Abstract:
In just a few short years, the Internet has become a major advertising medium. It is hard to imagine life today without the ease of access to information that Internet applications provide. And most marketers of consumer products can’t imagine a world where content and advertising on the Internet are not valuable tools used every day to reach consumers. The fact is that now most makers and sellers of traditional media, television, radio, print, outdoor, in-store, etc., now find themselves in direct competition with the Internet for advertising dollars.

From 2004 to 2006, nearly 40 billion dollars were spent on Internet advertising. The decisions about which sites to purchase were based on the quantity of the audiences (audience counts and page views), and the quality (based on affinity or demographics). But during this same time, changes in the technologies used to deliver Internet content have both revolutionized the user experience and in some cases completely changed how we measure the quantity of audiences. These changes in technology are forcing the Internet advertising marketplace to rethink how audiences are measured.

• According to Nielsen Online, today nearly 78% of U.S. population (2+) can access the Internet from home.
• At any given time, nearly 85% of those online from home are accessing the Internet using a broadband connection.
• The traditional ways of measuring Internet audiences were tied to the technologies used to deliver the Internet to computers. Content came down on pages which contained ads, meaning that downloading a page counted as an exposure to an ad.
• Changes in the core technologies used to deliver Internet content, driven by the faster access speeds of broadband, have, for some kinds of sites, made the page view obsolete as a means of measuring ad exposure.
• While the debate is still ongoing, new measures – such as total minutes – have been proposed to replace (for some kinds of sites) the page view as the key metric of ad exposure.

Full Article:
In 1950, less than 10% of the U.S. population had access to television, but only five years later, over 65% did. Even the Internet was not adopted at this staggering pace. In 1995, less than 10% of the U.S. population had access to the Internet, and within five years just over 50% did.

Internet growth has continued to escalate as the chart below shows. Beyond penetration, the key change in Internet usage has been the share of users online at any given time with access via a broadband connection, more than doubling from 39% in 2003 to nearly 85% today. Increased speed of Internet access has opened the doorway to a wide range of changes in technology that forces a reexamination of how to think about measuring the audience of Internet sites.

Interactivity fuels growth
Growth in usage of the Internet has come from increased penetration of users, but also from increasing levels of usage (time spent). Much of this growth has drawn from, and is expected to continue to draw from three major kinds of Internet content:

1. Consumer generated media – YouTube is one example of the use of video and still imagery, along with music and the spoken word.
2. Social communities – MySpace, Facebook, and others have revolutionized the ways in which people connect and interact.
3. Blogging – While some weblog growth simply comes from new blogs, the bulk comes from readers voicing their opinions – on the Internet, everyone’s a critic.

After a brief downturn a few years ago, advertising dollars on the Internet have also grown substantially. In the U.S., Internet ad revenues totaled $16.9 billion in 2006, exceeding the 2005 total by 35%. Revenues for the first quarter of 2007 soared to $4.9 billion, a 26% increase over the comparable period in 2006, and a 2% increase over the fourth quarter of 2006, the previous record quarter.

Counting what counts
The interface between advertisers and the media they purchase for running ads, relies on common definitions of how to value various vehicles. In simplest terms, this metric has been the audience, the number of unique viewers/listeners/readers/etc. to whom an ad will be exposed. Media generates information about the size and quality of their audiences and use that information to determine rates. Advertisers can evaluate and compare different vehicles using common and easily-understood measures.

For the Internet, the net audience (number of people who saw a site) has been, and continues to be, a key measure of tonnage. Page views have been the standard measure of exposure or frequency. While ad exposure on television is limited to the number of times a commercial can be shown, there are no such constraints on the Internet, where the same ad can be viewed many more times within a comparable time period. However, as technology is changing, the page view may end up being a much less valuable measure as the industry moves from the Web 1.0 to the Web 2.0 world.

Changing Internet technologies
There are a lot of acronyms used to describe emerging Internet technologies. The key one to understand is RIA, which stands for Rich Internet Applications, of which Ajax (Asynchronous JavaScript + XML) is an example. To understand how these new technologies work and what they mean, it is important to understand how Web 1.0 worked.

Back to basics
Old-style web applications operated on a simple paradigm. You typed the address of a website into your browser and it called for the home page of that site. A good home page provided a way for you to navigate through the content of the site through hyperlinks to other pages that contained more detailed information about the subject of the site. Each link that was clicked brought back another page of content that could include more links, perhaps to other websites. As you clicked on more and more links, you might have moved across a number of websites and through dozens of pages, making the back button your best friend when it came to finding your way around the web. Moving from site to site by clicking on links is what web surfing was all about.

Web pages were basically static once retrieved, and in order to get current information, such as current temperature, a click of the refresh button would download the whole page all over again. Each time a page was refreshed, however, an ad publisher could send a new advertisement. This ready link between a page download and serving an ad provided an easy-to-use metric for measuring advertising – a website with more page views provided more opportunities for ad exposures.

A better way
Web developers have been working for years to provide a better Internet experience for the user – a richer more dynamic experience that is faster and has more features. Today, the results, such as Rich Internet Applications, Ajax, and Web 2.0 technologies, are rapidly changing the user experience on the Internet.

In the Web 2.0 world, pages still come down the line to the computer, but they are no longer just a holding area for content – they are now a holding area for functionality as well via small programs that run to update or change parts of the page without the user having to click the Refresh button. These new technologies are made to work with the faster broadband connections most people use to access the Internet today.

An example of this new technology is when a search function starts to suggest possible complete searches as it is typed. The page itself didn’t refresh, but the small programs that are brought down from the web and are running on the computer interacted with the server, interpreted what was typed, and offered suggestions.

