The Nielsen NetRatings service combines the two critical components of high-quality audience measurement: a projectable panel, and technology that accurately and completely tracks Internet user activity. Nielsen Media Research is putting together the industry's most representative panel of Internet users. NetRatings measurement software tracks web site activity, and is uniquely capable of tracking advertising activity. As a result, the new service can track advertising exposures, provide projectable demographic information on the exposures, and determine the effectiveness of advertising in reaching various demographic groups.
Under the terms of the agreement Nielsen Media Research will acquire a significant equity position in NetRatings, and two Nielsen Media Research executives will join NetRatings' board of directors. NetRatings is a privately-held company based in Milpitas, CA. Financial terms of the agreement were not announced. The agreement is subject to completion of due diligence and the signing of a definitive agreement. "By combining the expertise of our two companies, we're creating the leading source of information on Internet usage," said John A. Dimling, president and chief executive officer, Nielsen Media Research.
"Today's announcement moves the entire industry closer to the day when strategies for using the Internet can be based on accurate, reliable and consistent information. We believe authoritative, projectable information from Nielsen NetRatings will provide critical information for understanding the interactions of media, and help people more effectively use the Internet as a communications and marketing vehicle." "We started NetRatings to create and develop the best technology for Internet measurement with the goal of providing accurate, reliable information on how people actually use this vast and potent resource," said Dave Toth, NetRatings president and chief executive officer. "Our relationship with Nielsen Media Research provides the perfect way to leverage our technology and puts us on the fast track to realizing our goal." NetRatings has already begun the process of modifying its measurement software for use in the Internet panel, and the companies expect to report data in the first quarter of 1999.
Commenting on today's announcement, John Nardone, vice president media and research services, Modem Media.Poppe Tyson, said, "I am thrilled that Nielsen Media Research is getting a competitive offering into the marketplace. I look forward to Nielsen Media's methodological rigor, and hope that it can bring a unique cross media perspective to the business." The following are the highlights of today's announcement: - Nielsen Media Research will provide research expertise and will maintain the Internet panel to ensure the new service provides projectable information on Internet usage. The company will continuously monitor the Internet user population and refresh the sample to ensure it represents the most current user population. The company will continue to develop measurement solutions for emerging platforms (PC and TV) in order to be able to provide comprehensive information on the convergence of media. - NetRatings will be responsible for ongoing support and enhancement of the data collection software and reporting systems.
NetRatings will continue to operate as an independent company and continue to expand its current offerings. - The two companies will work together, and with other leaders in the industry, to develop reliable means for measuring at-work Internet usage. - NetRatings' exclusive BannerTrack(tm) information from the new service also will be integrated into Nielsen Media Research's Monitor - Plus competitive advertising intelligence service, offering customers the industry's most comprehensive view of advertising campaigns and trends. About NetRatings NetRatings, Inc., a Web audience research company, provides Internet advertisers, marketers, site publishers, media planners and Web professionals with comprehensive information about Web user interaction with Web sites and ad banners.
The company's innovative data collection technology, NetRatings Insight(tm) software, captures detailed Web usage information from a randomly recruited, statistically representative group of Web users and compiles behavioral data with in-depth demographic and lifestyle profile information. Online Observer(tm), NetRatings' market research service, enables companies and agencies to design more effective strategies to build and extend their brands, communicate targeted messages and conduct electronic commerce through the world. See www.netratings.com for more information. About Nielsen Media Research Nielsen Media Research is the leading provider of television audience measurement and related services in the United States and Canada. Its National People Meter Service provides audience estimates for all national program sources, including broadcast networks, cable networks, and national syndicators. Local rating services estimate audiences for each of 210 television markets in the U.S., including electronic metered service in 40 markets. Nielsen Media Research also provides competitive advertising intelligence information, as well as Internet and Web page usage analysis.
More information on the company is available at the company's Web site: www.nielsenmedia.com. Note to Editors: Nielsen Media Research is the well-known TV ratings company. It is separate from ACNielsen Corporation, the market research services company. This press release includes statements which may constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Nielsen Media Research believes the statements are reasonable, it can make no assurances that such expectations will prove to be correct.
