An online Gestalt switch

The role of media measurement in online advertising reflects the basic shift in the way media space is bought and sold on the Internet. One way to appreciate this Gestalt switch is to consider what “inventory” means online and off. In broadcast or print advertising, inventory is a scarce resource — no matter its circulation, a newspaper has a finite number of ad pages in each edition at a reasonable ad‐edit ratio. This scarcity is even more pronounced in broadcast; hence the practice of reach “guarantees” promised to advertisers on the basis of past Nielsen ratings, and adjusted after the fact (via “makegoods” or “overdelivery”) once Nielsen results are in for a given campaign. Online inventory cannot be a scarce resource in the same way, since it is generated on the fly by each decision to view a page. In theory, it should be unnecessary to speak of audience guarantees at all on the Internet — an ad banner or pop‐up can simply be shown until the purchased number of impressions has been reached. (In practice the most desirable online property is often sold as sponsorships, not impressions; and even impression‐based campaigns will prefer outlets with a large enough audience to deliver the desired audience within a certain time frame.) This shift is well‐understood, of course, but what it means for media measurement has not always been appreciated. Advertisers purchasing space or time in traditional media are paying, in a very immediate way, for a set of audience numbers delivered by a trusted third party. Based on Nielsen or Arbitron figures, applying the standard formula of “reach and frequency,” a company like Proctor & Gamble can calculate (if with disputed accuracy) what it will cost, say, to make sure 40 percent of TV viewers or radio listeners in a certain market hear a Duracell jingle an average of three times each. Online such calculations are both less possible and, to many advertisers, less relevant. Neither user panels nor server‐side analytics can realistically claim to gauge the “reach and frequency” of an ad campaign across multiple sites and ad networks. Ad impressions have been decoupled from media audiences. People reading the same article online will not necessarily see the same ad banner, making the link between a media property’s reach and that of its advertisers much more tenuous. More to the point, advertisers no longer need “reach and frequency” to plan campaigns or purchase media; they no longer need a measurement currency in the same way. Marc Frons at the New York Times makes this point succinctly, discussing the disagreement between different rankings of top online news outlets. “I think itʹs less important online because advertisers can see how well the ad is performing on their end,” Frons says. “So the Nielsen number and the comScore number are just bragging rights for publishers. They matter less.”