Facebook Standards PWC Report

IAB Online Ad Measurement Study
December 2001
The Interactive Advertising Bureau (IAB), the Media Rating Council (MRC) and the Advertising Research
Foundation (ARF), along with PricewaterhouseCoopers are pleased to present the Online Advertising
Measurement Study. This report aggregates data and information compiled by PricewaterhouseCoopers from 11
participating companies identified and selected by the IAB.
The 11 participating companies include a cross-section of the key industry players -- portals, destination sites, ad
networks and third-party ad servers -- which combined represent nearly two-thirds of total industry revenues.
3rd Party Ad Networks / Ad Servers
Avenue A
DoubleClick
Engage
Portals
America Online
Lycos
MSN
Yahoo!
Destination Sites
CNET
Forbes.com
New York Times Digital
Walt Disney Internet Group
PricewaterhouseCoopers would like to thank all of the participants and their companies for their contribution of
valuable time spent in the development of the IAB Online Ad Measurement Guidelines. We appreciate the
support that the participants provided us to complete this study.
The overall purpose of this project is to determine the general source of measurement and reporting differences
between the aforementioned industry players. The project findings in this report include a summary of those
discrepancies found and contributing factors, in addition to recommendations designed to address the
discrepancies in measurement and reporting of online advertising data.
This study was conducted independently by PricewaterhouseCoopers on behalf of the IAB. The report
aggregates the findings generated from over 60 interviews with management responsible for key aspects of the
online advertising process, in addition to validating leading online advertising metrics against definitions via
scripted testing. This consulting report does not represent an audit as described by the AICPA.
The IAB/MRC/ARF have reviewed the results and proposed recommendations, subsequently worked with the 11
participants and other key constituents (e.g., AAAA) to develop a set of Industry Measurement Guidelines. The
Guidelines represent a consensus of acceptable practices, and will be distributed to the industry at large on
January 15, 2002 to adopt on a voluntary basis.
2001 PricewaterhouseCoopers. All rights reserved.
2
Table of Contents
Background and Scope
Page
4
About this Report....
Detailed Findings
Metrics & Definitions...
Processes & Controls....
6
33
Recommendations
Metrics & Definitions...
Processes & Controls....
44
47
Appendix..
49
Background and Scope

The primary objectives of the IAB Online Ad Measurement Study were to:
review the current measurement criteria and practices used by a representative group of sell-side
companies for online advertising and audience measurement reporting
document and report the comparability of existing metrics used by the industry
propose a common set of industry definitions and guidelines for data analysis and reporting
The scope of work consisted of:
coordinating and working with 11 participating companies identified and selected by the IAB
three 3rd party ad servers / ad networks
four destination sites
four portal sites
scheduling and conducting on-site interviews with appropriate business unit management to
understand and document each participants online advertising measurement and reporting system:
what types of audience and advertising data are measured
how the data is measured and how it is reported
performing scripted testing to assess whether the participating companys collection and reporting
systems track audience and advertising metrics in accordance with the companies definitions
determining discrepancies between definitions, editing procedures and reporting, and follow-up on
testing issues
Our work focused on specific metrics and ad formats:
a comprehensive list of audience measurement and ad delivery metrics was documented
scope of this study focused on the five metrics identified on page 7 of this report
five metrics were tested, with an emphasis on ad impressions and clicks

4
Background and Scope -- About this Report

A fundamental premise of this report is that in order to achieve reliable, accurate and
comparable ad campaign measurement reporting, there must exist a set of standardized
metric definitions that are applied to a well-controlled process.
Standard Metric
Definitions
Well-Controlled
Process
Reliable Ad
Campaign
Measurement
Reporting
Refer to pages 33-41 for additional information on the concept of how a well-controlled
process manages the risks inherent in high-volume, low-dollar transactions -- hallmarks of
online advertising management systems.
This study focused on specific audience measurement and advertising metrics. There are,
however, many other metrics and related research aspects that were not addressed, but can
be identified through the work of various industry organizations (e.g., MRC Minimum
Standards for Media Rating Research).
Detailed Findings: Metrics, Definitions, Audits

Online Ad Measurement Study
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Five Primary Metrics Measure and Track Audience and Ad Transactions

Top Metrics
Leading Ad and Audience Measurement Metrics
Based on responses from participants, the top five

metrics used consistently for ad delivery reporting
and audience measurement include the following:
11
11
11
10
10
10
Ad Impressions
Clicks
8
8
Unique Visitors
# Participants
Total Visits
Page Impressions
Although other metrics exist, they are not uniformly
defined or utilized. For example:
time spent on page
number of completed user registrations
conversions
6
5
4
3
2
1
0
Ad
Impressions
Clicks
Unique
Visitors
Total Visits
Page
Impressions
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Ad Impressions are the Dominant Currency Metric for Ad Revenues

