Internet: A global understanding - Fast-changing technology is the main obstacle to creating Net audit standards, writes David Sumner Smith

Agreement on world-wide Internet auditing standards has been heralded as the most important step in the development of the medium. With accurate third-party measurement of Web site usage and directly comparable audit reports, marketers will finally be able to take Web-advertising decisions with confidence.

Agreement on world-wide Internet auditing standards has been

heralded as the most important step in the development of the medium.

With accurate third-party measurement of Web site usage and directly

comparable audit reports, marketers will finally be able to take

Web-advertising decisions with confidence.



The agreeing of global standards was threatened by business conflicts

between the biggest auditing bureaux, but now the rapid pace of

technical development casts the darkest shadow. Until the issue is

resolved, it is likely that many UK advertisers will continue to turn

their backs on the potential of the new medium.



World-wide Internet advertising has expanded five-fold, from dollars 37m

(pounds 23.7m) in 1995 to dollars 200m (pounds 128m) in 1996, according

to CyberAtlas’s review of various commentators’ estimates. More than 900

sites offer advertising space, according to Jupiter Communications’ Ad

Locator, but almost two-thirds of all ad revenue is collected by just

ten. The expansion looks set to continue, with CyberAtlas forecasting

that Net advertising will be worth dollars 1.6bn (pounds 1bn) by 1998

and dollars 4.5bn (pounds 2.8bn) by 2000.



Whilst growth forecasts are similarly buoyant, the Net advertising

market in the UK is fundamentally different in several respects, not

least of which is scale. A newly-published 300-page report by New Media

Communications reveals that total expenditure on Net advertising was

only between pounds 700,000 and pounds 1m.



’The picture is blurred by international campaigns,’ says director Ray

Taylor. ’But it is clear that expenditure by UK advertisers on UK-run

Web sites was eclipsed by a few big sponsorship contracts. Part of

Lloyds Bank sponsored the Financial Times site at the time of the

Budget, for example, and Vauxhall sponsored the Euro ’96 site. Such

deals are typically worth pounds 200,000 to pounds 250,000, so

sponsorship was worth around pounds 1.2m in 1996.



’More than 90% of all advertising went to the ten leading sites, which

provided service back-up and reasonable audience data. But the majority

of potential advertisers are unwilling to commit to the medium.’



Many of Britain’s top 500 companies have set aside substantial budgets

for marketing and promotions on the Net, the consultancy’s research has

revealed. ’Many firms have allocated pounds 1m or more for developing

their own Web site and/or advertising and sponsorship on other Web

sites,’ says Taylor. ’But before they go ahead and spend it, they need

to have a clear business case with accurate, independent measurement of

use. Auditing is far and away the most important issue in the

development of the Internet.’



These thoughts are shared by the International Federation of Audit

Bureaux of Circulation (IFABC), representing independent bureaux from 31

countries, including the UK and the US. They met in December to discuss

the findings of a working party and agreed that Web-site traffic

verification reports should be based primarily on ’page impressions’,

but also include ’visits’ and ’sessions’.



Although this minimum set of standards was agreed by ’an overwhelming

majority’ of companies, including ABC, the largest audit bureau in North

America, it was opposed by ABC’s biggest rival, BPA International, which

questioned its validity.



Like its American rivals, BPA already provides auditing services for Web

sites and has experience in the more mature North American Internet

market. But unlike ABC, BPA questioned the validity of decisions reached

by non-American auditing bureaux. ’We are curious that so much attention

is being paid to the IFABC,’ said BPA communications director Jeff

Yacker in December.



’The real power in the marketplace lies in the US, and American

advertisers are not going to be influenced by this federation.’



Far more influential, suggests Yacker, is the Coalition for Advertising

Supported Information and Entertainment (CASIE). A joint project set up

by the Association of National Advertisers Inc and the American

Association of Advertising Agencies, CASIE is an ad hoc working party

that has drawn up guiding principles of comparability, disclosure and

third-party auditing but avoids setting any technical guidelines.



