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Making Measurement Make Sense

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I was one of those early digital evangelists, intent on changing the media world, who told all those advertisers and agencies who would listen that not only could we tell them how many people saw their ads (online), but we could even tell them how many had clicked on them. It was called a click through rate, also known as CTR thanks to our industry’s love of three letter acronyms (TLAs).

Forward to recent times and we have endured almost two decades of taunting by other media, by planners, buyers and most importantly by advertisers, the very people we set out to influence, help and ‘enlighten’. We’re known as most measured medium, rather than the most measurable medium.

But today, the Australian online advertising industry is close to becoming the first market in the world to publicly release an industry-body endorsed ‘hybrid’ online audience methodology that will likely be the forerunner for how online audience measurement develops in other markets.

So, how did we get here, what’s new and what’s next?

It became clear from numerous interviews and interactions with agencies, planners, advertisers and even other media that the single biggest barrier to increased investment in online advertising, especially general display advertising, was the lack of a standardised, credible audience measurement system.

Online had the CTR and that was hovering at an average of less than 0.1 percent the world over. We also had Unique Browsers, or UBs, a misleading and deceptive metric that those of us at the coal face wanted to believe equalled one human being, but it never really did.

Nielsen was measuring 115 million Australian UBs in the month of March 2011 which was not bad for a nation of 22 million people. 17 million were supposedly online and 14 million online in any 30 day period. Yes, this meant that on average, Australians online were either deleting their cookies or using multiple browsers and devices to the point of being counted almost five times for every actual person.

Throughout this time, online advertising was exploding in growth. It was the veritable adolescent child: young, immature, brash, full of attitude, and prone to periodic growth spurts. Passing through the two billion dollar a year mark in 2010 and reaching two and a half billion dollars in 2011, online is, and has been, the fastest growing advertising medium in Australia almost every year since its inception back around 1995.

Today, online is growing at between 16-20 percent per annum and is forecast to exceed four billion dollars in 2014 when it will surpass TV and print to become the number one advertising medium by volume and share.

So, with the credibility of UBs on the line, an exploding growth trajectory showing no signs of slowing down and an industry set to become the leading advertising medium of advertisers’ choice in the next three years, we (the industry) had to do something to address the confidence levels in online audience measurement.

Advertisers and agencies had decades of planning, buying and measuring their media advertising campaigns by reach and frequency, Target Audience Ratings Points (TARPs), circulation and readership and other more well established and easy to understand metrics. They couldn’t compare any of the online metrics to their more trusted and familiar metrics across other media they were using. It was clearly time to find a comparable online audience measurement system.

In September 2010 the IAB Australia Measurement Council (MC), together with the Media Federation of Australia and supported by the Australian Association of National Advertisers (AANA) published a tender seeking proposals from suppliers to address the needs of the industry now and in the coming years. In May 2011 Nielsen was announced as the winner of the tender, after their methodology was submitted to the Technical Review Group (TRG) and identified as best meeting the technical evaluation criteria. After final approval by the IAB Australia Board of Directors, supported by the MFA and AANA, Nielsen was given the sole and exclusive opportunity to attain a preferred supplier status endorsed by IAB Australia.

It’s important to clarify that online measurement comes in three ‘buckets’ – web analytics, advertising effectiveness measurement and finally audience measurement. The preferred supplier status relates only to the later - the planning, buying and measurement of online audiences.

Nielsen’s methodology, called Nielsen Online Ratings, or NOR, combines the best features of server-based and panel-based measurement into a ‘hybrid’ methodology that results in a true, people-based measurement metric, called Unique Audience, or UA. It enables reach and frequency (R&F) planning and measurement of online advertising campaigns that can be directly compared with R&F from other media, eg TV and print. Further, if the data from NOR is used within certain planning tools such as Nielsen’s own Consumer and Media View (formerly known as Panorama), de-duplicated reach and frequency across multiple media can be planned.

This means advertisers and agencies will be able to compare like with like when considering online and offline media advertising campaigns. It’s a great result for everyone, yet it’s not the end of the process.

Online video advertising is exploding and arguably offers traditional TV advertisers an unprecedented opportunity for incremental reach, higher frequencies and lower effective costs per thousand than TV on its own. To this extent, NOR will in early 2012 measure online video audiences in their own right and again using appropriate tools, offer true comparison to TV audiences.

Similarly, mobile online access is forecast by Morgan Stanley forecasts to exceed fixed internet access (desktop or laptop) by 2014 globally. With the proliferation of mobile devices in Australia and increasing online access from so-called smartphones and tablets, consumer behaviour and technology will again driving the online audience measurement agenda. So the industry is already discussing how to define the requirements and seek effective measurement solutions.

The credibility of online audience measurement methodology, along with the accuracy of the data and the standardisation of metrics, is essential to the continued growth of the online advertising industry. As advertisers increase their investment in online advertising, often shifting significant budgets away from TV, print and other media to do so, we must continue to offer all stakeholders, publishers, networks, planners, buyers, and most importantly the advertisers, online audience measurement data on which they can make sound business decisions.

The industry is moving at breakneck speed and constantly evolving, so we’ll continue to work closely with all the stakeholders and vendor partners including Nielsen, to meet their ever changing needs.

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