Goods/Accessories	15,973	16,867	6

TABLE 3

Top 50 Properties
May 2007
Total U.S. - Home, Work and University Locations
Unique Visitors (000)
Source: comScore Media Metrix
Rank	Property	Unique Visitors (000)		Rank	Property	Unique Visitors (000)
	Total Internet Users	177,487
1	Yahoo! Sites	130,526		26	United Online, Inc	21,430
2	Time Warner Network	122,659		27	Bank of America	21,414
3	Google Sites	120,010		28	CareerBuilder LLC	21,266
4	Microsoft Sites	113,916		29	Photobucket.com LLC	21,168
5	Fox Interactive Media	82,260		30	Superpages.com Network	20,956
6	eBay	79,428		31	CRAIGSLIST.ORG	20,581
7	Amazon Sites	51,567		32	Disney Online	20,127
8	Ask Network	50,068		33	Yellowpages.com Network	19,826
9	Wikipedia Sites	48,743		34	Gannett Sites	19,262
10	New York Times Digital	43,603		35	ARTISTdirect Network	19,168
11	Apple Inc.	41,909		36	Shopzilla.com Sites	19,137
12	Viacom Digital	40,462		37	Travelport	18,973
13	Weather Channel, The	38,496		38	Real.com Network	18,684
14	CNET Networks	30,954		39	Comcast Corporation	17,860
15	Gorilla Nation	29,547		40	WhitePages	17,741
16	Adobe Sites	28,458		41	ESPN	17,572
17	Wal-Mart	27,796		42	Glam Media	17,299
18	AT&T, Inc.	26,975		43	iVillage.com: The Womens Network	17,116
19	FACEBOOK.COM	26,649		44	WebMD Health	16,578
20	Target Corporation	26,013		45	Cox Enterprises Inc.	16,185
21	Expedia Inc	25,212		46	USPS.COM	16,063
22	Monster Worldwide	24,879		47	Weatherbug Property	15,714
23	Verizon Communications Corporation	23,669		48	NBC Universal	15,682
24	CBS Corporation	21,951		49	Ticketmaster	15,382
25	Lycos Sites	21,540		50	Oversee.net Network	15,172

TABLE 4

Ad Focus Ranking
May 2007
Total U.S. - Home, Work and University Locations
Unique Visitors (000)
Source: comScore Media Metrix
Rank	Property	Unique Visitors (000)	Reach %		Rank	Property	Unique Visitors (000)	Reach %
	Total Internet Users	177,487	100%
1	Advertising.com**	155,258	87%		26	Gorilla Nation Media	61,266	35%
2	Yahoo!	129,287	73%		27	Vibrant Media**	56,169	32%
3	ValueClick**	129,034	73%		28	ContextWeb**	54,514	31%
4	Tribal Fusion**	120,987	68%		29	Undertone Networks**	52,811	30%
5	Casale Media Network**	118,593	67%		30	MSN.COM Home Page	50,156	28%
6	Blue Lithium**	116,612	66%		31	Ask Network	50,068	28%
7	Google	113,854	64%		32	EBAY.COM Home Page	46,891	26%
8	AOL Media Network	113,759	64%		33	Interclick**	42,786	24%
9	Connexus - TrafficMarketplace**	104,266	59%		34	YOUTUBE.COM	41,035	23%
10	Specific Media**	100,053	56%		35	Business.com Network	40,576	23%
11	MSN-Windows Live	98,625	56%		36	ABOUT.COM	38,348	22%
12	DRIVEpm**	92,196	52%		37	Real Cities Network	28,885	16%
13	AOL	91,597	52%		38	WEATHER.COM	28,445	16%
14	YAHOO.COM Home Page	90,974	51%		39	FACEBOOK.COM	26,649	15%
15	24/7 Real Media**	87,406	49%		40	Nickelodeon Kids & Family	22,974	13%
16	adconion media group**	81,119	46%		41	CareerBuilder Network	22,178	12%
17	PrecisionClick**	80,311	45%		42	CNN	21,657	12%
18	Tremor Media	76,932	43%		43	IMDB.COM	21,465	12%
19	CPX Interactive**	76,822	43%		44	Superpages.com Network	20,956	12%
20	Centro	75,307	42%		45	Lycos Network	20,737	12%
21	Burst Media**	71,864	40%		46	Disney Online	20,127	11%
22	EBAY.COM	71,508	40%		47	PHOTOBUCKET.COM	20,068	11%
23	AdBrite**	69,390	39%		48	Yellowpages.com Network	19,826	11%
24	MYSPACE.COM	68,939	39%		49	ARTISTdirect Network	19,168	11%
25	AdDynamix.com**	64,530	36%		50	WhitePages Network	17,702	10%