This information may involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, risks associated with competition in the market for audience measurement services; the ability to develop new or advanced technologies and systems for the company's business on a cost-effective basis; the ability to timely and cost-effectively resolve any problems associated with the Year 2000 issue; the results of litigation affecting the company; the ability to successfully achieve estimated effective tax rates and corporate overhead levels; regulatory and legislative initiatives; leverage and debt service (including sensitivity to fluctuations in interest rates); compliance with covenants in loan agreements; the ability to obtain future financing on satisfactory terms; deterioration in economic conditions, particularly in the media or other industries where customers operate; and other factors detailed in the company's Securities and Exchange Commission filings.
The Nielsen NetRatings Internet Panel Design Audience Measurement - The Basics Critical components of sample based research services are: - Enumeration - Sample Design - Sample Management The quality of the information derived from the sample is directly related to the quality of the sample. The quality of the sample is driven by the above mentioned key components. Across all major media - print, radio, TV - critical decisions regarding content and advertising delivery are based wholly, or in part, upon sample-based research. Enumeration Enumerations are done to produce Universe Estimates which are used to determine who and what each sampling point represents. Enumeration studies are conducted to determine the total size of the population and used to provide projectable audiences. With the rapid growth of the Internet, it is imperative that the enumerations reflect the most current estimates of the Internet population. If projections were based on old enumeration information, estimates of traffic to various web sites will be incorrect. Sample Design For a sample to be representative, the selection process must be random. The next step is to get the maximum participation from this randomly selected sample.
This key measure of sample quality - cooperation rate - is used to judge how representative the sample is and how reliable the information from the sample is. Across all major media, research companies depend upon a mix of phone or in-person sample selection and recruitment techniques to yield the best possible sample. MRI and Simmons use Area Probability samples and in-person recruitment for magazines, Arbitron uses phones for radio research, Nielsen Media uses Area Probability and Phone techniques for its various samples. One of the key advantages of phone recruitment is that it allows for two-way interaction between the research company and the respondent. This interaction enables the research company to address any and all concerns or issues the respondent may have.
Also, to ensure that hard - to - reach households HHs are contacted, the calling can be spread over multiple days and also during different times in the day. Sample Management The Internet introduces an additional consideration - churn. Given the rapid and on-going growth of the Internet, the online population changes in size and composition more quickly than other major media. Any panel based research service has to be able to account for this continuous change in user population in their service. The Nielsen Media Research Sample - Details Enumeration Nielsen Media Research follows best research practices and has set up an independent, continuous enumeration process. Sample Design The Nielsen Media Research Internet Panel is separate from our TV panels and is constructed using a random digit dial, over-the-phone recruitment process. All active residential exchanges are included. Households with multiple phone numbers have a higher chance of being included in the panel.
These households are identified during the initial recruitment call and their weights are adjusted to take into account their higher probability of being included in the panel. Phone numbers were randomly and systematically selected with equal probability. Phone numbers are dialed and contacted households are interviewed to identify households eligible to be in the panel (households with a PC and Internet access). Eligible households are recruited to participate in the panel. Households with Internet access at home that agree are mailed a membership packet including the tracking software and installation instructions. Eligible households that refuse to be in the panel are contacted again to seek their participation. Repeated attempts are made to ensure that all eligible HHs are identified, contacted and recruited.
Households with Internet access at home that do not agree to participate, households without Internet access or non-residential phone numbers are attempted again in six months. Non-working or non-contacted phone numbers will be attempted again in one month. Sample Management Sample management has at least three components: 1. Ensuring ongoing cooperation from existing homes 2. Bringing new Internet homes into the panel 3. Ensuring that new phone numbers are included in the sampling process Nielsen Media Research calls our panel members once every two months to thank them for being in the Internet panel and to identify and address any issues they may be experiencing as a result of their participation. The call is also an opportunity to determine if there has been a status change in the household.
A status change would be triggered by the purchase of a new PC (especially important during holiday seasons) or change in household members (children going to school, etc.). An on-going challenge is to ensure that a sample, once constructed, continues to accurately represent new users. Nielsen Media re-contacts all non-eligible HHs during recruitment every six months to keep track of status changes. HHs that have acquired Internet access during the intervening six months are invited to join the panel. This critical process is the only way to ensure that the sample continues to reflect the ongoing changes in the Internet population. Newly created exchanges will be identified three times per year and phone numbers will be selected from these exchanges using the same sampling rate. Eligible households among these phone numbers will be recruited to participate in the panel.