Some other examples of RIA include:

• An Internet email page that enables a user to write, send messages and preview existing ones without refreshing the full page.
• Mapping sites that enable a zoom in or out function – only the map content itself is refreshed, not the full page.
• Streaming content like stock tickers or the current temperature that constantly update, but within the Internet page a browser has downloaded.

Need for new standards
When extensively used, these new technologies can challenge the traditional ways in which advertisements have been served to users and how ad exposures have been counted. The key benefit of RIA is to provide a more efficient delivery of content to the user. By anticipating what the users might want to see or by providing updated content without requiring the user to ask for it, RIA often means that the user no longer makes as many requests to the server as before.

In an RIA world, if an ad is served to the user only when the page is first downloaded, then it could possibly remain on display for possibly a long period of time. However, if ads are served each time an RIA/Ajax request is made to the server – like when the current temperature is updated every ten seconds – then exposure times could fall substantially from current levels.

It’s clear that advertisers and publishers, in conjunction with Internet audience measurement services, need to develop new standards for how Internet advertising audiences are measured. And given the pace of technological change on the Internet, it’s probably safe to assume that these standards will continue to evolve over time.

One size does not fit all
Not all sites/Internet applications will be able to make use of new technologies to the same extent. Wikipedia is a classic page-oriented website, full of links to other pages with more detailed content. Its encyclopedia nature is a perfect fit to Web 1.0 technologies. However, a site like YouTube would not be the same without streaming video technology.

Variations between sites and commonly-used measures of audience are striking. The table below illustrates how a measure of “page view” and “total minutes spent viewing” can vary substantially.

For the big search engines, Google and Yahoo!, page views and total minutes provide similar comparisons of the audiences. Google’s audience is 3.1 times larger than Yahoo!’s when measured by page views, and 3.3 times larger when measured by total minutes. However, comparing two social networking sites, MySpace and YouTube, the two measures produce quite different results. The MySpace audience is 10.4 times larger than the YouTube audience when measured by total minutes, but only 3.6 times larger when measured by page views.

Even at the broad category level of Internet sites, there are substantial differences. Taken together, Telecom/Internet Services, Entertainment, and Search Engines/Portals & Communities account for about 60% of total time and 60% of total page views. However, because of differing levels of adoption of RIA technologies and differing ways the sites are used, the distributions across categories of minutes and page views are quite different. Telecom/Internet Services (email, IM, etc.) account for 17% of total page views, but 24% of total time spent on the Internet. Search Engines/Portals & Communities shows the opposite pattern, accounting for 27% of page views, but only 18% of total time.

Within the Entertainment category there is also a strong disparity across various subcategories. The table below compares share of total time and share of total page views. Again, different measures have the potential to lead data users to very divergent conclusions about the importance of various kinds of entertainment content – and could lead advertisers to quite different conclusions about what they are buying.

Meeting of the minds
The Interactive Advertising Bureau (IAB) and the Media Ratings Council (MRC) – along with advertisers, site operators, and measurement services – are currently working to define new audience standards for measuring the audience of sites making use of RIA technologies. They have jointly issued guidelines that are currently being evaluated by the industry (see the Resources section below).

Measurements of strong user activity (clicking through, typing, mouse button use, etc.) that can be tied to ad serving may become one way in which audiences are measured. It also seems clear that a measure of total time spent will be a key metric in Internet audience measurement for the future. Scott Ross, Director of Product Marketing for Nielsen Online’s NetView service agrees, “’Total Minutes’ is the best engagement metric in this initial stage of Web 2.0 development, not only because it ensures fair measurement of Web sites using RIA and streaming media, but also of Web environments that have never been well-served by the page view, such as online gaming and Internet applications.”

For advertisers, a potential downside of RIA is that ads will no longer be the most dynamic element on the Internet page. However, the flip side is that Internet users are going to be more highly engaged with the content presented to them on the same page as the ad. And in general, a more engaged audience is also more likely to engage with the advertising.

For site publishers, it will be essential to understand how the implementation of RIA will impact the current measures used to evaluate audiences. And given that the link between a page view and an ad exposure will be broken for many of these sites, publishers must be careful to document the rules they use to serve up ads, whether based on user activity or on elapsed time.

To produce a strong ad revenue site, a publisher must first provide a great user experience, and that will likely involve RIA technologies. Second, they must find ways to monetize the value of their audience, either via traditional metrics like page views or new ones like total minutes. And finally, they must have a way to track those measures, and provide clear and well-documented rules for how ads are served and changed.

The road to improvement
The ways other media are measured – television, radio, print, etc. – have substantially improved over the decades, in both the quality of the audience numbers and in the degree of precision of the various measures. However, the basic audience measures that are produced, what it means to be a viewer, a listener, or a reader, have remained substantially unchanged for many years. With the measurement of Internet audiences, a high degree of accuracy and precision can be provided for a number of different ways of measuring the audience. But in just more than a decade, changes in technology have challenged some of the most basic measures of the audience for an Internet site. And like all things related to the Internet, change is the only constant, and what we see today is only the beginning of what we will see tomorrow.

Resources:
For a brief and easy-to-follow explanation of how the RIA Ajax technology works, try this article written by Jesse James Garrett on the Adaptive Path website. http://www.adaptivepath.com/ideas/essays/archives/000385.php

To read the proposed guidelines issued by the IAB on measuring Internet audiences in an RIA world, go to…
http://iab.net/iab_products_and_industry_services/1421/1443/1470