Contact: Ephraim Cohen at

cohen@fortexgroup.com

or +1-917-215-5413www.ctdigitalmedia.comorwww.fortexgroup.com

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On May 22, 2009, the CT Digital Media Business Network hosted a breakfast roundtable to discuss thechallenges and potential solutions for digital media measurement and monetization. The debate, led bythought leaders Bruce Haymes, SVP of product research for Nielsen, and Jonathan Yarmis, formerly ananalyst with Gartner research, took several interesting turns. Not only was the importance of

“engagement” question

ed, but the industry conversation about engagement was cited as a top problemconfronting the digital media industry as it searches for methods and technologies to resolve thechallenge of adequate measurement and monetization.This document outlines both the questions and potential solutions raised by roundtable participants.The order in which the points are presented is intended to illustrate how the group came to a generalconsensus on several key issues while acknowledging the enormity of the challenge.

K K eey y DDi i ssc c uussssi i oonnP P ooi i nnt t ss

One of the biggest challenges in the ability to measure and monetize digital media is not an issue of technology, but rather the way in which the industry has been discussing the challenge itself. Anaccurate, smart discussion is needed in order to move toward effective solutions.

•

The tendency to focus on engagement and behavioral targeting can prove to be a double-edgedsword, as these are not always the most effective approaches

The predominate industry conversation often confuses several areas, thus more care needs tobe taken in the discussion of when it is more appropriate to spend money on branding versusdirect marketing/response as well as instances when those initiatives and expenditures shouldbe combined.

The continuation of mass media is necessary to realize the full monetary potential of onlinemedia, thus the preservation of mass media is imperative

•

The concept of branded networks such as those available on television may prove a successfulmodel for online media as well

Digital Media Measurement and Monetization Roundtable Notes

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TV can be perceived as a walled garden that delivers controlled, predictable targets, while the webhas a significantly more fragmented and demographically diverse audience. This is not likely tochange.

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In order to fully monetize digital media, measurement firms must find a way to determine audiencebehavior across all digital media

A ALLi i sst t oo f f C C hhaal l l l eennggeess

While it is clear that there is a long list of challenges that must be confronted in order to solve the digitalmedia measurement problem, the group divided them into several categories.

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Technical challenges: A prime example of a technical challenge confronting digital media content isthe lack of ability to ensure proper. A related issue is the presence of infinite denominators. At atime when TV has always been a finite and predictable resource, making it easier to track contentfrom its source, the online world has the capability for infinite, unpredictable content and contentsources. As a result, reliable tracking becomes a major issue.

•

Measurement sciences: For online media, data collection, or how to calculate an audience remainsproblematic. The tradition panels approach is no longer sufficient. Hybrid approaches, such aspanels plus ISP data, are currently being pursued, but there is no widely accepted methodology forcollecting data as of now.

•

Ecosystem and economic model: Digital media is still subject to platforms with little ecosysteminfrastructure. While mobile is a good example of an ecosystem that developed in an early stage,tracking digital media usage across screens requires stronger technical ecosystems andmeasurement methodologies applicable across all three screens.

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Comparing the TV and online world was an inevitable part of the roundtable conversation. Participantsall seemed to agree that online media may never be like TV. In the online world, there are not onlythose infinite sources of content, but information must also be measured frequently in real time,otherwise it may become useless. Of course, should TVs become just a very large screen for the onlineworld, it may be a situation where TV viewing measurement becomes more like online contentmeasurement.

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Effective resource allocation requires knowing where to find the right people at the right place and atthe right time. Realizing the full monetization potential of digital media requires effective measurementsolutions that go beyond the need to measure infinite resources and viewing across three screens

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theyalso have to aim for measurement in real time, or else proper resource allocation becomes impossible.

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There are a few thoughts on how measurement and monetization may be able to work together in orderto change the marketing and content industries. One idea thrown out by roundtable participants wasthat ad agencies may increasingly form solutions implemented across their own advertising networks.So, instead of running ad buys on other people

’

s networks, they would offer ad buys on their ownnetworks and have the content distributors sign up directly with them.

Digital Media Measurement and Monetization Roundtable Notes

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The science of measurement has gone beyond a point where branding is the focal point. It must nowalso include direct marketing and direct response (but

it’s up to marketers to determine when it is

appropriate).

While roundtable participants couldn’t agree on some facets of measurement –

for example, some

complain it’s too fragmente

d and want it to be more like TV, while others argue

it’s

already too muchlike TV. They did agree that measurement objectives need to be clear, if not, measurement becomestoo fragmented.Participants also felt the definition of brand and brand measurement may keep evolving. If this is thecase, the best solution will not be static, but rather dynamic, in order to keep up with these changes.

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The issue of privacy was only briefly raised, as many at the table, while acknowledging their own privacyconcerns, seemed to see it as more of an issue for the current generation that is not accustomed to

online privacy…or

the lack thereof. As one person queried,

“D

id we complain about privacy with creditcards?

”

With the next generation of web users, this issue may eventually become non-existent.

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Previously, direct marketing and branding were seen as two distinct areas. Now, businesses areattempting to combine them, possibly costing everyone more in the long run.Successful direct marketing can also be successful branding (for example, the Shamwow), this is notalways the case. Direct marketing and direct response are about engagement, while branding is notnecessarily so. If the marketing investment is focused on direct marketing, it could result in giving awaythe branding value of the investment.

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Participants agreed that a complete focus on engagement can become a double edged sword that

posses’

incredible risk to the industry by putting it in a corner and eventually killing mass media.

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While not every company should concentrate on branding nor should every company focus on directresponse, some should do both. While long term or image-directed results are generally more reliant onbranding, effecting short term decisions may be best achieved by a combination of the two.Furthermore, branding is often more effective for premium products, while direct response/directmarketing is for commodity products. The economic climate also should be considered. In the currentrecession, marketers need more justification for ad spending, so direct marketing/direct response mayprove to be the better strategy for campaigns.

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The roundtable participants also explored the impact of social media and how best to target thiscategory for marketing. The main question was whether we should stop looking at large scale, massoutreach campaigns and instead, focus on the power of the influencer consumer. In digital media, it isthese consumers that drive communications, and online, their power has been magnified. Social mediavalue may also not exist in marketing/PR, but in measurement. For example, the first application out fortwitter is intended to measuring influence.