Magazine article Marketing

Internet: Is Online Undervalued?

Magazine article Marketing

Internet: Is Online Undervalued?

Article excerpt

Online advertising is on the up. In 2003, it overtook cinema advertising for the first time, with a 2% share of the total UK market.

This is clearly good news for the online industry, but if the web is to take its place alongside TV, print and other traditional media as a proper, grown-up communications channel, then advertisers need to feel confident that the statistics on which their media decisions are based are robust and accurate.

Yet this is often far from the case, according to eCRM company RedEye.

Last year, RedEye undertook a study of the traffic on two of its clients' websites, and, over a 28-day period.

The majority of page requests on these two sites are made by existing, logged-in customers, so RedEye was able to use this data to compare the actual number of visitors to the sites with the number of visitors counted by the websites' IP (Internet Protocol) and cookie-based server logs.

RedEye found the IP logs inflated visitor numbers by 660% and cookies by 128%. This, the company says, could lead a website to underestimate its conversion ratio of visitors to customers by a factor of 7.6 times.

Thus a site converting 10% of visitors to customers could be reported as 4.3% by a cookie-based system and 1.3% by an IP-based system. Given that most sites use one of the two approaches, it is likely they are more effective at driving sales than they are being given credit for.

There are good reasons why both approaches are prone to a degree of error.

IP-based logs rely on the IP addresses assigned to each visitor to a website.

Since internet service providers (ISPs) assign these addresses dynamically, the same person can be picked up as three separate visitors on three separate visits, or even as multiple visitors during a single session, if they are assigned with new IP addresses during that period Cookie-based logs are more accurate, but these can be skewed by web users who delete cookies.

Once they do so, they are identified as a new user, even if it is a site they use regularly.

'The research has put a definite number on a problem a lot of people were aware of,' says RedEye chief executive Paul Cook. 'It also illustrates the differences between the objectives of companies' commercial and technical teams. The majority of companies still use an IP-based system for measuring traffic to their sites because a lot of marketers do not understand or feel the need to care about the methodology.'

Efficiency needs

Most online practitioners seem aware that there are flaws in the methods used to measure web traffic. Sites that require a log-in can measure the number of visitors most accurately, as the identity of the user can be checked, and in effect, 'de-dupe' the logs. But relatively few sites operate such a device.

'The industry has always known that there's a problem identifying visits and visitors,' says Mat Morrison, consultant at design agency Tonic. But, he adds: 'We hardly ever need the most accurate and exhaustive data to run efficient businesses; bricks-and-mortar retailers don't measure with any precision the number of visitors through their doors, and only a few bother to track repeat custom. Off-line publishers, studios and broadcasters can make efficient business decisions using nothing more than sample data.'

As long as online professionals understand the limitations of the technology and plan what they want to measure and why, Morrison argues, they can still make informed decisions.

Conrad Bennett, technical service manager for EMEA at web analytics company Webtrends, concedes that online measurement is an inexact science. 'Anyone looking for absolute values will in most cases be disappointed,' he says.Beyond the numbers, he adds, firms look to online metrics to tell them not just how many people are using the site, but factors such as what they do when they get there and how they landed there. …

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