NAA Chief: Online Needs Common Metrics

NetNewsCheck: Do you think the recession has passed? How is digital faring as opposed to print?

Contreras: The way that we look at online is, from a 40,000-foot level, is in two buckets. One is revenue tied in some way, shape or form to print in terms of an upsell, and the other is unrelated to anything in print. We call that pureplay, and our pureplay revenue has grown twenty-something percent in the first quarter, and that tends to be tracking along pretty well. The portion of online that was tied to print and obviously to print classified is continuing to show declines.

It’s really a tale of two cities. We’re up 20 percent in what I think is a much more sustainable stream of revenue, which is pureplay.

NetNewsCheck: One of your NAA initiatives is rallying the industry around a more standard Internet measurement. Can you talk a little bit about that?

Contreras: Do you have four or five hours? It’s something that I am really very passionate about. Here is one of the reasons that I am so frustrated by the current environment: If you were to take our March 2010 audience numbers according to Omniture, we had about 8.8 million unique visitors. If you go to Comscore, their hybrid methodology was about 4 million. If you go to Nielsen, it was 2.8 million. So who is right?

In the case of Nielsen and Comscore’s panels, they’re using the greatest technology of the 1960s to measure the most trackable medium ever created by human kind, and it’s nuts, frankly. It’s a frustration that not only publishers share, but advertisers and advertising agencies also share.

There needs to be a group that solicits the opinions of publishers, advertisers and agencies to arrive at a set of standards and to create, a FASB (Financial Accounting Standards Board) for audience measurement. If you think about the accounting industry, there are practices and principles and standards that have been universally agreed upon and dealt with. There is no such thing in the audience measurement world, and part of the newspapers’ problem is that when the New York Times and the Wall Street Journal go to do their stories on what’s happening to newspaper audiences, they look very narrowly only at what’s happening in print because there’s no lingua franca to describe what’s happening online. There’s four or five different versions of the truth.

If you think about both print and online in combination, in most markets we’re delivering to a greater number of eyeballs than we have ever delivered, and yet there’s no way to tell that story because of the lack of standards particularly online.

NetNewsCheck: Has the media industry encountered this before?

Contreras: In the 1940s and '50s , most newspaper publishers got into the TV business, and for the first 10 to 15 years of the TV business there was rampant fraud or several versions of the truth going on when it came to measuring television audience. Eventually Congress sniffed around and said to the industry: Look folks, if you don’t get a handle on this, we’re going to regulate you. And they all shrieked in horror and they came up with this compromise, which was called the Broadcast Ratings Council, I think. It was later morphed into the Media Ratings Council, which was a quasi-public organization that’s privately funded, but had a mandate supported by Congress, and it established standards for broadcast measurement in 1963.

We went back and looked at Scripps’ television revenues from 1950 until 1980-something, and you can see a direct ramp-up in revenues shortly after the imposition of standards.

The analogy to today is that spending online - for both newspapers and anybody else publishing on the web - is being retarded because of a lack of standards relating to what advertisers are buying when they do an online buy. The lack of standards also creates disproportionately low CPMs, if you go and look at the average CPM for a national Internet buy compared to any other media, it’s one-fifth, one-tenth the amount of a legacy media CPM. And again, I think part of the reason for that is the lack of standards. It’s retarding revenue growth.

NetNewsCheck: I guess another factor in all of that is Google and others charging not for exposure or impressions, but charging based on a cost per click or a cost per action. Does your desire for unified standards extend to whether a click captures the whole value of an ad?