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What Is Web 2.0's Magic Metric?

SUNNYVALE, Calif. -- Banners, pop-ups, rich media, splash pages: The Web is awash in advertising. But how effective are those ads in the emerging Web 2.0 era?

Companies like comScore and Nielsen//NetRatings provide regular reports that measure such data as click-through rates and page views that detail how often people click on ads or visit Web sites. There are also consumer surveys that measure brand recognition and response to ads, much as the TV, print and radio industries have used for years.

But while that information has value to advertisers and Web site owners, the times are changing, and the old way of doing things might be, well, too old.

"I'm looking for a reliable measure of ad impressions and I don't know that we're there yet," said Peter Daboll, chief of insights at Yahoo, at an informal media briefing here at company headquarters.

Daboll, the former CEO of comScore, is well qualified to speak on the topic. He said he's hopeful new metrics that the major Internet rating agencies have developed will prove to be effective in taking the newer technologies and Web behavior into account.

"The key thing to know is how many impressions did I actually get served? How did people engage with the ad? Did they just mouse over something or show intent?"

He said surveys are imprecise because most consumers aren't good at recalling their online behavior. He recalls a study done at comScore when he was there that asked consumers what Web sites they visited.

"Typically the answer was something like 10 a month, when they actually visited closer to 300," he said.

New technology like embedded video is changing users' behavior. For example, Daboll noted users are spending more time on Yahoo's homepage because of embedded content that keeps them there. That means fewer page views for Yahoo  and others with embedded content, but it also means a lot more user engagement.

"More and more the younger demographic are bypassing the sequential view of the world and jumping to their own environment they want to see in their own way," he said. "It's great for us. The one thing we really encourage is to stop thinking about page views, because they don't tie to engagement."

Daboll also argued that Internet companies, including Yahoo's own ad network, don't get enough credit for leading consumers to purchase products.

He notes most products are purchased offline, but a lot of the research consumers do that lead purchases are done online. He said there is still too much of a "fear factor" in Madison Avenue to switch, say, a $100 million TV ad budget over to the Web even though it could be a more effective move.

He notes, for example, the 50 million users that visit Yahoo multiple times a day is higher than any primetime TV audience.

"Much of the mass media is a blunt instrument," he said. "To get the highly passionate Gatorade consumer you buy football? That's a lot of waste there."

Even targeted ads can have problems, though.

Daboll recalls an ad campaign for an anti-cellulite product that was targeted at older women. "People were so pissed off because there wasn't a good frequency cap," he said. "You need the right balance."

But the real measurement mystery is mobile. Daboll said there is nothing out there now that comes close to measuring user engagement on mobile devices.

He said one of the big reasons it's difficult is that the carriers are very worried about hanging onto their customers and don't want to allow too many things that might be considered a nuisance like an online survey. "It's virtually impossible" to get the carriers to allow it, he said.

Of course measuring media's effectiveness is an age-old problem for advertisers. Print advertisers worry about such things as the size of an ad and placement (e.g. left- or right-hand page) versus the cost; billboard companies need to measure how well their ads can be seen by a driver on the highway and so on.

Yahoo's own ad arsenal bulked up considerably on Tuesday with the announcement that it will buy online ad network BlueLithium for approximately $300 million in cash. The deal is designed to help Yahoo complement its already successful brand advertising business with a better expertise in direct marketing.