Reality Check | Ephraim Schwartz » Advertising makes the Web go 'round

August 07, 2007 | Comments: (0)

Advertising makes the Web go 'round

TAGS: Business

Researchers are still searching for the key to monetizing a Web site visitor's behavior

Out with the old metric and in with the new is the mantra among Internet media and market research firms.

One of the first metrics used to indicate a Web site's value as an advertising medium was the total number of visits users made to the site in a particular time period. Then the metric du jour became the number of unique visitors who browsed the site. That transitioned to the depth of user interaction as measured by the number of page views per visit.

All of this was being driven by the fact that the Internet was created as an information vehicle, according to Kevin Ryan, vice president and global content director at Search Engine Strategies.

"It is being manipulated into an advertising vehicle," Ryan observes.

Fact is, the most successful sites, as measured by current standards, are still those that most closely resemble an information resource.

But now, Nielsen/NetRatings believes "total minutes," a.k.a. time spent on a site, is a superior metric to measure consumer interest and thus translate, somehow, into a particular site's potential to sell more products or services.

However, Ryan worries that if every couple of years you tell advertisers that they should use a new metric, you risk losing credibility.

Nevertheless, Nielsen did not come to this metric by chance; rather, the company says it is reacting to the changes in Internet technology. There is certainly some validity to this. The latest Internet technology does appear to make page views less relevant.

AJAX, for example, delivers new content without reloading the entire page. Streaming media changes what content you can view within a single page.

Nielsen says that total number of minutes becomes the "common denominator" for user behavior because it is "independent of site design."

And in a classic case of denigrating the old product once you have something new to sell, Nielsen in its press release says that certain Web environments "have never been well-served by the page view, such as online gaming and Internet applications."

Nielsen offers as an example the fact that whereas MySpace garners 10 times more page views than YouTube does, YouTube visitors spend three times as many minutes on YouTube than MySpace visitors spend on MySpace.

Does this mean publishers need to revamp their Web offerings in order to keep eyeballs on their sites for longer and longer time periods? If that's the case, how and when will ads be served? This is a challenge, admits Scott Ross, director of product marketing at Nielson.

Typically ads are served when a page loads. For example, 10 page views equals 10 ad views. But does 10 minutes on a single page mean one ad view, or do you interrupt the visitor every minute to get an equivalent amount of ads integrated with the surfing experience?

Now that there is less refreshing, how are the ads going to be served?

While the total number of minutes is indeed a reflection of changing technology, as a metric it may not reflect any change in why and how consumers are motivated to buy.

Ryan says that, for the most part, advertisers still view the Internet as a direct-response medium. They want to know how many people made a purchase. Therefore, how much time a consumer spent watching a video may have little to do with whether or not they buy.

While Ross admits this is true, he says that in general the more time spent on the site, the more time there is to give your pitch.

"That is the supply; whether it affects demand for the inventory is another matter," admits Ross.

Publishers have two clear goals, says Ross. The first is to create a user experience that keeps people coming back, and the second is to create a good ad platform on which advertisers want to show off their wares. Ross believes that the total-minutes metric reflects those two goals.

If you are given 10 opportunities in a 10-page slide show or one opportunity when a single video is served, where is it better to advertise?

In trying to answer that question, it seems to me everyone is missing the point. Advertisers and publishers need to tap into more basic research as to what makes people respond -- that is what's inside the black box.

Yes, some day, total minutes may prove an effective way to gauge the advertising value of a site, but that doesn't tell us what about total minutes makes it a worthwhile measure.

Why are these questions important? Well, to state the obvious, everything you love about using the World Wide Web is underwritten by advertising. End of story.

Posted by Ephraim Schwartz on August 7, 2007 03:00 AM

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