Ad Impressions are the dominant Currency Metric
Currency Metrics
While all five of the key metrics are tracked and reported,
Ad Impressions are the dominant currency metric (metric
upon which revenue-generating contracts are based).
11
Clicks as a Currency Metric
10
Only participants using a Cost-per-Action pricing model

base contract revenues on click results. Three of eleven
participants use Cost per Action.
11
9
8
7
# Participants
Page Impressions - Secondary Currency Metric

In addition to ad impressions, one participant uses page
impressions to track transactions where advertisers pay for
embedded content or sponsor a page.
6
5
4
3
Other Currency Metrics
Other less common currency metrics include email ad

metrics (e.g., subscribers, messages delivered, message
opened) and ad metrics based on user actions (e.g.,
conversions and referrals).
2
1
0
Unique
Visitors
Total Visits
0
Ad
Impressions
Clicks
Page
Impressions
Ad Impressions
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Ad Impression Measurement: Server Initiated and Client Initiated

The measurement of an ad impression transactions requested by a server or a client (browser) is tied to the process
used to request the ad. Listed below are definitions of the two ad measurement processes that result from server or
client initiated ad impression requests.
Server Initiated Measurement
This process occurs when a web server, prior to serving a web page to a user agent request (browser, robot,
other), builds the web page with links to an ad resource (image/asset server, internal ad server, 3rd party ad server),
and records an ad impression transaction. The ad impression transaction is recorded (via logs on the web server,
or logs/real-time on an internal ad server) prior to serving the requested web page to the user agent.
Client Initiated Measurement
Occurs when the measurement of an ad impression is the result of a direct connection between the user agent
(browser, robot, other), and the ad server. This process can take two forms:
1. Impressions served via advanced html tags (IFRAME/Javascript/ILAYER tags). In this case the ad server
(typically) records an impression transaction and responds to the user agent with the contents of the selected
creative, which may include html that refers to image/assets, or html that refers to another ad resource (3rd
party server).
2. In some cases the ad impression transaction is recorded via an independent request (via an HTTP 302
redirect) to a special ad transaction logging server. This independent request may utilize web beacon
technology and is initiated by the user agent at the same time it requests the image/rich media from the
image/asset server.
10
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Ad Impressions: Server Initiated vs Client Initiated Ad Requests

The delivery processes listed below are for requesting ad
impressions only.
Process for Tracking Impressions
Server Initiated Ad Request

11
Five of eleven participants use a server initiated

process to request the majority of ads.
10
9
Client Initiated Ad Request

Seven of eleven participants use a client initiated
process to request the majority of ads.
7
7
# Participants
One participant uses both client and server initiated

approaches depending on where the ad is served in the ad
management system.
6
5
5
4
3
2
1
0
Server Initiated
11
Client Initiated
Standard Metric
Definitions
Narrative
Well-Controlled
Process
Reliable
Reporting
Server Initiated Ad Request and Counting Process
1. Browser calls Publisher Web Server.

3 (ad response)
2. Web Server calls Publisher Ad Server .
2 (ad request)
2a. Impression counted at the Publisher' Ad Server (See Type 1

on chart) when the ad request occurs.
3. Publisher Ad Server responds with a reference to an ad asset
(image, video, audio, etc) on an Asset or Image Server. The
reference may also be a link to a Third Party Ad server.
Publisher Ad Server
Publisher Web Server

4a (Web Server: Ad request counted)
2a (Ad Server: ad request counted)
4. Publisher Web Server responds with HTML content including

embedded ad content from Publisher Ad Server and any ad
assets (image, audio, video) stored on the Publisher Web Server
1 (content request)
4 (content response)
Type 2:
Publisher
Logging on
Web Server
after retrieving
Ad
Type 1:
Publisher
Logging
on Ad
Server
4a. Impression counted at the Publisher Web Server

(See Type 2 on chart) when the HTML content is prepared, but
after the Publisher Ad Server response.
Browser
5c (ad response: 302)
5 (asset request)
6 (asset response)
5. If the ad involves a remote asset (i.e. image, audio, video not

located on the web server), the browser requests asset from the
asset server.
5a. If the Publisher Web Server response includes a link to a
Third Party Ad Server, the Browser will request the ad from the
Third Party Ad Server.
5b. The Third Party Ad Server will record the ad request.
5c. The Third Party Ad Server will respond with a 302 redirect or
HTML to an Asset Server.
5a (ad request)
Third Party Ad Server

5b (Third Party
ad request counted)
6. The Asset Server responds to the asset request by sending the

asset back to the browser.
Asset or Image Server
Third Party
Logging
12
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Server Initiated Process: Majority of Participants Count at the Ad Server

Five of eleven participants use a Server Initiated Ad request
process. The ad request process that a participant uses
determines in part where the participant counts ad
impressions. The statistics listed below are for counting ad
impressions only.
Server Initiated Transaction Logging Point
11
10
Ad Sever Logging
Two of the four participants using a server initiated ad
request process count ad impressions at the ad server, after
receiving a request from the web server, but prior to
rendering the content.
Web Sever Logging
One of the five participants counts the ad impressions at the
web server prior to rendering the content, after the ad server
responds to the web server request (illustrated as Type 2 on
the Illustrative Server Initiated Ad Request diagram on
page 12).
# Participants Using Server

Initiated Ad Request Process
9
8
7
6
5
4
4
3
2
1
1
0
Ad Server
13
Web Server
Standard Metric
Definitions
Narrative
Well-Controlled
Process
Reliable
Reporting
Client Initiated Ad Request and Counting Process

Type 1: Publisher
Ad Logging prior to
Browser requesting
Ad Asset
1. Browser (user agent) calls the Publisher Web Server.

