September 18, 2006

Measuring Online Traffic

If you’re trying to find out who operates the most popular news website, the question may be harder to answer than you think.

A debate continues to play out in the online world over the accuracy of the numbers measuring traffic on Internet sites. One controversy has involved Forbes.com and its claim to be the most popular business news site, something with which Dow Jones, among others, disagrees. AOL at times has also felt undercounted. The issue is starting to get press attention, too, in the New York TImes, on Slate and elsewhere.

Looking at the data, there is often considerable divergence between the traffic numbers compiled by the two leading online metrics companies, Nielsen//Net Ratings and comScore.

Unique Audience for Select Online Sites, August 2006

 

Nielsen//Net Ratings (in millions)

comScore

Yahoo! News

29.2

33.8

CNN

23.6

21.8

AOL News

16.7

20.3

The New York Times

12.3

8.9

(Source:Nielsen//Net Ratings; comScore Networks, Inc.)

At first glance, the economic implications of these differences would seem significant. Media outlets have traditionally sold advertising based significantly on the size of their audiences as audited by outside measuring organizations.

But do total audience numbers still hold the key to economic success in the age of new media? For a number of reasons, the answer may be a qualified no.

The Methodological Challenge

To begin with, experts say almost any measurement system used to gauge a site’s online audience is problematic. Rich Gordon, a professor at the Medill School of Journalism at Northwestern University, argues some online metrics tend to inflate the number of unique visitors and undercount how often they visit.

Both comScore and Nielsen measure traffic by assembling panels of online users that are supposed to be representative of the general online population. But there are questions about how representative those panels can be—especially during working hours when online use is heaviest. In order to participate as a panelist, one must install software on the computer. But some offices and government agencies forbid their employees to install such software. This is also true for many universities, Paul Boutin wrote in Slate this February.

Another way of measuring is through telephone surveys that track usage by asking people to report their own online behavior. Critics argue these can be skewed because it relies on people’s memories (and honesty) as well as their patience for answering questions. And the sample for web-based surveys may be heavily biased toward those who are already using that site.

For those familiar with other media, all this may sound familiar. People have raised questions for years about the methods use to measure TV ratings, newspaper circulation and radio listnership. Measurement systems for all media are “flawed,” Gordon, for one, contends.

But one thing is that distinguishes online is that no one company, or system, has emerged yet as a defacto industry standard.

Does Size Matter?

Another question is how important raw online usage numbers are at all. Some analysts doubt that the size of a site’s audience should be considered the most significant factor for advertisers to consider. They argue that an environment where advertising can be more targeted, demographics are more valuable. In other words, the issue may not be quantity but quantity and quality.

There is also the matter of engagement. While millions of unique visitors may visit a site each month, the length of time they spend may be important. The Poynter Institute’s Rick Edmonds questions how valuable it is for advertisers if the average time spent on a site is just 30 minutes per month (or less), as it is as some major newspaper sites.

The Best of Times

For now, there may be one other reason, besides methodological questions, why there hasn’t been any more clamor to standardize online traffic measurements. Advertisers are happy. Data from the Interactive Advertising Bureau showed that online ad spending in the first quarter of 2006 increased 38% over the same period last year–and last year was up by about a third from the year before that.

According to Greg Harmon, Vice President of Belden Interactive at Belden Associates, a market research company based in Dallas, as long as online advertisers continue to receive what they deem as relatively inexpensive ad rates they’ll be satisfied with their investments.

So whose numbers will prevail in the online world? Eventually, one system may be settled on. For the moment, there seems no rush to do so.