Nielsen ratings



HOW to COUNT EYEBALLS


The race to develop the “Neilsen ratings” of the Internet!


By :JOHNNIE L. ROBERTS

NEWSWEEK Magazine


F OR 55 YEARS NOW ----THE “COUCH P0TATO” HAS BELONGED TO NIELSEN MEDIA RESEARCH, the company that meticulously catalogs TV viewing habits for the benefit of advertisers that want to sell suds to the spuds.


But new “couch potatoes” are now waddling to their computers to consume entertainment on-line—and in cyberland, Nielsen doesn’t dominate the business of counting eye-balls. “There’s close to 100 companies battling it out to become the Nielsen of the Web, says Josh James, CEO of Omniture, one of the very top Internet-measurement firms . “We see competitors all over the place.”


Begun the Web Ratings War has,” as the potato-shaped Yoda might say.

In the TV Ratings War, in which networks battle for the most viewers, Nielsen holds a monopoly as the official scorekeeper. But on the Web, Nielsen is right there in the trenches, fighting toes with names like comScore and Hitwise, which measure the number of ~‘unique visitors,” or “Uvs,” to a given Website.


Nielsen, of course, has no intention of surrendering to relative up starts: its parent company, VNU Group, offered $227 million last month (October 2006) to buy the 40 percent of Net-Ratings it doesn’t already hold. Expect the competition to grow fiercer as online video draws in more and more UV5.


Why the fuss over collecting data on which sites you visit, how long you stay and what you do during your visits?


The simple answer: data equal dollars.


 As in television, where Nielsen ratings are a key measure for setting the price and placement of commercials, UV numbers are used to help determine Web advertis-ing rates and positioning . But the importance of the data goes beyond that. “What is very significant is the value of the audience: what do they do online, what purchases do they make, what bills do they pay?” says Magid Abraham, CEO of comScore. Such information is used by a whole host of people, from website publishers, to on-line retailers like Amazon.com, to media companies that provide Web “content, to venture capitalists looking for the next MySpaee. “When we begin to look at Internet data] as R&D, we’re going to have a much better sense of what in our content is appealing to audiences;’ says Quincy Smith, the recently appointed president of CBS Interactive, which acquires data and analytical tools from numerous companies.


There’s a ton of data to be extracted from Internet use. “The promise of the Web is that you can track everything” says Omniture’s James. Omniture specializes in providing website operators with real-time data—for a fee—on the number of Uvs who visit a site, the pages they view and the ads they click on, among other things.


But it’s unable to capture any demographic details on visitors, or to provide its clients with comparable information from competitors’ Web sites. That’s the new domain of Nielsen’s NetRatings and comScore, among others, which collect data from diverse panels of Web surfers who’ve installed software on their computers that tracks their Internet use. ‘The makeup of the panels, in theory, mirrors the universe of Internet users, which allows the firms to extrapolate from the data they capture.


In short, this is the Internet equivalent of the Nielsen ratings, with NetRatings and comScore putting out monthly rankings of the most-visited Web sites, most- streamed videos and such.


Each of the major measuring firms is eager to point out its rivals’ flaws. Omniture’s measures are based on technology that counts computers, not people —an approach that can lead to double-counting of Uvs (for example, when the same user contacts a Web site from work and then from home). On the other hand, since panel data by definition are extrapolations, the counts produced by Net-Ratings and comScore can be substantially off, website publishers say. “Where you get into craziness is taking 10 different numbers and trying to figure out which is correct,”  says Peter Daboll, Yahoo’s chief insight officer. “What we’re looking for is consistency within each vendor.” Industry groups like the Interactive Advertising Council and the Media Research Council have been agressively trying to establish measurement guidelines. As in counting each couch potato, totaling up Uvs will require wanna-be-Nielsens in cyberspace to keep an eye peeled for the details.


SOURCE:

NEWSWEEK Magazine

November 27, 2006 (Pg. 42)



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