2. Publisher Web Server responds with HTML content including a
reference to make a request to the Publisher Ad Server.
3a (ad request counted)
Third Party
Logging
3. Browser parses the HTML from the Publisher Web Server and
makes secondary calls to the Publisher Ad Server (usually IMG/
IFRAME SRC/ILAYER/SCRIPT SRC tags)
Type 1:
Publisher
Logging
Publisher Ad Server
5b (Third Party
ad request counted)
3 (ad request)
3a. Type 1: Publisher Ad Server records the ad impression prior to

Browser requesting ad asset.
4 (ad response: 302 or HTML)
4. Publisher Ad Server responds to Browser with a 302 redirect (if an

IMG SRC Tag) or HTML.
Publisher Web Server

1 (content request)
5a (ad request)
Third Party Ad Server
5. Browser requests asset from Asset Server.
2 (content response)
5c (ad response: 302)
5a. If Publisher' Ad Server responds with a link to a Third Party Ad

Server, the Browser will request the ad from the Third Party Ad Server.
Browser
5b. The Third Party Ad Server records the ad request.
5 (asset request)
5d (ad request to Counting Server)

6 (asset response)
5c. Third Party Ad Server responds to the Browser with a 302 redirect (if
an IMG SRC Tag) or HTML to the Asset Server.
5f (ad response: 302)
5d. A Publisher may record an ad impression at the same time the

image is rendered by the Browser by issuing a request to a Publisher Ad
Counting Server using either a web beacon (for rich media ads) or an
image call to a portion of an ad.
5e (ad request counted)
Type 2:
Publisher
Logging
Asset or Image Server
Publisher Ad Counting Server

Type 2: Publisher
Ad Logging
simultaneously to
Browser requesting
Ad Asset
5e. Type 2: Publisher Ad Counting Server records the ad impression

simultaneously to Browser requesting ad asset.
5f. Publisher Ad Counting Server responds to the Browser with a 1x1
transparent image (web beacon) or an image call to a portion of the ad.
6. Asset Server responds to the asset request from the Browser with
the image or rich media content.
14
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Client Initiated Process: Majority of Participants Count at the Ad Server

The ad request process that a participant uses determines in
part where the participant counts ad impressions. The
statistics listed below are for counting ad impressions only.
Client Initiated Transaction Logging Point
11
10
Counting in a Client Initiated Ad Request Process
One participant counts ad impressions at a separate ad

logging server, after the ad server responds to the client, and
when the client initiates a separate redirect call to the ad
logging server.
# Participants Using Client

Initiated Ad Request Process
Six of the seven participants using a client initiated ad

request process count ad impressions at the ad server, after
receiving a request for an ad by the client.
8
7
6
6
5
4
3
2
1
1
0
Ad Server
15
Separate Ad Logging Server
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
All Participants Support the Use of Cache Busting
Types of cache busting technology utilized include:

Appending a random number to the end of the
ad request.
Appending a time/date stamp to the end of the
ad request.
Third party ad serving firms provide cache-busting

guidelines to websites that do not have cache busting
capabilities.
Cache Busting Technology Utilized
11
11
10
9
# Participants Supporting Cache

Busting Functionality
All eleven participants support the use of cache busting

technology. Cache busting mechanisms are employed
to the reduce the potential for an ad request to be
cached in either a web browser or a proxy server.
Cached ads result in undercounting impressions,
because the impression is being served from a proxy or
browser cache, rather than an ad server.
8
7
6
5
4
3
2
1
0
0
Support Cache Busting
16
No Support for Cache Busting
Clicks
17
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Clicks: Uniform Definition and Use of 302 Redirects

All eleven participants track clicks and have a
consistent approach to the definition.
Participants Using 302 Redirects for Tracking Clicks
Uniform Definition
11
The definition of the click metric is the most

consistently accepted and applied of the five key
metrics.
11
10
9
A click is a user-initiated action of clicking on an ad

element, causing a re-direct to another web location.
A click does not include information on whether or
not the user completed the redirect transaction.
# Participants
7
6
Use of 302 Redirects
All participants base click metrics on redirects (or

transfers) successfully processed by the ad server.
4
3
2
1
0
0
Click tracking via 302 redirects
18
Not tracking Clicks via 302

redirects
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Click Request and Counting Process

Narrative
Publisher
Click
Logging
1. Browser clicks on an ad which causes browser to request

a target site from the Publisher Ad/Click Transaction Server.
The target site URL is typically included in the request.
1a (click request counted)

Publisher Ad/Click Transaction Server
1 (click request)
1a. Ad/Click Transaction Server records the click.
2 (click response: 302)
2. Ad/Click Transaction Server responds to the Browser with

a redirect (HTTP 302) to Target Site location.
3a (click request)
3. Browser follows redirect to Target Site.

