Is Online Media Measurement in Crisis?

Online measurements abound, yet the industry as a whole has yet to form a standardized and uniform set of metrics that satisfy the needs of the advertising and marketing community. This lack of a simple set of online metrics is keeping Internet advertising from reaching its full potential and has placed the metrics surrounding online media at a crossroads.

Today, new methodologies and companies pop up daily to measure what’s happening online. While this approach of creating new metrics and measurement constructs provides unique insight into online behavior, the lack of a consistent foundation with other media measurement (e.g., GRPs) has muddied the waters, making it harder for marketers to understand and evaluate the value proposition of online advertising. Page views, unique visitors, impressions, CTRs, time spent, engagement, video viewers, initiated streams, completed streams — we keep changing what’s important.

In addition, existing methodologies continue to change and move in increasingly diverse directions. This leaves us with several different numbers for the same metric depending on the source. For example, the continued mix of internal and external metrics, cookie-based vs. panel metrics can make it nearly impossible to judge different sites on an apples-to-apples basis.

Amid this confusion, a large segment of the industry has gravitated towards the click-through rate. Unfortunately, click-through rates don’t necessarily capture the value of important attributes such as message association, brand lift, purchase intent and the ability to generate relevant searches. By simply measuring clicks, the value of online media is underestimated.

As an industry, it’s time to align simple metrics with the differing needs of advertisers. If we could define, develop and agree on an approach that works with existing traditional media measurement, the doors to online would be opened for advertisers who have been reluctant to move online or have found it difficult to judge the value of their spend.

Such an approach would rely heavily on reach and frequency, metrics that have been at the core of established media and GRPs. But we can’t stop there. If we only judge online media based on reach and frequency, then there is no difference in the impression on Google (a transient user headed elsewhere with intent), Web-site articles (an engaged user reading an article, say), Facebook (a social user scanning updates), AIM (an entertained user engaged in a different task but impressionable) — you get the point.

To be truly effective, this new approach would have to take the simplicity of the existing traditional media-measurement model and combine it with the unique online data that make this medium so appealing to marketers. For instance, combining time spent data with the reach and frequency measures would provide a much deeper understanding of user behavior and brand interaction and thus be much more meaningful to potential buyers.

Ten years ago, our focus was on building this media. We needed to grow audience and demonstrate scale. In our rush to build audience, we developed many metrics, but we forgot to establish a measurement baseline that makes sense and was consistent with what advertisers have already learned. Today, the Internet is mainstream. Eighty-one percent of people ages 18+ in the U.S. are online, according to Harris Interactive, and 67 percent of U.S. households are on broadband, according to eMarketer.

GRPs and reach and frequency measures are standards because they work for marketers. We have reached the tipping point where online has the scale needed to apply established metrics such as GRPs and reach and frequency measures. There is no reason that online advertising can’t learn from history.

Anne Claudio is vp, research at CBS Interactive. She can be reached at anne@cbs.com.