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Nielsen Wants to Take the Mystery out of Measuring Online Advertising

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Opinions expressed by Entrepreneur contributors are their own.
What do you say when someone asks how your online advertising is performing? It's a good question, but the answer can be nebulous because measuring ad results online is a difficult proposition. It's difficult to decipher what the metrics really mean and it's difficult to compare your results with another media. And then there's the accuracy issue.

No wonder businesses that utilize the internet and social media avenues often complain that online isn't getting its fair share of the advertising dollar. That's partly due to the fact that many advertisers -- and especially brand advertisers -- are reluctant to spend online because of faulty measuring tools. Metrics are at the heart of assessing how your online advertising is performing. And the current practice of gathering information and slicing and dicing the data is neither accurate nor timely.

Enter Nielsen, the company that's been following audience and advertising metrics since the 1920s. These are the same folks who brought us the famous Nielsen Ratings, a method of measuring just exactly who is watching television and what are they watching.

Last month, Nielsen announced that it has developed a new online advertising measurement system it calls the Nielsen Online Campaign Ratings. The company claims this tool can provide audience information measurements for the Web that are comparable to its better-known television ratings. And the company says it can deliver this information with greater accuracy, faster reporting and wider coverage than what's currently available.

Impressively, Nielsen has recruited some industry big hitters to help test the system, including Facebook, Procter & Gamble, Verizon Wireless and Starcom MediaVest. To turn this metric into an acceptable industry standard by next year, Nielsen is urging other online publishers and advertisers to participate in the program.

Nielsen Online Campaign Ratings is said to provide marketers with a more accurate look at their return on investment and give media companies a way to prove the value of their audience. And both will have an easier method of measuring the combined "reach" of television, the internet and mobile advertising. (Reach is the number of homes or people exposed to an advertising schedule over a specified period of time -- without duplication.)

And since reach doesn't tell the whole story, Nielsen combines the ratings with cross-platform advertising effectiveness metrics to get a complete picture. The system combines Nielsen's tried-and-true TV and online panel data with demographic information that is gathered from volunteer online data contributors (who remain anonymous). In that way, Nielsen says it can provide reach, frequency (the number of times a household is exposed to the schedule in a given period of time), and Gross Rating Point (the aggregate total of the ratings).

Here's how the program measures the audience makeup of a particular advertisement. Nielsen requests a pixel whenever a particular advertisement is displayed in a browser. These pixels travel to Nielsen as well as to approved data contributors. These data contributors provide reports with reach and frequency information in age and gender brackets -- again, anonymously. Nielsen then combines these reports with data from its TV and online panels, culminating in one report that shows reach, frequency and GRPs for the target ad. A second process matches the IP address of the pixel to one of Nielsen's 210 designated market areas.

The Nielsen system is seen as a way to provide a more accurate picture of impressions delivered by different sites to different demographics and help improve the duplication between television and online. And the company said its online system will help advertisers, marketers and websites to become more efficient at building reach and frequency among their desired audiences.

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