3a.In the case of a third party-served ad, the target site
location is actually that of the Third Party Ad server.
3b. The Third Party Ad/Click Server records the click request.
3c. The Third Party Ad/Click Server responds with redirect to
the Target Site.
3c (click response: 302)

Third Party Ad/Click Server
3b (Third Party
click request counted)
Browser
3 (target site request)

4 (target site response)
4. Target Site server responds to the Browser.
Third Party
Click
Logging
Target site
19
Unique Visitors
20
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Unique Visitors: Cookie and Registration Based Methods Utilized

Ten of eleven participants track unique visitors. There are two
primary methods used to track each unique visitor:
Methods for Tracking Unique Visitors
Cookie Based Definition

Eight of the ten participants tracking unique visitors use
cookies, and two of the eight also use IP Address in addition to
cookies. Participants typically distinguish between recurring
cookies (repeat visitors) and new cookies (new visitors or
repeat visitors that delete cookies).
10
9
8
8
7
Registration Based Definition

# Participants
Two of the ten participants tracking unique visitors use

registered users or user login counts.
5
4
3
2
2
1
1
0
Cookie-Based
21
Registrations
Not Tracking Unique

Visitors
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Cookie Based Unique Visitors: Process for Determining New Visitors

Among the eight participants tracking visitors using cookies,
there are different techniques used to determine if a new
cookie should be considered a new visitor.
Process for Determining New Visitors
10
Count All New Cookies

Four of the eight participants count all new cookies as new
visitors. Two of the eight also use IP Address in addition to
cookies for additional user validation.
Exclude All New Cookies
9
8
7
One participant does not count any new cookies as a new

visitor. In this case, a unique cookie must visit the site at least
twice to be considered a new visitor.
Exclude Some New Cookies Based On Historical Data
# Participants
6
5
4
4
3
3
2
Three of the eight participants attempt to estimate the number

of repeat visitors with new cookies using known user data. For
example, a portion of new cookies from the unique visitor
count is excluded based on an estimate of new cookies that
represent repeat visitors that do not accept cookies, or have
deleted cookies from previous visits.
22
1
1
0
Count All New
Cookies
Exclude All New

Cookies
Excludes Some New

Cookies based on
Historical Data
Total Visits
23
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Calculating Total Visits: Based on Actual, Sample or Statistical Analysis

Ten of the eleven participants calculate total visits. The
specific business rules used to define a visit (or
session) vary with most of the participants. For
example, some participants use a time based attribute
for terminating a visit after 30 minutes of inactivity. In
addition to time-based rules, there are three methods
used to calculate total visits.
Use of Actual, Sample or Statistical Analysis

to Determine Total Visits
10
9
8
Actual
Six of ten participants use all of the user activity data to

calculate total visits.
Sampling
# Participants
5
4
Three of ten participants use a sample (several days

during the period) of user activity to estimate total visits.
Some participants rely on outsourced service providers
for this measurement.
Statistical Analysis
2
1
1
Actual Data
One participant performs statistical analysis to estimate

total visits.
24
Sampling Days or
Periods
Statistical Analysis
Page Impressions
25
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Page Impression Tracking

The page impression metric is used by eight of the
eleven participants; the 3rd party ad server participants
do not track this metric.
Page Impression Logging Points
11
Publisher participants may use this metric if contentbased advertising is embedded within a page or a page
is sponsored by an advertiser.
Page impressions are tracked using two different
methods:
10
9
8
Logging at the Web Server
# Participants
7
6
Six of the eight participants use standard web server

logs for page impressions. Page Impression
transactions are usually only counted if accompanied by
successful HTML status codes and are filtered from
robotic activity.
Logging at a Separate Tracking Server
5
4
3
2
2
1
Two of the eight participants use web beacon

technology to track page impressions. These
participants utilize either 3rd party web metric tracking
firms or internal tracking servers to record the request.
26
0
Web Server
Separate Tracking Server
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Page Impression Delivery and Measurement Process

