The Online Ratings Game Is Heating Up

SAN MATEO (07/13/2000) - Now that corporate America has taken to the Web, a nagging question that managed to keep a low profile at the beginning of this adventure is suddenly impossible to ignore.

"How do we know if our Web site is working?" is something many business/technology strategists are likely to hear. For some the answer will be relatively simple, derived from dollars, number of hits, or some other easily measured set of parameters.

But for many it is a question demanding answers that don't yet exist. This is the case for Erica Goldberg, managing director of research and business development at Reuters Media LLC in New York.

"We just finished packaging a financial video product," Goldberg says, "so we are interested in understanding how to measure streaming video use outside the Web browser. What success means here is difficult to quantify -- no one knows what the standard should be."

In an effort to get a better handle on these kinds of questions, Goldberg is working with Risa Weledniger, director of research at 24/7 Media Inc., in New York, to form the Association for Interactive Research (AIR).

"Clearly, the Internet is different from radio and television," Goldberg says.

"You might think, for example, that a URL is analogous to a channel on your TV set. But at Reuters we use the Internet as a distribution media. Our content volume is equivalent to four bibles a day, yet there is no unique URL for Reuters where you can track all this. If AIR is successful it will help us understand these issues and develop the right tools to measure Internet behavior and usage."

Some of those tracking tools already exist, and are derived from the ratings methods developed for radio and television. At the core of these is the panel.

Almost anyone who has lived in America since the 1950s is familiar with the Nielsen family -- that icon of the television age that is supposed to represent Mr. and Mrs. America and their average number of children.

Behind that image is a sophisticated statistical model through which Nielsen builds panels of viewers. The numbers generated from the viewing habits of those panels produce the ratings by which television shows live and die.

Although the analyses are very complex, the overall procedure is straightforward: If you have a Nielsen box hooked up to your television, producers and advertisers can get the information they want, namely what you are watching.

The leading Web metric companies also use panels, but they agree with Goldberg that things are not so simple on the Internet.

"The behavior you want to measure on the Internet goes beyond simple viewing or browsing," says Kofi Blankson, president of NetValue, in New York.

NetValue started in the Internet ratings game in France and this spring established a beachhead in the United States to compete with more established players such as Nielsen//NetRatings, in Milpitas, Calif., and Media Metrix, in New York.

NetValue builds panels using a rigorous, random process. If you are a panel member, you will have a piece of NetValue software on your desktop that keeps track of what you are doing on the Internet.

Blankson says one advantage of the NetValue system is that the software resides at the network interface, not on the browser.

"Some of our competitors can only track what you do inside the browser," Blankson says, "but that misses a lot of important activity -- things like downloading a Napster file, gaming, ICQ chat, and e-mail, just to name a few."

Reuters' Goldberg was attracted to NetValue partly because of this capability.

"We are working with them to develop research that fits our needs," she says.

But that relationship is not exclusive. Goldberg is also a customer of Nielsen//NetRatings. "I see value in all the ratings companies," Goldberg says.

"I don't do exclusive deals.

Not everyone agrees that the panel approach is the best way to track behavior on the Web. In particular, Arbitron, the king of radio metrics, takes a different tack.

"We don't think panels can do justice to things like streaming media," says Bill Rose, vice president and general manager of Internet services at Arbitron, in New York.

Streaming media is the delivery mechanism for audio and video across the Web.

"Already there are over 3,700 radio Webcasters using streaming media," Rose says. This statistic gets to the heart of one of the main problems with trying to use panels for Webcasting. In a typical television or radio market there are usually fewer than 100 stations to monitor. For network television it is generally less than four.

For traditional media that means panel sizes can be small and still give accurate statistics. Internet panels need to be much bigger, Rose says. "Fifty thousand is still a drop in the bucket."

So Arbitron jumped into the ratings game last fall with a server-based system that uses the Webcaster's log files and analyzes the data. This method has the advantage of completely bypassing all the issues involved with trying to build an accurate panel because it essentially captures all the usage data.

Nielsen//NetRatings is a joint venture between Nielsen Media Research, of television fame, and NetRatings. The partnership began in 1998, a year after NetRatings' inception.

Nielsen now owns 54 percent of the venture. NetRatings was eager to make the alliance because of the power of the Nielsen name. "They [Nielsen] have huge name-brand recognition and know more about panel-based media research than anyone on the planet," says Tim Meadows, vice president of products and services at NetRatings.

NetRatings supplies the Internet measurement software. "If you are selected for a panel, you get a piece of our software," Meadows says. "It is a Java application that launches in the back of your browser. It tracks everything that goes on inside your browser."

Meadows says tracking activity outside of the browser is not a big deal. "The primary interest of all our clients is what happens in the browser," Meadows says, although he admits that e-mail is of some interest as well.

E-mail is, in fact, very important to Weledniger at 24/7 Media. "A lot of dollars are going into e-mail these days," Weledniger says. Media Metrix, the other panel-based measurement company Weledniger uses, can track behavior outside the browser. "We can monitor not only browser activity but also the use of any application on your desktop," says Stacie Leone, director of marketing communications at Media Metrix.

Clearly, the debate over how to rate and monitor activity on the Web is in its infancy. But competition to develop the most widely used system is sure to grow as the Internet becomes an ever-more powerful tool of commerce and entertainment.

Ratings companies in the race

Here are some of the companies that are developing ways to rate online activity.www.mediametrix.com: Media Metrix Inc., in New York, uses the panel method, a statistical sample.www.netratings.com: Nielsen//NetRatings, in Milpitas, Calif., uses the panel method.www.netvalue.com: NetValue, in Paris/New York, uses the panel method.www.arbitron.com: The Arbitron Co., in New York, uses analysis of Webcaster's log file data, nonpanel method.

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