Economic Fears Drag Down Online Sales
NEW YORK: Despite growth of 25% in 2007 to $20 billion (€13.92bn; £9.92bn), internet advertising would have fared even better had marketers been able to access reliable and consistent audience measurement data.
Traditional media such as TV, radio and print each has its own universally recognized measurement provider: respectively The Nielsen Company, Arbitron and the Audit Bureau of Circulations.
But no such single standard exists for web ads. As Nielsen Online president of global services Manish Bhatia puts it: "It's a problem of plenty."
While for the marketers' lobby, Steve Wadsworth, president of The Walt Disney Company's internet group observes: "This industry looks like it can't get out of its own way.
"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."
Meantime, industry politics are in play.
The Interactive Advertising Bureau, representing over three hundred web publishers, wants Nielsen Online and comScore Media Metrix to undergo audits by the Media Rating Council, a foot-dragging process.
The former duo rely solely on panel data for their measurement methodology, while relative newcomer Quantcast melds panel with web-based data to produce ratings.
Believes Dave Hallerman at researcher eMarketer: "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."
Meantime, web publishers need to offer advertisers a reliable basis for comparison. Says Jim Spanfeller, president/ceo of Forbes.com: "Advertisers want to be able to understand that their online spend got this reach, and their offline spend got that reach."
IAB ceo Randall Rothenberg concurs: "Marketers want to know: 'If I take $10 out of TV and put it into online, am I getting $10-plus back'?"
Internet researcher comScore reports that online sales from November 1 through December 14 rose 18% year-on-year to $22.67 billion.
Bonny growth by any standard other than online, which last year hit a 26% growth rate and forecast a 20% uplift for the current holiday season.
ComScore chairman Gian Fulgoni believes that recession-conscious consumers now "pick their spots, and are waiting for the deals ... I think it is possible that they are procrastinating longer than a year ago."
Data sourced from Associated Press and Business Week; additional content by WARC staff