Data
Web Server
(1) The user browser calls the web server using a

URL entered by the user (may be initiated by the
user or via an automated page refresh).
(1)
(2) The web server responds to the user browser

by checking for an existing cookie and creating
one if one does not exist. The web server then
renders the content and web beacons if beacons
are used for external tracking.
(2)
No participants measure page impressions at this

point.
Six of eight publisher participants measure

page impressions at this point.
User Browser
(3) Where web beacons are used for tracking

purposes, the users browser calls the ad server to
request an invisible tracking image (i.e. one clear
pixel) and passes on the users cookie along with
the beacon request.
(3)
(4)
(4) Where web beacons are used for tracking

purposes, the ad server responds to the tracking
request by rendering and logging the tracking image.
Two of eight publisher participants measure page
impressions at this point.
No participants track page impressions at this

point.
Data
Note: 3rd party servers may track page impressions

at this point as part of specific Cost per Action
contracts.
Separate Tracking Server
27
Filtering
Robots/Spider Activity
Filtered Log Data
Data
Internal IP Addresses
28
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
All Participants Perform Some Level of Robotic Activity Filtering

Filtering for robotic activity falls into three categories:
Robotic Filtering Approaches
Basic
All eleven participants perform some basic robotic activity
filtering. Basic filtering techniques include:
Use of a robot.txt file to prevent well-behaved
robots from scanning the ad server
Exclusion of transactions from User Agent
Strings that are either empty and/or contain the
word bot
11
11
10
9
8
8
7
Eight of eleven participants also exclude transactions

from lists of known robots. The lists are typically based
on User Agent String and/or IP Address and may be
maintained by a 3rd Party Auditor. The number of
identified robots each participant lists varies from
approximately ten to over seven hundred.
# Participants
List of Known Robots
5
4
3
2
2
1
Behavioral Filtering
0
Two of eleven participants also conduct advanced

behavioral filtering. These participants define business
rules, such as 50 clicks by a single cookie during a daily
period, to identify robotic behavior.
29
Basic Filtering
List Filtering
Behavioral Filtering
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Filtering of Internal IP Addresses

Four of eleven participants filter transactions from
within their company by removing all activity
originating from IP Address ranges on their company
network.
Internal IP Address Filtering
11
The reasons for filtering this activity include:
10
- Eliminating any activity generated by internal

monitoring tools. These tools are similar to
robots and are often used to verify that a
server is working properly.
9
8
7
# Participants
7
6
- The demographic associated with a user

within the company does not represent the
primary demographic of the website.
5
4
4
3
- Removing all activity generated by a

company user conducting testing within the
live environment to ensure that a creative is
being served properly.
2
1
0
Removes Internal IP Addresses
30
Includes Internal IP Addresses
Independent Verification Audits
31
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Independent Verification
Nine of the eleven participants use 3rd Party firms to conduct
independent audits over the ad delivery processes or individual (or
campaign) transactions. Two of the eleven participants do not
employ independent audits.
Types of Audits Conducted by Participants
Process Audits
11
Five of the eleven participants employ outside auditors to conduct

process audits over the entire transactional process used to generate
online ad metrics. These audits are conducted periodically
(e.g.,every 6 months) and result in a audit opinion (performed under
AICPA standards) over the effectiveness of controls and processes in
place.
10
Seven of the eleven participants employ outside firms to re-count their

transactional data and provide verified metric reports to advertisers.
These activity reports are typically produced monthly.
8
7
# Participants
Activity Audits
7
6
5
5
4
3
2
2
Both Process and Activity Audits
Three of the nine participants conduct both process and activity

audits.
0
Process Audit
Activity Audit
No Audit Performed
No audits
Two of the eleven participants do not employ independent verification.
32
Detailed Findings: Processes & Controls

Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
The Online Advertising Process

Good Controls Result in Reliable Reporting
The diagram on following slide illustrates the basic process involved with selling,
delivering and reporting online advertising.
Slide 36 describes the concepts of how a well-controlled framework is the foundation
for assessing control risks associated with managing and delivering online advertising,
as well as reporting accurate, complete and reliable data.
Slides 37- 42 step through the online advertising process, beginning with the sales
insertion order and ending with campaign reporting. Each of these slides describe the
expected controls involved to successfully complete that component of the process.
Adjacent to the expected controls content box is the content box highlighting what was
actually observed through inquiry with the eleven participants, including how many
participants did not have the requisite controls in place to effectively manage that
component of the process.
The resulting gap analysis from this benchmarking exercise provides the evidence
supporting our findings and proposed recommendations for achieving reliable and
comparable reporting metrics.
Standard Metric
Definitions
Well-Controlled
Process
34
Reliable
Reporting
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
A Simplified Overview of the Online Advertising Process

>>
Sales
Order Processing
Agreement on advertiser
campaign requirements and
sales terms in Insertion Order
Capture of Insertion Order

detail in the delivery
system
Trafficking
Establishment of creative in
the delivery system
Area most critical to traffic metrics

Delivery
Delivery and recording of ad
and traffic activity by the
delivery system
Advertisers
Reporting
Summarization and presentation of
delivery or traffic data to external
parties
35
Data Aggregation
Collection and aggregation of delivery
and traffic data from the delivery
system logs into the reporting system
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Detailed Steps Involved in the Reporting Process

