Nielsen Investment Ratings

EARLIER THIS YEAR Alan Segal, a creative director at ad agency Saatchi & Saatchi, wanted to know how much business his client, Toyota, was getting off its Web site. The Web site reported 7,000 “page views,” which meant Toyota’s cost of running advertising was 19 cents per view. That seemed too high to Segal, so he complained to the site.

The next month, the number of reported “views” miraculously doubled, basically halving Segal’s per-viewer ad costs. “We decided we needed a third party tracking viewers,” he says.
Only 900 Web sites (out of 400,000 total) carry advertising, and they’re chasing $300 million worth—small change when compared to the more than $45 billion spent last year on television ads. But in the next four years, ad spending on the net could mushroom to $5 billion.
Standing in the way of that growth has been the lack of a credible way to measure what advertisers are getting.
Cost per thousand views ranges from about $9 to over $150. Some of that variation is due to different demographics—some Web sites cater to specific high-income groups while others seek out broader audiences. But much of the cost-per-thousand gap is due to sheer confusion: How can you reliably measure how many people notice your message? International Business Machines and Procter & Gamble, two of the world’s biggest advertisers, say they won’t advertise on any site that isn’t audited by a third party.
Such auditing is thus the next logical step in the evolution of the new advertising vehicle. The traditional advertising media already have such a service. In radio, it’s Arbitron. Magazines and newspapers have the Audit Bureau of Circulations. TV utilizes ratings provided by NielsenMedia Research, whose parent company last year raked in revenues of $1.5 billion.
Who will provide the Nielsen ratings of the Net? Not surprisingly, Nielsen wants to. Last year it bought an estimated 10% stake in a San Francisco, Calif. outfit called Internet Profiles or I/Pro, which polls the most popular Web sites and tallies the sites’ raw data of views every month.

The Nielsen name gave I/Pro instant credibility, which translated into market share. It now measures viewing activity on close to 85% of the most-visited sites. Among its clients are sites such as Netscape and search engines Yahoo and Infoseek.

But the contest isn’t over. I/Pro relies on the sites themselves to provide the raw data. So it is not really a third-party reporter. It is very easy to fake hits on the Web. Any Web operator, for instance, can easily rig up a robot program to visit the site from elsewhere on the Web, generating thousands of fictitious hits. Critics say I/Pro may be a third party, but its tallies aren’t necessarily any more reliable. “A lot of people are looking for a better mousetrap,” says Fred Axelrod, an analyst with Western Media, North America’s largest media buying organization.
The better mousetrap may be NetCount, founded by 29-year-old Paul Grand and run out of a basement at the grungy corner of Hollywood and Vine in Los Angeles.
Grand was designing Web sites for Hollywood studios, but his struggle for reluctant advertising dollars convinced him that the real opportunity lay in measuring the number of people hitting his sites. So he developed software that could be installed onto Web sites to count views independently of the operator.
Grand’s software monitors all the activity on the Web site and relays it back to high-powered computers in NetCount’s offices. So there is no opportunity to fudge numbers, and NetCount gets a head start on processing the data. Netcount distributes its ratings to clients daily via computer, instead of monthly by mail as I/Pro does.” I know I/Pro has a lead, but I also know it’s surmountable,” says Grand.
NetCount will do more than just log viewers. Grand plans a service that provides demographic data on the viewers behind the hits. It learns what sites the viewer has been to and where he goes from there.

“I’m astounded at the amount of information we are gathering,” says Saatchi’s Segal, who says NetCount picked out particularly high viewership on the Toyota site through America Online. Toyota is now developing ways to reach those users. Grand has also signed clients like Lycos and MSNBC.
For its part, I/Pro mocks NetCount. “It’s like Apple saying it has targeted Intel,” says Mark Ashida, I/Pro’s chief executive. Maybe, but remember what the Bible saith about pride going before a fall.