Workplace Tracking In addition to accurate data on household Internet use, the industry has expressed a need for information on Internet usage at the workplace. Nielsen Media Research and NetRatings will work together, and with other leaders in the industry, to develop a high-quality workplace panel. Assembling a workplace panel, however, presents significant research obstacles beyond those encountered in creating a household panel. For any panel to be representative, for example, each member of the population must have a known probability of selection. After selection, research companies need to achieve a high level of cooperation to preserve the randomness (and therefore representativeness) of the panel. In the workplace, because there are multiple levels of cooperation required for setting up a workplace panel (including panel members' manager, and IT and HR department), the initial quality of the panel (as defined by cooperation rates) is compromised. In addition, different types of companies and organizations have varying policies controlling installation of third party software on individual desktops.
For example, concerned about security, financial companies have restrictive policies about the installation of any software on the employees' PCs. Government agencies usually prohibit the installation of any software on their PCs. Because of policies such as these, establishing a representative work panel will be difficult to achieve, and attempts to create large workplace panels that do not represent the workplace population as a whole will compound bias in the research. These issues must be addressed as workplace measurement is pursued. Nielsen Media Research and NetRatings will work to define approaches that are likely to provide the industry with a high quality work panel. We will be seeking input from key industry players and providing the industry updates as we make progress in this area. In Conclusion Nielsen Media Research and NetRatings intend to provide the marketplace with high-quality, reliable data on Internet usage based on sound research practices.
The process outlined above is the most elaborate attempt, to date, to construct a high quality, representative online household panel featuring random selection and continuous sample management to ensure on-going representativeness. The resulting panel will offer the most accurate information on Internet activity. NetRatings: Web Activity Tracking and Reporting Technology NetRatings technology is heralded in the industry as the most comprehensive Web activity tracking and reporting system on the market today, and is unrivaled in its ease of use and flexibility of information delivery. In the development of its Insight (tm) tracking software, and Online Observer service, NetRatings pioneered the following capabilities: - Advertising banner tracking and reporting and related audience statistics - BannerTrack(tm) - E-commerce activity and related audience statistics - CommerceTrack(tm) - Weekly activity reports - Automatic collection of user activity information in real-time - Reporting of page views served from browser cache - CacheTrack(tm) Activity Tracking Technology The NetRatings Insight tracking software has several advantages over other approaches which are key to delivering the most accurate and useful information, including: - Most Accurate: Our Java proxy architecture means we "sit in the datastream" which allows us to collect an unobstructed log of all Web activity.
Java-based software also means that regardless of platform (PC, Mac, UNIX) the same data is collected in the same way ensuring consistency in recorded activity. - Actionable Information: Today, advertisers and marketers are looking for more than page views and unique audience statistics. Our tracking technology delivers the unique ability to automatically measure ad banner viewing and clicking (BannerTrack(tm)), e-commerce activity (CommerceTrack(tm)), cached page views (CacheTrack(tm)), and page loading times. These metrics provide a much more comprehensive view into the audience interactions with the Web. - Unobtrusive Tracking: Key to any research is to be as unobtrusive as possible so as not to bias measured behavior.
NetRatings Insight requires the absolute minimum in panelist intervention once installed. Software updates are also automatic allowing functional enhancement without panelist action. Our real-time activity data uploading design also puts a minimal burden on system and user resources - no large history files on the user's system, no floppy disks to mail back. - Secure, Safe Tracking: All panelist activity data is automatically encrypted prior to transmission to ensure complete security for the panelist. - Quick and Easy Portability to New Platforms: New Web access devices will need to be tracked as they become popular. Developing new software for each device will become problematic for those not using Java. Our Java architecture allows for easy portability to devices such as Web TV, set top boxes and other platforms who have embraced Java.
Reporting Technology Essential to high quality, high utility information delivery is the design of the reporting system. We have chosen a flexible, Web-based reporting interface to allow maximum subscriber interaction with the information. - Most Timely Information: Up-to-date information is critical to tracking changes on the Web. The NetRatings Online Observer reporting system is the only service to publish weekly, as well as monthly data. Our real-time data collection makes overnight reporting a near-term reality. - Easiest to Use: Information is organized in consistently formatted, easy-to-use tables with extensive drill-down capabilities and search utilities making it easy to find any data. Additional custom queries are supported via template-driven, menu style interface, reducing the need for expensive custom data cuts, and putting more information power in the hands of the subscriber. Online help accompanies all tables, and all data tables are easily printed or saved for export to other applications. The Web-based design ensures 7x24 access to information regardless of the user's location.
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