1) Ad and/or traffic activity is captured in
the server log or real time
2) Transaction Data is collected from
servers.
(1)
Capture
8) Metric data is presented to

the appropriate parties.
(8)
Presentation
(2)
Collection
3) Logs are reformatted
and/or sorted without
altering values.
7) Metric data from separate

systems is combined to
determine the total metric.
(7)
Compilation
(3)
Formatting
(6)
Extrapolation
6) If data sampling is used for audience
measurement, results are extrapolated
to the entire population of data.
(4)
Filtering
4) Logs are filtered to exclude invalid

entries.
-Robotic Activity
-Internal IP addresses
-Automated page refreshes
(5)
Summarization
5) Data is summarized and metric results

are calculated following company
established definitions (see Appendix).
36
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Poorly Designed Controls Have Serious Consequences

Process Category
!
Sales
Standard Criteria
Do I/Os accurately reflect
advertiser specifications?
Key Risks / Consequences

!
Manual data entry errors
Inaccurate sales records
Order
Processing
Are ad campaigns loaded

as specified in the I/O?
!
Trafficking
Ad Delivery
Are campaigns trafficked

to the appropriate server?
Are ads being served on
schedule to meet campaign
commitments?
Data
Aggregation
Are all ad transactions

completely and accurately
written to the logs?
!
Campaign
Reporting
PricewaterhouseCoopers
Are logs from all servers

consolidated for report
generation?
Invalid insertion orders

being processed
Wrong ad creative loaded
for delivery
Improper ad modifications
entered in the system
Ad deliveries not recorded
in the proper period
Log files for ads delivered
not reconciling with ads
reported
Over reporting of ad
transactions
37
Key Control Objectives -- Completeness, Accuracy. Validity & Restricted Access
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Sales Process Cumbersome Due to Lack of Standard Insertion Order

Expected Controls
Observed Weaknesses
VALIDITY
VALIDITY
Formal written, consistent I/O is used for all ad

sales
Format and content of Insertion Order varies by

participant.
Sales are recorded only after a valid sales order

or contract has been properly authorized.
Initial Insertion Orders are typically signed by the

advertiser before the campaign is established, but
revision Insertion Orders are often not signed
before processing.
Changes made to existing sales contracts are

properly authorized by the customer and
reviewed by appropriate company personnel.
COMPLETENESS & ACCURACY

Revision Insertion Orders are not always linked to
the original Insertion Order.

Controls exist to ensure that valid sales are
recorded once and only once.
RESTRICTED ACCESS
Appropriate personnel review Insertion Orders

for accuracy after they are established in the
system.
Security controls vary by participant.
RESTRICTED ACCESS
Appropriate Access to Insertion Order data is
restricted to appropriate users.
Sales personnel do not have the ability to
execute campaigns in the delivery system.
38
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Order Processing Controls Weaker for Revised Insertion Orders

Expected Controls
Observed Weaknesses
VALIDITY
VALIDITY
Approval of the detailed Insertion Order

should be obtained from both the client and
internal management.
Insertion Order format and content vary by

participant.
The controls surrounding Insertion Order
revisions are universally weaker than for the
controls surrounding initial Insertion Orders.
A clear policy and enforcement mechanism

should exist for managing Insertion Order
revisions.
Sales should create or review the Insertion

Order directly in the delivery system to avoid
errors due to manual data entry.
Many of the participants manually enter the

Insertion Order data into the delivery system
from the Insertion Order.
The order system should perform validation

on data inputs including dates, guaranteed ad
impressions, etc. to prevent errors.
Many of the participants order processing

systems do not perform validations on key
fields.
A standard Insertion Order should be used for

all ad sales.
RESTRICTED ACCESS
RESTRICTED ACCESS
Access to input data should be restricted to

appropriate individuals.
39
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Management of General System Risks Often Informal

Expected Controls
Observed Weaknesses
SYSTEM MAINTENANCE
SYSTEM MAINTENANCE
System changes are appropriately approved.
Change management policies and

procedures are often informal.
Systems changes are adequately tested.

Access to production is restricted to
appropriate individuals.
SYSTEM SECURITY
SYSTEM SECURITY
Physical access is appropriately restricted.
Strength and nature of controls vary

significantly by participant and by system.
Logical access is appropriately restricted.

SYSTEM OPERATIONS
A disaster recovery plans exists.
SYSTEM OPERATIONS
Data is backed up on a regular basis.
Many participants do not have a functional

disaster recovery plan
System performance/availability is monitored.

SYSTEM DEVELOPMENT
SYSTEM DEVELOPMENT
Projects are authorized and tracked.
Control requirements are often left out of the
development process
Requirements are appropriately defined.

Controls are considered during development
40
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Security Controls Vary by Participant

Expected Controls
Observed Weaknesses
VALIDITY
VALIDITY
All log generating servers are configured

consistently, ensuring that proper naming
conventions and logging is implemented for
all servers.
New servers are sometimes deployed and

configured inconsistently.

