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from web publishers
It's there, yet most do a poor job profiling visitors
By Dave Morgan
If you are a media buyer, you are by now probably pretty jaded about internet advertising.
You’ve gotten the pitches, seen the studies, read the presentations about how the internet can target your audience effectively, can provide interaction, can show you which ads work, which don’t, etc.
But when you put a site publisher’s sales rep up against the wall, chances are he or she can’t really give you much detail about who visits their sites other than where they go and how long they stay.
Are they little old ladies?
Are they teenagers?
Are they working women?
Or like the pouch at a keyboard in the famous New Yorker cartoon, exclaiming, “On the internet no one knows you’re a dog.”?
Why are so many site publishers in the dark?
Why are so many online publishers unable to track a business-model metric that is basic for media companies operating in the off-line world?
TV and radio broadcasters are fanatics in how they track the audience demographics and advertising revenue costs generated for each and every programming element and each and every time slot.
Cable TV operators do the same, tracking the revenue driven from subscriptions and local ad revenue for each household that they pass, and for every subscriber that connects to their network. The costs to pass each household, acquire each subscriber, and provide programming on a per subscriber basis are tracked just as closely.
In the magazine world, publishers closely monitor the volume and value of their circulation, whether paid, controlled or single-copy sales. They use research to profile their readership, and sell their advertisers according to that profiled demographics.
When audience profiles of these publications shift, advertisers and the publishers’ rate cards shift.
Ad pages follow audience, and publishers constantly evaluate their audience on a cost/revenue basis, matching revenue from subscriptions, advertising, and merchandising (list rental, cross-selling/up-selling, etc.) with related promotion, acquisition, editorial and production costs.
Even newspaper publishers, generally considered archaic relative to other media companies in their audience management practices, devote considerable resources to understanding the economics of their circulation base.
They maintain proprietary circulation databases to manage delivery, billing, ad sales support, and circulation-churn management functions.
And they are meticulous in tracking the geographic composition of their audience reach. Many newspaper companies have become quite adept at determining the value, relative revenue contribution and profitability of specific audience clusters. They overlay advertiser target-marketing and distribution footprints against maps of their circulation reach and their penetration of key target demographics audiences to determine the value of their audience.
Why then are publishers on the internet, the “most measurable medium the world has ever known,” so far behind their low-tech, analog counterparts?
A number of factors were behind the lag.
First, until recently, no one cared. With once-in-a-lifetime support from frothy capital markets during the internet bubble, online media companies developed their businesses without traditional business disciplines.
There was no demand for profitability. The focus was on growth. And to the capital markets, growth was page views and unique visitors with no regard to the value, or lack thereof, that traditional advertisers and marketers would attribute to those page views and visitors.
Second, the industry developed with some bad habits in place.
With owners neither worrying about profits nor caring about the true value of their audience, few in the online media world bothered with systems or processes to measure those metrics.
Plus, with online ad industry metrics in a state of constant flux, it was almost impossible to even know what to track. When it came to understanding whether their businesses were operating according to basic media business economics, online publishers were left with almost no visibility.
Third, the pace of development and growth was so fast, and the expectations were so great, that publishers could not afford to slow down to implement basic information technology and financial monitoring and control system.
They did not have the time to understand or manage the long-term financial drivers of their business.
The assumption was, grow page views and visitor “stickiness” and the rest will take care of itself.
The advertising community rightfully is not pampering publishers with a pat on the back and a consoling, “there, there, after all you are a new medium.”
The tools have been developed to enable publishers to collect data from across their enterprise and cross-reference it to develop profiles of all their site visitors, be it data from email addresses, user-provided registration information, stats gathered in sweepstakes and contests, server logs, ad serving information.
From these profiles publishers can tell you what kinds of people are on their sites, at what times of day and where they are spending their time.
This can help you make more informed decisions about buying ads. The thought-process experience should not be substantially different than what you go through now with audience data from TV, radio and print.
Demand it. Everyone will win in the end.
March 15, 2002 © 2002 Media Life
-Dave Morgan is the President and CEO of Tacoda Systems, a New York software company that provides a data integration system to improve the efficiency and effectiveness of online marketing activities. He founded Real Media in 1995.
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