Measure for Measure
Recently, I visited Quantcast, a San Francisco-based startup that is hoping to provide just such a service. Founded in 2005 and funded with $26 million, mainly from Polaris Ventures and Founders Fund, the company wants its service, which launched in 2006, to overthrow traditional panel-based Web audience measurement.
Konrad Feldman, the company’s youthful, redheaded, British-born chief executive and cofounder, met me at the company’s headquarters overlooking the Yerba Buena Gardens and the Moscone Center. In a large conference room with a cement floor, decorated according to the precepts of venture-capitalist high minimalism, he asked whether Technology Review was “quantified”–that is, whether its online visitors were tracked by the startup’s software tags. After we confirmed that our site had been quantified for some time, he opened his laptop and searched for our URL at Quantcast.com.
An elegant dashboard of audience information was swiftly served: TechnologyReview.com, it said, had 342,000 “global people” and 205,000 “U.S. people.” These numbers, which measured monthly visitors to our site, were not so low as those reported by traditional third-party audience measurement firms, but they seemed suspicious: throughout 2008, Omniture reported around 650,000 unique visitors to TechnologyReview.com every month. But we also learned that 32 percent of TechnologyReview.com’s readers earned more than $100,000 a year and that 24 percent had postgraduate degrees, which seemed about right. (A peek at Forbes.com, which is not quantified but whose numbers the startup had extrapolated, showed that the business site had 4.9 million “U.S. people,” who were richer than TechnologyReview.com’s readers, although not as highly educated. Because Forbes was not quantified, Quantcast didn’t supply Forbes.com’s total worldwide audience.)
Quantcast’s service, like that of existing audience measurement firms, begins with panels–or, more precisely, panel-like data in the form of “reference samples,” provided to the company by third parties such as market research firms, Internet service providers, and toolbar companies, among other sources. These statistical methods create a basic model of U.S. Web traffic. But when publishers install Quantcast’s tags on their servers, Quantcast gets more details; the startup adjusts for spiders and bots, people with multiple computers, and cookie flushers. The two methodologies are combined using something Quantcast calls its “mass inference algorithm,” created with the aid of two Stanford University mathematicians and refined by the seven mathematically minded PhDs who work at the company. This algorithmic analysis of panel research and server-based measurement is unique in Web audience measurement (although Nielsen more coarsely combines the two methodologies with a service called VideoCensus, which tracks online video viewing). The resulting audience information, says Feldman, is much more reliable than anything offered by ComScore or Nielsen.
“Publishers and advertisers have used panel-based research for nearly 75 years,” says Feldman. “So there’s obviously an established way of doing things. But equally, there’s a pretty clear recognition in the marketplace that something has got to change.”
Because Quantcast’s audience information is free (where ComScore’s and Nielsen’s measurements are not), the company hopes to make money by charging publishers who enroll in Media Planner, a service launched last May that helps media planners spend their clients’ cash. Although Media Planner is wholly free for now, Quantcast wants to expand the service so that it can finely describe demographic subsets within websites’ audiences, a utility for which the company believes the sites themselves will pay. Feldman explains this tricky idea: “You have a sales force at TechnologyReview.com, and they can’t possibly speak to everyone who might value your audience. But if you can expose that audience to buyers, then you can create a way whereby buyers can discover the parts of your audience they find particularly valuable.” Feldman says that Media Planner allows media buyers to find appropriate audiences, “but it’s the publishers that should pay, as they’re the ones getting higher rates for their audience segments.” More ambitiously, Feldman hopes Quantcast’s audience data, in combination with ad impressions, will create a new currency for advertisers, advertising agencies, and publishers that will make display ads more effective and therefore more valuable.