Cache busting techniques are employed to
ensure the capture of all user activity.
Participants do not all support cache

busting techniques.
Controls exist to ensure the delivery system

logs activity once and only once.
RESTRICTED ACCESS
Controls exist to ensure that the delivery

system logs activity in the proper period.
Campaigns are paced to achieve targets.

RESTRICTED ACCESS
Access to system resources and data is
restricted using user groups and
passwords.
41
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Data Aggregation Exclusions Not Consistent

Expected Controls
Observed Weaknesses
VALIDITY
VALIDITY
Error codes are excluded from metrics.
Robot filtering is not consistently used and

involves various techniques.
Non-user initiated activity (e.g. robots,

spiders) is excluded from summarized
activity.
Internal IP addresses are typically not

filtered out of aggregated data.
Internal IP Addresses are excluded from

aggregated data.
Automated checks identify corrupt or

suspect data
Data retention policies differ by participant

and may not satisfy audit or contractual
requirements.
Participants are occasionally forced to

restate previously reported activity due to
corrupt or lost data.
Collection controls ensure all logs are

collected once and only once.
An audit trail is maintained to report the
number of files aggregated and lists the files
that could not be processed.
Data recovery capabilities differ by

participant.
Timing constraints or latency may cause
reporting discrepancies.
RESTRICTED ACCESS
Access to logs is restricted to appropriate
personnel to prevent tampering, loss or
destruction.
RESTRICTED ACCESS
Security controls vary widely by participant.
42
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Multiple Systems and Terms Increase Reporting Risk and Complexity

Observed Weaknesses
Expected Controls
VALIDITY
VALIDITY
Participants do not always use the terms and

definitions included the Insertion Order for
reporting purposes.
Reporting is based on the same standard

metric definitions used during the sales
process and included in the Insertion Order.
Estimates used in reporting vary and are not

consistently validated for reasonableness and
accuracy.
Estimates used in reporting are based on

standard criteria and are periodically
validated for reasonableness and accuracy.
Report functionality ensures that all data is

summarized and presented for the specified
period and advertiser.
Participants generally report the data only for

the specified period with some exceptions.
Advertisers are generally notified when
reporting data is available.
Advertisers are notified when reporting data

is available.
RESTRICTED ACCESS
RESTRICTED ACCESS
Most participants allow advertisers direct

access to reports via a web interface;
however, some participants continue to
compile and distribute reports manually from
single or multiple data sources
Advertisers have direct and timely access

to their data and only to their data.
43
Proposed Recommendations:
Metrics & Definitions
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Proposed Recommendations for Ad Delivery & Audience Measurement

Metrics
Adopt standard definitions for the following metrics (include specific exclusions /inclusions and estimation criteria
in these standard definitions):
Primary
1. ad impression -- Consider a definition that includes best practice filtering and logging attributes. Proposed
definition: A measurement of responses from an ad delivery system to an ad request from the user
browser, which is filtered from robotic activity and is recorded at a point as close as possible to the actual
viewing of the creative material by the user browser.
2. click (through) -- Consider a definition that includes best practice filtering and logging attributes. Proposed
definition: A measurement of the user-initiated action of clicking on an ad element, causing a re-direct to
another web location. Tracked and reported as a 302 redirect at the ad server. This measurement is filtered
for robotic activity and is recorded at a point as close as possible to the actual viewing of the destination web
location by the user browser.
3. total visits Resolve whether the approaches to determining visitor counts can be addressed in one
definition (i.e., cookies, user-registration) and require disclosure of the definition. Resolve whether session
time limits should also be included in the definition(s).
4. unique visitor After resolving the two issues related to the visitor definition, consider the additional issues
for defining unique visitors, including the use of sampling and estimates, and the treatment (i.e., include or
exclude visitors that do not accept cookies) of new cookies for cookie-based calculations.
5. page impressions -- Consider a definition that includes best practice filtering and logging attributes.
Proposed definition: A measurement of responses from a web server to a page request from the user
browser, which is filtered from robotic activity and error codes, and is recorded at a point as close as
possible to the actual viewing of the page by the user browser.
45
Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reporting
Secondary
Primary
Proposed Recommendations for Ad Delivery & Audience Measurement

Metrics
Disclose the recording technique used for all ad delivery and audience measurement metrics using
the agreed-upon industry definitions. Include suggested items to be disclosed such as time
definitions, type of metric used, what is excluded and when you change your processes.
Use a different term for estimated reach calculations using a sample of user activity from the
entire population.
Establish definitive periods for reporting (e.g., day, week, month, four-week period)
Consider adopting standard definitions for additional formats (e.g., email, rich media)
46
Recommendations: Processes & Controls

Standard Metric
Definitions
Well-Controlled
Process
Reliable
Reportin
g
Primary
Proposed Recommendations for Processes and Controls

