The ratings game

Whilst business intelligence tools offer specific information about clients and the performance of an individual business' strategies, they can tell you nothing about your company's position in a wider market context.

Whilst business intelligence tools offer specific information about clients and the performance of an individual business’ strategies, they can tell you nothing about your company’s position in a wider market context.

Business intelligence services can. But they are not without their critics.

The granddaddy of them all is market researcher multinational AC Nielsen, which offers a range of services. Its approach is mostly interview or panel-based, taking diverse but relatively small groups of people and extrapolating their results to nation-sized scale.

The firm’s website ranking service, Netratings, has a volunteer panel of 4000 internet users, whose browser logs are recorded and sent back in real-time to AC Nielsen’s servers in the US. The software used, Insight, was originally developed by Toshiba for the US military - which rejected it. Insight will, it is thought, be eventually upgraded to record and disseminate a volunteer’s list of website favourites and which programs they use regularly. Users cannot turn the system off, until they opt out of the Netratings programme.

Complex and demographically detailed – though still anonymous - data is disclosed to subscribers whenever they log on. AC Nielsen also provides a number of other online services on its subscriber extranet, including ratings for media and products, website research and assessment, and the development of interactive online surveys. For many firms services such as these are their competitive advantage.

AC Nielsen group marketing director Jocelyn Hong says the services are especially attractive to multinationals, as they are broadly similar in appearance, method and functionality around the dozens of countries worldwide that AC Nielsen operates in.

Critics of AC Nielsen, and other market researchers who use a similar television-based model, such as Mediametrics, include founder of Australian-based web-traffic monitor Hitwise, Adrian Giles.

Giles, like others, believes the relatively small size of Netratings sample is problematic, and that demographic information is not as important to web companies as traffic statistics. “In an environment where there is infinite choice, a panel doesn’t scale very well, in that you only get data on the top under-one-hundred sites,” Giles says. He argues websites are simply not viewed in the same way television programmes or films are.

But Hitwise has itself come under heavy fire for its own methodology. Hitwise purchases anonymous web traffic logs from ISPs, then rank websites according to their popularity in those logs. Web developers can then charge a higher site advertising dollar based on their supposed popularity.

The privacy status of anonymous user logs is unclear, and the ownership of that data is also unclarified as yet.

Giles defends the relationships between ISPs and Hitwise: “Many of them these days are looking for ways to subsidise the cost of providing internet access, when there are new ISPs giving it away for free. So the attraction of us for ISPs is that it’s another way to offset the infrastructure costs of providing internet access.”

Hitwise has also in the past claimed that it has access to the user data of four of the biggest ISPs in New Zealand. But spokesmen for Xtra and ClearNet (the latter also representing Zfree) deny they are involved.

Hitwise’s methodology is also raising eyebrows. One source notes that web traffic logs can be easily manipulated by web designers, in order to give themselves the appearance of more "hits", by inserting frames in a website, or causing pages to auto-refresh.

Earlier this year Hitwise said it had between 500 to 1000 subscribers. Recently it downsized its New Zealand operation – to one man.

Internet research firm Red Sheriff also recently cut its local staff to one person.

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Tags business intelligence

More about HitwiseInsightNielsenRed SheriffToshibaXtra

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