• by June 15, 2001

Down For The Count

In a recent article in CNET News.com, writers Sandeep Junnarkar and Jim Hu conclude that the number of visitors to a site will remain a vital statistic for media buyers. Such measurements are a necessary starting point, justifying the higher fees charged by brand-name sites. While traditional advertising is to create a positive image and reinforce a brand's recognition, clicking on banner advertisements and providing personal information in direct-marketing questionnaires became the gauge of an Internet ad campaign's success.

Marty Yudkovitz, president of interactive media at NBC, said "There was the assumption that if we gather enough people on the Internet service, we'll find a way to monetize it.” The article goes on to say, however, that Yudkovitz fell prey to the seduction of Web traffic, seeing it as the key to success in commercial cyberspace. The universal acceptance of raw visitor numbers as the Internet's unofficial currency may go down as one of the greatest fallacies in modern business history.

The most common criticisms of traffic measurement have to do with their limited panel sizes and the lack of data about people who use the Web from work. Site visits from the workplace are underreported. Media Metrix extrapolates overall Web usage from the surfing patterns of 100,000 people from home groups. PC Data draws its conclusions from 120,000 people using the Net, while Nielsen tracks 220,000 people worldwide, 70,000 of whom reside in the United States. All panels are monitored using software installed on their computers, but Media Metrix is the only one to watch other services.

It took an economic meltdown for the industry to acknowledge the questionable logic in measuring entire industries by hit counts alone. Today, facing a slowdown in advertising, Internet companies are searching for new ways to make money. But ads remain their primary source of revenue. David Vogler, creative officer of Mutation Labs, remains optimistic that the online advertising and commerce business will eventually find its way, having seen a similar evolution in television. "The Nielsens may not be completely accurate or scientific, but they're the gold standard that everyone has agreed to follow," said Vogler.

The whole story can be found here

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