Internet's Holy Grail in sight: Numbers to please ad buyers

By Published on .

The Internet was once famously called the most measurable of all media. Now, it's about to be plunged into the world of traditional media planning, where reach and frequency are the metrics of choice and little is precise.

Researchers, online ad serving companies and operations that sell media planning software to agencies are racing to offer reach and frequency planning tools for the Internet. The end result: For the first time ever, media planners will have workable tools to compare the Internet to TV, radio and magazines.

"If we want to grow the Internet as [an ad] medium, we have to figure out a way for advertisers to understand the medium," says Tom Sperry, president of ad serving company Atlas DMT. "We never created a language advertisers could understand."

Being able to easily compare Internet and offline ad metrics is a development that could have huge implications for the future of online advertising, where in 2001 the nation's 100 Leading National Advertisers spent just 0.7% of their total measured ad dollars, according to Advertising Age.

In mid-July, the industry took a step forward when the Association of American Advertising Agencies and Association of National Advertisers announced Advertising Digital Identification. Ad-ID will assign ads across every medium a specific computer code to facilitate cross-media buys.


Buying ads online is tricky and time consuming. Plans are built not by predicting reach and frequency, but by analyzing how previous online campaigns have performed along with demographic data on various sites from researchers like Nielsen/NetRatings. Tools to play "what if" and compare the effectiveness of ad buys at different sites are rudimentary at best. In traditional media, such tools are the currency of the business.

Comparing the efficiency of the Internet to other media is practically impossible. Media-planning software company Telmar has offered an Internet planning tool, but company President Stan Federman admits that few clients have ever used it.

The main issue is that the common ad unit of Internet advertising is still the impression, and that term doesn't mean anything to traditional buyers. "Marketers have shown by their actions the past six years," says Jim Nail, Forrester Research senior analyst, "that unless they have comparability, they're not going to spend money [on online advertising], period."

Now, Internet backers are beating the drum to get traditional advertisers to spend more of their ad budgets online. They believe reach and frequency tools are one way to do it.

"If I want to make a big noise on the Internet, I don't know how loud I have to shout," says Doug Weaver, president of Upstream Group, which provides ad sales training to online publishers. "If I say I'm going to spend $2 million and I throw those pebbles in the ocean, did I make a huge impact or did I reach half of 1% of the audience? We don't know."

As with past efforts to develop Internet measurement standards, there's a lot of jockeying for position. The Advertising Research Foundation in March declared that the most accurate reach and frequency tools should include data from both syndicated research providers (such as comScore Networks) and ad serving companies (such as DoubleClick). All sides realize the endgame is to include data on Web media properties in cross-media planning tools from companies like Interactive Market Systems and Telmar, which offer software to help media planners build ad schedules. That's leading to alliances. NetRatings has a deal with IMS, DoubleClick is negotiating a partnership with NetRatings, and Telmar says it's working with comScore, Atlas DMT and NetRatings (see chart at left).


It's a stew of activity that media buyers and marketers are watching closely. Integrated ad buys are growing in popularity, and a reach/frequency tool for the Internet could help make them easier.

"If we can put [such a tool] on the planner's desktop, it becomes possible for the general planner to make a dollar allocation and put together a plan ... without ever talking to an Internet specialist," says Lynn Bolger, CEO of FastBridge, New York, the online media division of Interpublic Group of Cos.' Initiative Media.

That could mean an increase in Internet advertising, says Carole Walker, director of e-communications advertising and strategy for Kraft Foods' e-commerce group. "At this point, most traditional planners do not understand the Internet and they don't feel their dollars will be as well spent," she says.

But there's a risk, too. Some agency buyers feel that in an apples-to-apples comparison, the Internet could come up short.

"If anything, what a lot of this reach/frequency stuff is going to show is that it's a lot more difficult to build reach, to build significant reach, and to maintain those reach levels over time online," says Christian Kugel, associate director of insights and analytics at Starcom IP, Chicago, a division of Bcom3 Group. Many sites have a strong base of loyal visitors, but that also means that those loyal visitors will consume a majority of the ad inventory, simply by virtue of the fact that they visit the site so often.

He brings up a concern shared by others: By bringing reach and frequency to the Internet, "we're just talking about applying offline metrics to online advertising. That in and of itself isn't valuable to me," he says.

But if it's valuable to advertisers, that's when things get a lot more interesting.

Most Popular
In this article: