In the field of tracking and reporting on Internet activity, there’s no more prominent name than comScore. It was founded in 1999 to track and report on ecommerce activity and, now, comScore has diversified to track online advertising, socializing, searching, and much more. It’s also a publicly traded company. In this Quick Query, comScore’s director of industry analysis, Andrew Lipsman, talks about how the company knows all of that information.
PeC: What is comScore?
Andrew Lipsman: “comScore is a digital market intelligence provider. We measure digital activity across the Internet and across the mobile landscape, and we provide that information for 1,200 clients who use it to optimize their digital performance.”
PeC: How does comScore gather the information cited in its press releases?
Lipsman: “comScore’s information is fundamentally derived from a global panel of 2 million people who opt in to our panel and download a piece of software that allows us to understand all of their digital behavior in an anonymous way. We are only concerned with understanding what their consumer behaviors are, not who the individual person is, so we always respect their privacy.”
PeC: How do you find those 2 million people?
Lipsman: “We recruit very broadly across the web, across all sorts of sites, and we use a variety of different incentives that will appeal to different people. One incentive we offer is that we will plant a tree in a third-world country for every month that a person is in our panel. We also offer a variety of other web-related incentives like games, screensavers, and data storage.
“The purpose of recruiting that way is so that we truly offer something that’s for everybody, and as a result we’re able to attract people of every different demographic composition. Then, based on this large sample, we’re able to project the behavior of the people in our sample to the larger Internet audience.”
PeC: Do you also pay the participants?
Lipsman: “We don’t pay them. It’s an exchange of the nominal incentive for them providing the information for market research purposes.”
PeC: Why is it 2 million? Why not 10 million, or 200 million, or 2,000?
Lipsman: “Well, you can report on broader behavior from much smaller samples, but the beauty of being able to recruit online is that you can actually get a significantly larger sample of people, which enables the reporting of many different behaviors at a higher level of granularity. So, we’re constantly building out our sample, especially globally.
“Right now, we have about 1 million people in the U.S. and another million people worldwide, and our sample will continue to get bigger and give us more capabilities for reporting in those other countries. But, there’s always a balance of the cost associated with having a panel and the level of information that you need.”
PeC: comScore has more than ten years of experience in ecommerce tracking. In your view, what will ecommerce look like in five years?
Lipsman: “comScore to date is the only company that tracks ecommerce, and we are founded to be a market research company that could track and report on this emerging behavior. In the early days of the Internet, the number of people who actually purchased online was so small that it required a really big sample in order to be able to project that behavior to the total Internet population. Now, ecommerce is a significantly bigger activity than where it was ten years ago, and so with each year as ecommerce grows, we continue to see that we have the ability to look at much more granular detail in that space.”
PeC: You see ecommerce continuing to grow?
Lipsman: “Yes. In the past several years, we have seen growth rates in the 20 to 25 percent range annually. Within the past year or so, those growth rates have curtailed significantly due to the broader economic environment. So, all of retail spending is hurting, as is ecommerce. But ecommerce is doing better compared to bricks-and-mortar retail business.
“Now, what’s underlying the current trend (which is that growth rates have gone from being about 20 percent to roughly flat) is actually an increase in the number of online buyers; but the average person is spending less per buyer. So, the broader economic environment is depressing how much the average person is willing to spend online. But what’s important to know is the fact that the number of buyers is increasing. This tells us that this is still very much a growth channel, and as the economy rebounds, we can expect growth rates in this channel to continue — maybe not at the 20 percent range that we have been seeing, but double digits is certainly well within the realm of possibility.”
PeC: Tell us a little bit about comScore.
Lipsman: “comScore was founded in 1999. It’s a publicly traded company that is not owned by any larger conglomerate. Our money is made through doing independent consulting projects for companies, as well as through a variety of subscription services that we offer.”
PeC: Tell us about the services that you provide for your clients.
Lipsman: “We offer a range of subscription services known as Media Metrix that monitors website visitation across the web. We also have Video Metrix, which monitors video usage and video consumption. We have qSearch, which looks at the actual search behavior. We have Ad Metrix, which monitors online display advertising from both the publisher and advertiser viewpoint; and a range of other services.
“All these different services [report] the important behaviors that are occurring online that businesses are really founded on. When our clients subscribe to the service, they are able to pull the information for a given service across a whole variety of metrics.
“For example, with Media Metrix, if they want to see how many people were visiting Facebook in a month, they could see how many unique visitors, they could see how many total page views, they could see per person metrics like how many visits per visitor; and, through all these different metrics, they can get a really nice, rounded-out picture of what that specific behavior looks like for a given site or entity.”
PeC: Anything else on your mind for ecommerce merchants?
Lipsman: “Right now it’s definitely a tougher environment for retailers, but being online is the place to be and it’s certainly the growth channel for retail and the underlying trends. The number of people who are coming online to buy is still very positive. So, I think there definitely will be brighter days.
“Another word of advice is that, within the industry, there has been a long-held obsession with using clicks to measure performance, especially among retailers who, say, advertise on Google. And clicks are very important when it comes to search marketing. But, for those ecommerce merchants who also engage in display advertising online, my advice would be to think about investing a little bit more in that, because the brand value is very strong and has ways of driving commerce activity either immediately or latent, and also both online and offline for retailers who may also be offline merchants. So, online advertising really gives the best bang for your buck, and it’s something that most merchants should be looking at and exploring ways of optimizing their online campaigns.”
PeC: It sounds like you’re saying not only pay-per-click, but also general branding.
Lipsman: “Exactly. There are cases where you can pay for display ads on a cost-per-click [CPC] basis, so you’re only paying on the click-through. So, if I’m an online merchant, it’s in my best interest to do a CPC campaign where I have a branding ad, because I can get all the free branded exposures without ever driving a click.”