Copyright 2000 by Scott
Hays
Magazine: Digitrends
Topic: The Online Ad
Industry’s 'Tower of Babel’
Byline: Scott Hays
In the seven years since he founded
the interactive-media agency Mediasmith
Inc., David Smith has found himself embroiled
in a series of "currency discrepancy"
squabbles with online publishers. These
typically occur at the end of an online
advertising campaign, when publishers
substantiate the agreed-upon currency
valuation impressions, clicks, unique
visitors, sales leads... whatever. Smith
estimates that in three of every 10 campaigns,
the numbers compiled by publishers are
off by greater than 10 percent sometimes
as much as 50 percent - when compared
to the figures his company collects on
its own or through a third-party ad server.
"There's been this ongoing disagreement
between buyers and sellers on the issue
of impressions served because the two
sides can't seem to agree on the valuation
of an impression - or even the definition
of impression," says Smith from the
San Francisco-based offices of Mediasmith
Inc., a former soap factory 18th and De
Haro Street that's near impossible to
describe quite right, but looks incredibly
wired and ultra-modern. "The reality
is we have a Tower of Babel, and we spend
too much time on proof- of-performance
issues. The problem becomes even more
complicated when sellers and buyers use
different technology.
"Until we end up with some sort of
standard, the equivalent of the Nielsen
ratings in television - with its faults,
and room for wiggle - we'll continue to
spend an incredible amount of time resolving
discrepancy issues, rather than trying
to move business ahead."
Leaving the Station
Advertising on the Web wasn't even being
measured when Smith started Mediasmith.
Today, hundreds of millions of online
dollars depend on online buyers and sellers
arriving at apples-to-apples comparisons
in online advertising campaigns. A few
choose to ignore the problem, suspend
disbelief. Others agree to disagree, and
compromise on a figure that's "fair,"
usually a discrep-ancy of less than 10
percent. Always, the problems affects
business - at Mediasmith, eight of 50
employees spend more than half their time
resolving success-meas-urement issues.
The Web auditing industry continues to
define itself, and has yet to arrive at
standard, shared understandings of such
basic industry terms as "click-through"
and "impression." When discussing
the definition of an impression, for example,
Smith likes to use the analogy of a train
leaving the station. When, exactly, does
a train "leave"? When the word
comes from the tower for the engine to
move? Or when the caboose finally clears
the platform?
Likewise, when exactly is an impression
served? Some publishers define an impression
as when the page fully loads, and the
ad is requested. Most agen-cies register
as an impression the moment when a banner
ad receives full exposure. And though
mere nanoseconds are involved, these can
mark the differ-ence between who gets
paid, and when, and for what.
And building confidence in the count isn't
the only hurdle. Third-party ad servers
- the basis for any product that evaluates
advertising across mul-tiple, unrelated
sites - often use ad-measuring technologies
different from those utilized by pub-lishers,
yielding different results. "We represent
the advertisers, and we believe they should
get what they paid for with regards to
impressions served," says Anna Collins,
vice president of media for third-party
ad server Avenue A. "Advertisers
are looking for effective advertising
and they're looking for a consistent counting
method. As long as we use our counting
methods and share these numbers with publishers,
we feel we're getting closer to the goal
of delivering accountable adver-tising
for our clients."
'Reasonable' Rules of Engagement
Across the railroad tracks on Howard Street
in San Francisco, MyFamily.com advertising
sales director Richard Johnson acknowledges
the debate between online media buyers
and sellers over currency discrepancies.
"It's really about trying to get
the most bang for your buck, and there's
nothing wrong with that," Johnson
says. "But whether it's the technology
or how impressions are defined and measured,
buyers and sellers can't seem to agree
on a solution that keeps everyone happy."
MyFamily.com
is an online community for families that
consistently ranks among the top 20 sites
for page views by Nielsen//NetRatings.
There, discrepancies less than 10 percent
are typically considered a wash, while
greater discrepancies require the fine
art of compromise. "As long as you
pre-establish reasonable rules of engagement
prior to the business relationship,"
says Johnson. "problems between buyers
and sellers shouldn't surface."
Yet pre-established rules of engagement
can often give an advantage to one side
over the other. For example, a small,
struggling publisher grudgingly accepts
the terms and conditions of a large-volume
online advertising agency, and its recommendation
for a third-party ad server, primarily
because the publisher needs the business.
A larger publisher, like AOL or Yahoo!,
may not, primarily because everyone's
already scrambling to advertise on their
sites, so why acquiesce to the demands
of a little old online ad agency?
Not a few companies end up signing on
to discrepancy agreements just to avoid
petty squabbles, says William G. Smith,
northwest advertising manager for salon.com,
a larger online publisher with 12 demographically
specific editorial sites. "We have
some ad agencies that refuse to sign our
terms and conditions," he admits,
"and in those cases we discuss where
exactly they're uncomfortable, and then
we get in writing some `reasonable' compromise."
Apples to Apples Comparisons
So why can't buyers and sellers agree
on a "reasonable"
formula that works for both sides?
While the TV industry has settled on the
A.C. Nielsen ratings as barometers for
American viewing patterns, the Internet
has yet to agree on a single method for
measuring its audience. And given the
struggle to compare apples to apples,
buyers and sellers may never see eye to
eye, as long as measuring campaign results
remains an adversarial process-my numbers
versus your numbers.
"Most of the problems arise when
you throw a third-party ad server into
the mix," maintains Nick Centofante,
media director for Pennsylvania's U.S.
Interactive, "because some publishers
won't accept third-party numbers. But
third-party ad servers make our jobs a
lot easier.
