When Deciding Where To Spend, The Most Important Buzz Word For Advertisers Is “Measurement”, And Since Newspapers Still Can’t Quantify How Many And What Demographics Actually Look At Their Print Ads, Then Expect The Spend To Flow To Mediums That Can

Philip M. Stone November 6, 2006

The last week was full of headlines on how television and Internet advertising viewership will be better measured, but that still leaves newspapers out in the cold. Just citing circulation numbers or general readership numbers, including the Internet, is not doing the job.

That doesn’t mean that advertisers won’t still spend on newspapers, but it is one more reason for some of that spend to drift elsewhere, particularly to the Internet, where advertisers feel far more confident that there are measurement systems that can tell them pretty accurately who is looking at what and when.

And when A.G. Lafley, Chairman and CEO of Procter & Gamble, a company that spent $6.8 billion on global advertising in its just concluded 2006 fiscal year, says that he wants to find better ways to gauge whether he’s getting value for his advertising spend then the media had better listen. “What’s important to us is to be able to measure it,” he said at a recent Fortune Magazine C-Suite interview.

In 2005 P&G spent $4.6 billion on US ads, but less than 1% --some $33.5 million – went online. If Lafley wants measurement then digital is where he will find it and if his spend starts to diversify in that direction then a lot of people are going to feel real pain.

Which is why so many media companies are anxious to get their measurement act together. News Corp’s TV division, for instance, has had a very cool relationship with Nielsen Media Research for the past two years because News Corp questioned how Nielsen went about measuring younger demographics and the various races in the US. But suddenly all is fine again, and the two sign an eight-year Agreement for audience measurement services.

Gary Ginsberg, News Corp. Executive VP of Corporate Affairs, said, “We’re very pleased to put our differences with Nielsen behind us and to usher in a new era of constructive and even deeper relations between our two companies. Nielsen’s willingness to take concrete and ongoing steps (it is investing $50 million to improve performance on areas important to News Corp.) to ensure its measurement systems accurately count all viewers was critical to achieving this deal.”

And then there’s the announcement of Nielsen and NetRatings providing a new integrated service allowing advertisers, programmers, online publishers and ad agencies to capitalize on the relationship between television and the Internet.

The product combines Nielsen’s National People Meter of more than 30,000 respondents with NetRatings NetView sample that electronically tracks Internet use of approximately 29,000 panelists from homes and businesses.

The combined information gives advertisers information that includes age, sex, household income, household education and the like.

“At a time when the importance of the Internet as an advertising vehicle continues to grow and expand with new streaming offerings, it’s particularly important to understand the interaction between these two media,” said Paul Donato, chief research officer at Nielsen Media Research. “The National TV/Internet Fusion database is an advanced multi-platform measurement service that offers advertisers, agencies and media companies an unparalleled view of this expanding relationship.”

So compare all of that with the comments of a spokesman for large Houston auto dealership. “We can pretty much measure an online cost per head. But if you put an ad in the Sunday paper it will probably cost more than $2,000 and you have no idea who comes through the door because of it. We’ve wasted a lot of money that way.”

Newspapers are embarked on a campaign to persuade advertisers that they should combine the readership of newspaper web sites with the print edition for a fair idea of how many eyeballs could possibly be seeing a newspaper ad. But that doesn’t give the advertiser what it really wants. What confirmation is there that readers are actually looking at the ad, and, which readers are looking at the ads – those in the well-off part of town or those on the other side of the tracks? What is the household income, age, sex of readers?

Newspapers are slowly trying to put that information together but they still have a long way to go.

The Chicago Tribune quotes its own head of Tribune Publishing, Scott Smith, as saying “We have better readership data today than we’ve ever had,” But the newspaper also quotes Jeff Marshall, managing director of media buying firm StarcomIP saying, “Newspapers are an imprecise, blunt tool. Online advertising is more laserlike.”

And none of that takes into account how difficult advertisers find it to make a newspaper advertising buy. The National Association of Newspapers has been working for almost a year on trying to standardize newspaper advertising criteria to simplify the sale not just to one newspaper but to many newspapers, there still is not much to show for the effort.

If there is any solace for the newspaper industry it is that Nielsen has just announced it has delayed the launch of its service to more accurately measure how many US viewers watch TV commercials. The system was going to measure not just shows watched live but also those watched via digital video recorders. But the industry is not convinced that people watching recorded shows can automatically be assumed to be watching the ads, too. So it’s back to the drawing boards on that one.

But make no mistake, the longer newspapers dilly-dally in being able to give advertisers the type of measurement information they crave, the more vulnerable they become to losing some of their existing spend to digital.

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