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Friday, August 08, 2003

Metrics: Best Left to Third (or Fourth) Parties?

Kevin Lee has just published an important column about Overture's move into the metrics/analytics business. This becomes even more important now that the Keylime Software group becomes part of Yahoo, who recently acquired Overture. Lee rightly points to the history of ad serving services like Doubleclick increasingly being responsible for the tracking of ad performance. Over the years there have been grumbles on all sides of online advertising transactions, and it doesn't seem to help if one of the parties is perceived to be loading the dice.

If the publisher is the "first party," and the advertiser is the "second party," then Doubleclick was the "third party," right? Perhaps, but here, third-party is still not independent, as the middleman is helping to sell ads and may well be doubly biased: wanting to charge advertisers as much as possible while paying publishers and affiliates based on a conservative assessment of performance.

I'm not throwing out any particular accusation here, and nor, certainly, is Lee.

But we've heard good arguments in the past that a "fourth party" is really needed to properly track ad results, or to audit the company that is providing the traffic. Unfortunately, on the audit front, there doesn't seem to be a huge market demand for services of this nature (which might have been effectively provided by an outfit like ABC Interactive, the online division of the Audit Bureau of Circulations, but some time ago the online division was "folded back into" the parent company, which implies its work was being de-emphasized).

But the good news is, advertisers by and large want to install their own tracking solutions from third (or fourth?) party vendors, and are actively investigating ways of effectively and accurately tracking the performance of their ads. Ultimately, self-interest is strong enough in this sector that firms will simply arm themselves with their own defenses against potential bias in analytics.

Posted by Andrew Goodman




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