How Will Nielsen Fare in a Quintopoly?

In TV land Nielsen has long been a monopoly. Handwritten diaries and small sample sizes have driven $65B in annual spending for years but that is not how it's going to play out online.

What's amazing is that it won't even be a lowly duopoly between Nielsen and comScore. These two appear to be content fighting it out with each other when the reality is that newcomers Hitwise, Compete, and Quantcast are developing some incredibly robust and impressive intelligence to provide advertisers with larger samples and click stream-driven intelligence. While the original players certainly will have their spin on why these new companies' data isn't up to par one thing is certain: click stream data beats panel data hands down all day long.

The ability to view upstream and downstream "other sites visited" is good, but I'm guessing that these companies will provide site by site data that measures the audience visitation disparity between an advertiser's products and its competitors. A web site scores high for your competitor's customers but not yours? Fertile ground and well worth the premium CPM.

Calling this a quintopoly might not even be fair. Industry-specific data providers like JD Power and primary research firms like Gartner are also creating data models which will be valuable to advertisers. The fact is, competition breeds innovation and excellence and getting great consumer data is one area that online has an insurmountable lead over its offline counterparts.

The Fear Of Not Spending Enough In Search

In which industry is 25.4% fraudulence acceptable? In search, that's where! This recent gem from MarketingVox notes that click fraud rose 15% in Q2 despite Yahoo and Google suggesting click fraud is much lower.

Can you imagine if your newspaper rep came in and told you their circulation counts were accurate to +/- 25.4%? What if DoubleClick or Atlas noted in their presentations that their impression counts were accurate to +/- 25.4%? It wouldn't fly, but search is different.

The reason for this is that when consumers are actively searching to find your product online you have no choice but to advertise there. One way of looking at this is simply to say, "OK, rather than think of 25.4% being fraud, we'll assume that our real clicks are just costing us 34% more." (The inverse of 25.4%.) The problem is that search click costs are already sky high! Anyone out there paying $3, $5, or even $10 per click? Most all of you are, and the reason is that it's scary not to be there.

But what if instead of spending $5/click, you could spend $1.67/click, getting 3 clicks for your $5 rather than one? And what if you could do this by catching consumers before they even knew they wanted to search for your product? The good news is that this is totally possible. CPC banner campaigns have their weaknesses, but when it comes to doing business on the web, banners can often perform significantly better than a search campaign ever will. Overcoming 3:1 odds is not easy.

In the end, advertisers need to establish goals and set their criteria for what will make their campaign successful. The likely outcome will be a blend of both SEM and display. So long as the advertiser realizes that a successful SEM campaign doesn't require being the top listing in every instance of every keyword on its list, and simultaneously that home page takeovers on major portals isn't the only way to do online display, both can co-exist and be profitable to the advertiser.

Vastly Different Reactions To Political Online

With advertisers jumping online faster than ever, publishers, portals, and ad networks are taking two distinct paths in how they're treating political campaigns. With the 2008 Presidential race heating up, D.C. is getting online more than in any other election in history. Publishers have figured this out. Some are playing straight and fair and others are trying to earn the highest margins possible - even if it hurts them long term.

Upon receiving the RFP for a Presidential candidate, some publishers change their tune quickly. The publishers' "political specialists" get involved, "rate integrity" and "dynamic pricing" (code for keeping prices high) becomes a priority, and inventory availability suddenly shrinks. The publishers contend that inventory for these campaigns is limited and all candidates must be treated equally. Unlike TV, that's not the case online.

Every online impression is different. Not just based on the page on which it appears or its location on the page, but its place within a user session and the behavior of the user to which it's served make every impression different. So, two impressions on a publisher's main news page are not equal. The fact that publishers haven't figured out how to monetize each impression differently causes logic to go out the window and makes elevated, fixed pricing the "equalizer."

Online in 2008 has the potential to be what 1956 was for TV. Unfortunately some publishers and even some ad networks are worried more about how much higher their margins can be rather than how they can help each campaign achieve its goals. The great news is that there are some exceptions.

Some portals, publishers and ad networks have jumped at the chance to be involved with 2008 campaigns and granted the same rates we pay for our commercial and private sector clients to political and advocacy campaigns. As Washington learns more about online and discovers the many different ways in which it can be bought it will quickly learn who was fair with them early on and who was not. So, congratulations to those who are doing it right. You will win out in the long run, and you might just elevate the entire industry at the same time.