"I think it's a matter of working
these things out, explaining to your client
that this is the Internet business and
discrepancies are going to happen,"
says Centofante. "And then it comes
down to the relationship you have with
a particular publisher." Says U.S.
Interactive purchases a million impressions
with Publisher A, but the response rates
are so below projections the client is
disappointed. Through its relationship
with the site, U.S. Interactive could
theoretically negotiate for bonus deliver
to account for the low performance, or
run the campaign for another couple of
weeks on good faith.
Working for an online publisher, Smith
with salon.com takes a slightly different
tack. "In most cases, we end up over-delivering
our agreed upon currency valuations,"
he says. "If we find that we have
under-delivered on a particular campaign,
we are more than willing to give the client
a make-good, rather than jeopardize the
relationship. However, even that becomes
problematic when you don't have the impressions
to give because the site's completely
sold."
Says Smith with Mediasmith: "From
an agency's perspective, we feel publishers
need to be more concerned about whether
the advertising campaign works effectively
for the advertiser. If it doesn't, publishers
won't get renewals and they'll soon be
out of business. Sites will only make
money long-term if they help advertisers
maximize their return on online dollars
spent, and this starts with the basics
for counting. We need more information
from some of the bigger publishers about
why their data is often dramatically different
from our own. This is a big issue, and
we need to get the big players from both
sides at the same table."
In Search of Bright Lines
Though there are no bright-light standards
agreed upon by media buyers or sellers,
or even third-party ad servers, a recent
report of the New York City-based consulting
firm Jupiter Communications suggests that
agencies that serve ads themselves, or
via third-party ad servers must share
data with publishers to maintain good
business relationships.
Meanwhile, several industry groups and/or
associations have embarked on attempts
to define and measure the results of online
advertising campaigns. And although there's
a grab bag of initiatives and/or proposals
out there, each demonstrating the many
intricate layers of online media buying
and selling, "no one document has
surfaced that the entire buying/selling
community can get behind," says Brian
Monahan, former director of online media
buying for the San Francisco online ad
agency, Exile on Seventh, and founder
of the newly-formed Inrhythm Marketing,
a marketing systems integrator. He complains
that 50 to 85 percent of publishers' numbers
never matched those Exile collected through
its third-party ad server. "We spent
a fairly significant amount of time just
trying to resolve these issues,"
Monahan says.
So, several months ago at the Digitrends
Media Buyers Summit in Aspen, Colorado,
Monahan and several senior-level online
media buyers met to discuss what they
could do as a group to help simplify and
standardize the online advertising industry.
"Earlier this year, publishers got
more militant about requiring ad buying
agencies to sign their own terms and conditions,"
says Monahan. "As media buyers, we've
got to read these things for 15 to 20
Web sites on any given ad campaign, and
they're always skewed to favor the publisher.
We decided then to band together as buyers
to come out with a document that adequately
protects our clients' interests."
Monahan and the other media buyers want
to unify the community behind "some
document that everyone can live with,"
then open a discussion with major publishers.
To that end, they produced a template
unveiled during the American Association
of Advertising Agencies task force meeting
held in June.
"I guess if Yahoo! and AOL and some
of the other larger online publishers
drag their feet and get their lawyers
involved, our ultimate leverage would
be to have the entire buying community
embargo a publisher that refuses to comply,"
Monahan offers.
A second group of 40 or so interactive
agencies, calling itself the New Media
Consortium, is also attempting to bridge
the gap. "The best we can do is come
up with recommended standards," says
Greg Smith, former director of strategic
services for Darwin Digital, facilitators
of the consortium. "Sharing knowledge
is always needed, and I think from what
I've seen these are some of the best and
brightest to come together. It's nice
to see everyone headed toward a better
way to conduct business."
Both the Aspen group and New Media Consortium
have approached various industry associations-the
Internet Advertising Bureau (IAB), the
American Association of Advertising Agencies,
the FAST Steering Committee to work together
on the non-sexy, yet essential building
blocks of how to conduct business in the
online advertising world. They have not
always met with enthusiasm.
"Currency discrepancy is not one
of the current issues that we're addressing,"
says FAST chair Vivienne Bechtold. "We
recognize it is one that needs to be addressed
but at this time, we are focusing our
effort more on barriers that are close
to the heart of interactive marketing
and online advertising." For example,
consumer privacy, easier insertion order
and new ad model guidelines, and a broad
range of measurement issues.
"Until we can come up with unified
terms and conditions, and get the publishers
to agree, there's going to continue to
be currency discrepancies and other problems
that will prevent this business from being
as effective as it could be," adds
Smith of Mediasmith.
Slower than a K56
The Internet Advertising Bureau, in a
1997 report by The Media Measurement Task
Force, stated that metrics and methodology
is only a "beginning, not an end,
in the essential process of establishing
a viable and useful advertising currency
for the World Wide Web." When buyers
and sellers spend way too much time getting
to the root of currency discrepancies
and negotiating compromise solutions,
says Patty Keegan, vice president of Carat
Interactive in Boston, "these discrepancies
force buyers and sellers to question the
credibility of the entire medium."
It is indeed odd that, while business
on the Internet moves at lightening-fast
speed, attempts toward a resolution of
the issue of currency discrepancies proceed
slower than a K56 modem connection. Is
it because online media buyers and sellers,
and third-party ad servers, too often
use different ad-measuring technologies
solely for selfish "me and mine"
benefit?
Until the day when the online ad industry
voids adversarial role playing for reasoned
agreement on thoughtful and exact methods
to measuring campaign results, the industry's
"Tower of Babel" may someday
cause damage of Biblical proportion, figuratively
speaking.