With one voice



The IFABC is due to meet again in April in a new effort to ensure

unanimity.



’There is no dispute,’ said Yacker this month. ’As a member of the IFABC

we are working hard to develop internationally agreed standards. The

previous disagreement was over technical details. A lot has changed

since December.’



Whatever the reasons, the change of tone is welcomed by informed

observers, but more fundamental problems remain.



’It is very difficult to devise consistent standards when you don’t even

have consistent terminology,’ says Mike Crosson, director of electronic

publishing services at the new Interactive division of UK

contract-publisher Premier Magazines. ’The meaning of terms such as

’unique visitors’ and ’hits’ differs even between the west coast of

America and the eastern states.’



Far more significant than any of these issues, he says, is the

technological sophistication of the medium. ’The Internet has many more

dimensions than traditional media,’ observes Crosson. ’You need to build

a multi-dimensional profile of users. Netmap software gives a 3-D view

of site usage and the relationship between different sites. It can even

segment the data to check on the specific origins of a caller, so the

people operating the Digital Web site, for example, can recognise the

users originating from IBM.’



Standard issues



With segmentation and analysis capacities such as this, simplification

and standardisation of reporting is ’virtually impossible’, Crosson

claims, ’even though the growth in complexity makes the need for common

standards more critical’.



This Catch-22 situation will become even more complex with the expansion

of Net technology to a greater variety of delivery mechanisms. These

will include not only the rapid growth in audience resulting from the

arrival of Web TV, but also satellite transmission of services to

hand-held units, touch-screen usage of static sites, more sophisticated

automatic teller machines at banks and a new service being developed by

Teletext.



’A visitor to a Web site is nothing more than a window shopper, in any

case,’ says Steve Packard, chief executive of Ipswich-based InferNet

consultancy. ’It is only when an interaction takes place - a request for

further information, for example - that a value is attached to the

visit. That is what marketing professionals want to audit.’



New tracking devices which achieve this task add still further to the

complexity of auditing Internet usage. The Clear Code technology

developed by InferNet, for example, encourages users to register for a

PIN number that could be used at all participating sites, thereby

avoiding the need to repeatedly enter data.



In addition to making sites more user-friendly, Clear Code would allow

data mining and inferential analysis by clients, thereby allowing them

to build a picture of how usage of their site related to that of

others.



Although lists would not be offered, tracking devices such as this would

allow a level of understanding about Net usage far more sophisticated

than anything currently available for traditional media.



’Potential advertisers desperately want to be able to understand the

usage of Web sites,’ said Nancy Cruickshank, commercial director of

Conde Nast Online. ’But they are having difficulty with a complex new

set of measurements unlike any audit figures they’ve seen before.



’We plan to have independent auditing by the third quarter of this

year.



Right now, marketing professionals are working out how the Internet is

best used as a marketing tool, and a set of commonly-agreed auditing

standards would be invaluable.’



’Established media owners are leading the development of the Internet as

an advertising medium because their staff know about media sales,’ says

Taylor of New Media Communications.



’And they are crying out for authoritative third-party audits. The Net

is poised to grow rapidly as an ad medium, but it simply won’t happen

until site owners can provide authoritative, up-to-date evidence to

advertisers that it is worth spending their money.’



’The market has asked for a single standard,’ says Richard Foan of ABC

UK, co-chairman of the IFABC. ’This can be achieved at a level that

enables this new medium to reinforce the process of accountability. It

is a standard which will evolve as the medium evolves.’



Whilst recognising the threat posed by technological development, Foan

believes that the international body has adopted the right approach. ’I

am sure that the market prefers a minimum standard now that will grow

with the medium.



The alternative is multiple definitions that will remain for some time,

as they have for print media.’



Taylor believes that the IFABC should be applauded for its efforts to

set common standards for audience data. ’If they can reach agreement,

then Net advertising by UK firms will expand very rapidly.’



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