Head Count: Can we quantify enough to make web ads work?

I saw the next-generation computer flight simulation game this week: You boot it up, it says "Welcome to LaGuardia Airport" and nothing else happens for 45 minutes
-- Marty Yudkovitz, president of NBC Interactive Media

Everyone this week seems to be counting heads. Peter H. Lewis' story in yesterday's NY Times chronicled the debate between Donna Hoffman, a business professor at Vanderbilt University, and Nielsen & Co. over how many people really are "on" the Internet. The range in these numbers (16 to 22 million) is nothing new to old net-heads, but it is fun to watch. Quick test of Nielsen's methods: call four random neighbors and ask them if they are sure if their computer has a modem.

Web ad spending will reach a $300 million business by the end of the year, according to one source. Others put 1995's figure at $54 million. That's a lot of money being thrown around putting up clever buttons and banners.

Advertising is not my area of expertise. Nevertheless, having worked for many trade magazine publishers and hung around enough sales reps and media planners, I have a basic understanding of what is going on. And what I have found with web ads is this: Everyone is Clueless.

Imagine this scenario: you are a magazine publisher. You charge a high cost per thousand impressions (that's CPM, back when the metric system was king) so that people think you have well-heeled readers. You do some focus groups that show that people read and remember the ads in your magazine from cover to cover. You do some other analyses that show that your readers buy more stuff than the competition, and moreover, influence other buyers of more stuff.

All well and good so far. But there are a few complicating factors: You don't know the addresses of your subscribers and have limited demographic information -- people lie on surveys and moreover, lie in unpredictable ways. In fact, your readers misrepresent themselves big-time. You can't even be sure if they tell the truth about their sex, location of their residence, or even the nature of their employers. Second, someone at the printing plant screwed up and you don't even know how many issues were printed. Third, many newsstands didn't distribute your issue, because they were closed for random holidays that you knew nothing about. And fourth, readers have passed along your magazine in their own distribution network and you don't know how, why, or how many are doing this. Finally, many libraries carry your magazine, but they tear out the ads before putting them on the shelves.

That is about where we are with web-based publishing. Advertisers are going nuts trying to bring some sense of order to this. And good for them: I welcome a day when we can keep track and count heads as well as we can in the print world (which, to be honest, isn't all that great to begin with).

Counting heads on the web is fraught with many problems. I'll give you a few examples. First off, all hits are treated equally by some vendors (such as NetGravity, who offers a AdServer that keeps track of which ads are placed on which web sites). This means that a hit by Lycos or Altavista or My Own Search Engine scanning a site is the same as a real human clicking on a page. Now, I read my own access logs and I can tell you that dec.com isn't the second most popular domain coming into my site just because I've managed to find a lot of interested parties over in Maynard, Mass. Other vendors, such as I/Pro, filter out these hits.

Next, you want to be able to target your advertising to the right people: but since all you have is an IP address, targeting is tough to do. Doubleclick.net looks like they have something here: they have developed some routines to discover as much demographic information about you from your domain name, from what you visit on certain sites, and from whatever they can find out about you via above- board net-intrinsic methods. However, if you arrive from aol.com or another online service, they can't do much analysis.

Targeting is important: any advertiser can tell you that. But what makes the web hard to grok is that there is no predictable "premium position" (in the print trade, certain pages in the magazine are read by more people: the covers, opposite certain editorial sections, and so forth). This is because people navigate web sites in different ways, and enter and leave them almost at random.

The trick is being able to match your ad with the right kind of editorial content. So an ad for Netscape's servers, for example, would draw better when it is placed near a story having to do with web servers. (Web Review e-zine found a three-fold improvement when they moved Netscape's ad to a "better" spot.)

Plus, there is no current relationship between what a site charges and what they deliver. Consider search sites such as Yahoo, InfoSeek and Lycos. They sold over $3.5 million in ads in 4Q95, according to WebTrack. Yet, search sites are for transients: I want to get in, get my list of URLs that match my search, and get out.

Third are proxy servers. These cache pages already visited so that you can get to them quickly. But a page on a proxy is a page uncounted for, thus understating the overall results. And finally there are plenty of people who browse the web from terminals or who turn off their images, so they don't see any ads.

To try to fix all of this, web ad buyers speak of an "ad click rate" -- this is a fraction with the numerator as the number of times a user clicks on a particular ad on a particular web page, and the denominator the total number of ads delivered or downloaded by all users visiting that page. (c|net calls the latter number CAD for confirmed ads delivered.) It is some indication of the popularity of the ad -- if users don't click on the ad button, then they don't go see the ad on Nissan's or whomever's web site. Click rates above ten percent are pretty amazing, and so far most web sites that run ads are happy to get above five percent rates.

Okay. So now trying explaining to the web ad buyer about proxy server undercounting, search engine overcounting, and the fact that people can make up anything and everything about themselves on the web: on the web, no one knows that you are even a carbon-based life form, let alone a dog. And what you have is a real mess. Everyone, including this writer, is Clueless.

Awards, promotions, and sitekeeping dep't

The bad news this week: a Web.Foot award for the biggest blunder in cyberspace has to go to the Marriott Marquis hotel crew. The Interactive Marketing show, held there (it ends today) was supposed to have a T-1 line from BBN connected to their show floor. Well, it wasn't working by mid-day yesterday, to the concern of many vendors who bought booths with the expectation that they'd have lots of bandwidth. What if you gave an Interactive.* show and the Internet didn't come? How about finding a New York hotel that already has its telecom act together? See WI#13 about the Boston Marriott Copley link to the Internet.

Speaking of the Interactive Marketing show, one resource I found there is Webtrack's own monthly newsletter called InterAd, one of the better things written about advertising and the Internet. If you drop editor James Kennedy an email with your postal address and mention you heard about it here, you'll get a sample copy and can decide whether it is worth the $199 (online) or $299 (paper) annual fee.

I recently wrote an op/ed piece for Computerworld, entitled Telcos Dial 0 as Internet Providers. Maybe Nynex will change their latest print ads: "We've got 30 offices with 30 different LANs in 20 different configurations from 7 different vendors. Tying them all together was one giant headache. But we feel better. Nynex sent us Dave."

Finally, I'll be online next Thursday afternoon at 4 pm eastern, chatting about my upcoming article in Windows Sources magazine on high-speed Internet access (I believe it is their June issue). If you want to participate, you need to download the IRC client software from ZDnet's site here.

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David Strom
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