• by Jonathan Blum , November 29, 2005

Maybe the Nielsens weren't so bad after all.

Online media pundits are probably looking back on the old data monopolies like Nielsen and Arbitron with some nostalgia: They provided the single standard for their respective medium, enforced their will, and offered a clear picture of success or failure.

No more. Now several firms compete to offer different kinds of data, each with its own value. The figures are often decent, but they can be tough to keep straight. The complexity will only deepen as evolving media platforms like wireless, video-on-demand, word-of-mouth, product placement, blogs, podcasts, and advergaming increasingly figure into the measurement mix.

"We are all about building the back-end to handle every input possible," says Peter Weedfeld, senior vice president, Consumer Electronics & North America Corporate Marketing for Samsung Electronics America. "The agencies are nothing to us if they can't do that."

Success with such big science -- from a measurement perspective, anyway -- depends on understanding each technology, harnessing it, and then using it properly for quantifying a particular message. OMMA provides five key principles to understanding the strange new world of emerging online measurement.

Rule #1

The carrier is the 800-pound gorilla of wireless data

What is wireless advertising data supposed to measure?

Every call, text message, game, audio/video clip, podcast, or image from any cell phone, any place in the world.

What does it really measure?

No one has any idea yet.

Wireless advertising is now mostly limited to text and voice mail, with carriers like Verizon and Cingular flatly denying that third-party rich media ads will be allowed.

But those close to the industry have a different message. Tom Burgess, chief executive officer at Third Screen Media, whose company is developing products for wireless advertising, says wireless providers will open their networks to ads. "I can say they are all taking a very serious look at it," he says.

What's the good news?

It's a phone, silly. For phones to work, they have to know who uses them. Therefore, wireless carriers will recognize exactly who is doing what and where they are, so online bugaboos like dynamic Internet Protocol addressing and cookies will be less of an issue.

And the bad news?

Carriers may take a dim view of advertising experts telling them what they already know. Telecom and wireless companies have been dealing with targeted marketing for decades; they know about data-centric transactions and how to manage subscribers. As a matter of fact, they consider their subscribers their subscribers, so advertisers should expect them to bring their own practices to the online world.

Advertisers should anticipate bumping into carriers over everything from caching and content issues to standards and regulatory problems. "There are a new set of influencers in this market," says Harry Wong, senior analyst at Parks Associates, a research company with online practices.

The bottom line: They don't call them "Bellheads" for nothing. Learning to love the telecom companies will be profitable, but not easy. Advertisers can expect more pressure on issues such as pricing, transparency, and standards. Best practices will need to emerge quickly.

Rule #2

Word-of-mouth will be like measuring the unmeasurable

What is word-of-mouth supposed to measure?

Every mention in every blog, swapped file, or Web site about every product and service under the sun.

What does it really measure?

That and more, but making sense of it will be another matter altogether.

What's the good news?

Great data. If early work in the word-of-mouth measurement space is any indication, the area will become one of the richest sources of media preferences. Look for dedicated communities and consumers who do the marketing for advertisers. Consumers will increasingly offer personal information in exchange for rewards.

And the bad news? Where do we start? For one: What constitutes a "hit"? On the Web, a hit is a clear moment recorded on a server. It's another story when it comes to word-of-mouth or peer-to-peer networks. Does a keyword on a blog count as a hit? Or a title in a shared file, or just the file itself? Or a mention in a file being swapped? How about the lyrics in a song? Or music in a banner ad?

Also, if we believe the adage that there's no such thing as bad pr, we have to count all mentions, even those that aren't positive. But getting a clear image of what's trending with blogs or shared material will be tough.

The best example so far was when Apple launched the iPod Nano portable media player and the Rokr phone with iTunes built in. Both were terrific word-of-mouth hits, but the Nano was well-received and the Rokr wasn't. Telling them apart mathematically will be challenging.

Also, there's no beating sex -- meaning that no matter what your clients make or do, the term "sex," "mpeg," "music," and "games" are going to be more popular. Developing accurate mathematical controls for term usage will be a major hurdle.

Most damaging of all, the backlash from the criminalization of Napster lingers. Consequently the data for peer-to-peer file-sharing and swapping via software such as BitTorrent is sketchy, and crucial behavioral data just doesn't exist, so advertisers are at a disadvantage. Still, check out what the likes of BuzzMetrics, BigChampagne, and Mashboxx are doing with market data in spite of the challenges.

"Word-of-mouth advertising requires a high touch to a soft science," says Eric Garland CEO of BigChampagne, an online media measurement firm. "It's like the blind man feeling the elephant."

The bottom line: If you want another reason to question the blind policing of content in the name of the content holder's benefit, look here. Without marketing information, word-of-mouth marketing will probably default into a mass-branding medium closer to TV or radio. General usage metrics will be trackable, but minute measurement will be difficult.

Rule #3

With video-on-demand, online meets offline.

What's video-on-demand (VOD) supposed to measure? The asset-by-asset consumption of linear entertainment, music, or video.

What does it really measure?

Probably just that.

What's the good news?

The TV industry seems to have done right by VOD. There appears to be a statistical transition to VOD with networks, content providers, and advertisers on track to meld new online metrics with the old ones.

What's the bad news?

Forget closed pricing. Cable operators, satellite companies, and technology enablers for on-demand services are going to want their cut of the action. Hence, a new player will emerge between the advertiser and the broadcaster or publisher that will force more transparency into pricing.

Though many claim such open pricing is far from ready for primetime, it's anticipated that price-setting for VOD assets will no longer be done in private agreements between media buyers and networks. Instead, on-demand price setting will resemble pricing on commodities markets, with open bid and ask quotes. The argument is that open pricing will be the only way to provide the liquidity required to sell on-demand media.

Commodity-like pricing is already happening. Just look at the money Google makes from the open bidding of search terms. Also see what upstarts like Right Media are doing.

"As soon as the clients ask for it, A.C. Nielsen and NetRatings should be able to develop meaningful numbers," says Manish Bhatia, senior vice president, Nielsen NetRatings.

The bottom line: VOD's real legacy may not be blowing away the 30-second TV spot, but trashing the traditional process of buying and selling that spot.

Rule #4

Advergaming will offer the data motherlode.

What's advergaming supposed to measure?

Not only user impressions, but impressions of the user.

What does it actually measure?

Amazingly, probably those and more.

What is the good news?

If early results are any indication, advergaming has the promise to reveal not only who consumers are and what they do online, but why they do what they do. And this "why" could have serious implications for advertising because gaming takes place with user consent and in measurable environments. Heuristics will develop that will define who certain players are and how they are expected to behave.

Given a large enough sample and a combination of modern game theory and other mathematical techniques, it may be possible to render viable predictions for user behavior in a game. Such behavior could provide insight into preferences for advertising and promotional offers.

Take a look at what CBS' SportsLine.com is doing with its poker titles, and at the capabilities of Microsoft's Xbox titles like "Halo" and "Madden 2006." Imagine knowing what a person is going to do at a given moment in a game.

The bottom line: Advergaming will probably deliver the motherlode of statistics modeling showing the past, the present, and potentially the future.