New enterprise will keep finger on internet pulse

By Helen Vause

Advertising on the internet has been like lobbing a custard pie into space and wondering what it hits. Surfers pass by but do they really notice?

Meanwhile, the net as a new medium is bolting away with much faster growth than expected, with more and more companies going on line, more consumers going on line, and very significant advertising expenditure.

A forecast of $US2 billion dollars for this year's global ad spend on the net has long been revised to be more like $US3 billion. Outside the US, New Zealanders are right up there using the net - 54 per cent have access and latest figures show about 32 per cent are using it.

Web advertisers have been able to track how many users do, and don't, click on their banner ads and get general information such as the user's country or where they've been surfing before viewing the ad message. But what's missing is more detailed demographic data and information about web surfer habits.

That's about to change with the launch of ACNielsen's NetRatings Service, the first global service for measuring the internet. With new customised software, the service will track audiences, advertising and user activity on the internet in much the same way a people-meter does for television.

NetRatings has been running in the US and Canada since earlier in the year and will be rolled out in New Zealand by the end of the first quarter of next year. Overall, the service will be launched with an investment of $50 million to 31 countries.

Getting a far more detailed handle on the performance of the internet as a communication and advertising medium is overdue and is a very significant step forward in media and market research. Unlike with traditional media, where audience research is established, the advertisers themselves become the publishers in the direct and personal medium of the internet.

Not surprisingly, uptake of the service has been fast since it became available in the US, said Brian Milnes, managing director of ACNielsen's new service in New Zealand.

"Until now the medium has been a vacuum in terms of hard data. Yet companies have made very significant investment in it without information. Many are paying as much as a hundred thousand dollars for a good web site without having available the sort of data we have on other advertising mediums," he said.

On-line advertising has the ability to target segmented audiences with sophisticated strategies and in turn businesses will need greater insight into their markets so they can recognise key patterns and adapt quickly.

"Until now advertisers may have had basic data but no demographic information, none of the important details that make up target markets," he said.

"A system for measuring consumer behaviour in response to the internet is a very valuable marketing tool."

Mr Milnes said the NetRatings brand was expected to become the global industry standard by which internet site publishers, media buyers, marketers and advertisers measured traffic.

The NetRatings software has the ability to track internet usage, and visitor interaction with advertising banners. It provides information on the number, frequency and duration of visits to specific sites, detailed data on exposure to ad banners and user profiles by age, gender, education, occupation, income and ethnicity.

Households participating in the research panels will have software installed in their computers to collect data. Consumer panels will also provide data on the impact of net advertising on their purchasing patterns through off-line retail channels.

"At this stage e-commerce is just the tip of the iceberg," Mr Milnes said. "Beyond e-commerce transactions we know that many consumers browse on the net to do their homework before they go out and make a purchase."

Through NetRatings it will not only be possible to get in-depth research on your own site but on the site of any other competitor locally or in many other parts of the world.

"It will be possible to take a good look over your neighbour's fence and see what he is doing that you are not," Mr Milnes said.

"For example, a company here will be able to look at information from the sites of companies in the same business to gain real data. This ability to make close comparison on performance, strategies and consumer behaviour will provide valuable new yardsticks and the sort of competitive overview that hasn't been possible until now."

In the US, this aspect of the service had seen many operations change their strategies on the basis of access to performance data from a competitor's web site. American feedback, Mr Milnes said, showed that consumers were responding differently to the web sites of competing organisations in the same business - banks for example. Although the offers were essentially the same, consumers responded differently to the offers according to how effectively they were presented.

Before the film The Blair Witch Project opened in the US, NetRatings gathered detailed data on public response from the associated web site which was then effectively used for marketing and promotion. Similarly, when Hurricane Floyd hit, the service was able to track and report very quickly on consumer interaction with weather and information services.

Mr Milnes said uptake of the NetRatings service had been fastest overseas in the financial sector, the travel sector, software companies and telecommunications, and he expected that the pattern would be the same here.

"The finance community will be able to track all sorts of activity and to react more quickly. For example, when the new venture Flying Pig (Whitcoulls, Bond & Bond, Noel Leeming) launches on-line, NetRatings would allow monitoring of whether it is in fact flying and a rapid understanding of its investment potential," he said.

Advertising agencies the world over have been struggling to get to grips with the internet. It is expected they will welcome quality research on the medium.

As Mr Milnes points out, the net is already pushing agencies into new thinking and new specialist web agencies are setting up shop.