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Everyone hates ComScore

Posted by Internet Guru
September 26, 2008

By Jessi Hempel, writer

Last winter, when Google lost a third of its market value, analysts blamed a small web-research company based in Reston, Va., called ComScore. The firm had issued a report that said Google’s domestic paid clicks – the number of times people click on an ad – had flattened. Analysts initially went berserk. Oh, my God! they gasped (we’re paraphrasing here). Google’s ad business is tanking!

Or maybe not. In April, Google (GOOG, Fortune 500) announced a 30% rise in profit, and analysts surmised that the business wasn’t tanking after all. One analyst opined, “The ComScore data have caused a lot of angst and anxiety for investors that look largely unfounded.” Over two weeks Google’s shares rose 17% – and ComScore’s fell 24%. Trust us: Few people in the media business wept for ComScore.

Meet the Internet company everyone loves to hate. All media have de facto measurement authorities – in TV it’s A.C. Nielsen; in radio it’s Arbitron. The web has ComScore (SCOR) – and its services will run you about $28,000 a month

on average. (Actually the web has Nielsen NetRatings too, but ComScore is bigger.) Beermakers, carmakers, and every other business that wants to advertise on the web buy ComScore data to make decisions on where to spend their dollars. Media sites such as CNBC.com (GE, Fortune 500) and NYTimes.com (NYT) pay ComScore to find out who has what market share and, in some cases, to understand their own traffic.

“When P&G tells you that you it won’t advertise on your site until you hit a number on ComScore, you have to ask, ‘How can I improve my ComScore numbers?’” says John Battelle, founder of Federated Media, an online-ad network based in the Bay Area.

That makes it the referee of the $25 billion (and growing) game of web advertising. And like refs everywhere, ComScore drives the players nuts. The main complaint: ComScore undercounts audiences. CNBC.com says its high-net-worth audience is lowballed. Niche sites like Digg and Yelp gripe that their audiences go almost entirely unaccounted for. Read More

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