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
’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
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.’
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
’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
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
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.’