Develop standard for cache busting practices, including responsibility of respective parties in a
3rd party serving arrangement.
Standardize exclusions such as filtering for robots/spiders and auto page refreshes.
Require inclusion of general system technology controls (i.e. security, data backup/retention
procedures, change control practices, etc) and other process controls .
Secondary
Encourage the use of independent third parties to perform periodic reviews of compliance with
the underlying processes used to generate reporting information.
Adopt a standard industry insertion order, including format, content, and standard terms &
conditions.
Establish a clear policy and process for limiting and managing revision insertion orders
48
Appendix
Appendix: Project Team

The study team included professionals specializing in the online advertising industry;
study advisors and contributors were drawn from a variety of organizations
Study Team
PricewaterhouseCoopers
Engagement Partners:
Tom Hyland, Russ Sapienza
Project Directors:
Suzanne Faulkner, Pete Petrusky, Troy Skabelund, Matt McKittrick
Team Members:
Michael Hulet, Chad Fisher, Jee Cho, Justin Wright,

Nic Pacholski, Brianna Sorenson, Ying Li
Study Advisors / Contributors

Interactive Advertising Bureau
Greg Stuart
Media Rating Council

George Ivie
Advertising Research Foundation

Jim Spaeth
Robin Webster
50
Appendix: Organizational Profiles

The report has been conducted independently by PricewaterhouseCoopers on behalf of IAB.
PricewaterhouseCoopers (www.pwcglobal.com), the worlds

largest professional services organization, helps its clients build
value, manage risk and improve their performance. Drawing
on the talents of more than 150,000 people in 150 countries,
PricewaterhouseCoopers provides a full range of business
advisory services to leading global, national and local
companies and to public institutions.
PricewaterhouseCoopers New Media Group was the first
practice of its kind at a Big Five firm. Currently located in New
York, Los Angeles, Boston, Seattle and the Bay Area, our New
Media Group includes accounting, tax and consulting
professionals who have broad and deep experience in the
three areas that converge to form New Media: advanced
telecommunications, enabling software and content
development/distribution.
management consulting
M&A assistance
business assurance services
tax planning and compliance
Web advertising delivery

auditing
capital structuring
privacy auditing and

consultation
employee benefits and

executive compensation
packages
51
Founded in 1996, the Interactive Advertising Bureau (IAB)

is the leading online global advertising industry trade
association with over 300 active member companies in the
United States alone.
IAB activities include evaluating and recommending
standards and practices, fielding research to document the
effectiveness of the online medium and educating the
advertising industry about the use of online and digital
advertising.
Current membership includes companies that are actively
engaged in the sales of Internet advertising (publishers),
with associate membership including companies that
support advertising, interactive advertising agencies,
measurement companies, research suppliers, technology
providers, traffic companies and other organizations from
related industries.
The IAB is an expanding global organization with certified
International chapters and Corporate members in Asia and
the Far East, North and South America, Europe and
Eastern Europe, South Africa and The Caribbean.
Appendix: Participating Organizations

The following companies participated in the study, selected by the IAB:
Destination Sites
Portals
52
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and / or Networks

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IAB Online Ad Measurement Study

Background and Scope

About this Report....

2001 PricewaterhouseCoopers. All rights reserved.

Background and Scope

The scope of work consisted of:

Our work focused on specific metrics and ad formats:

a comprehensive list of audience measurement and ad delivery metrics was documented

five metrics were tested, with an emphasis on ad impressions and clicks

2001 PricewaterhouseCoopers. All rights reserved.

Background and Scope -- About this Report

2001 PricewaterhouseCoopers. All rights reserved.

Detailed Findings: Metrics, Definitions, Audits

Five Primary Metrics Measure and Track Audience and Ad Transactions

Leading Ad and Audience Measurement Metrics

Based on responses from participants, the top five

2001 PricewaterhouseCoopers. All rights reserved.

Ad Impressions are the Dominant Currency Metric for Ad Revenues

Clicks as a Currency Metric

Only participants using a Cost-per-Action pricing model

Page Impressions - Secondary Currency Metric

Other Currency Metrics

Other less common currency metrics include email ad

2001 PricewaterhouseCoopers. All rights reserved.

2001 PricewaterhouseCoopers. All rights reserved.

Ad Impression Measurement: Server Initiated and Client Initiated

2001 PricewaterhouseCoopers. All rights reserved.

Ad Impressions: Server Initiated vs Client Initiated Ad Requests

Process for Tracking Impressions

Server Initiated Ad Request

Five of eleven participants use a server initiated

Client Initiated Ad Request

One participant uses both client and server initiated

2001 PricewaterhouseCoopers. All rights reserved.

Server Initiated Ad Request and Counting Process

1. Browser calls Publisher Web Server.

2. Web Server calls Publisher Ad Server .

2a. Impression counted at the Publisher' Ad Server (See Type 1

Publisher Web Server

2a (Ad Server: ad request counted)

4. Publisher Web Server responds with HTML content including

4a. Impression counted at the Publisher Web Server

5. If the ad involves a remote asset (i.e. image, audio, video not

Third Party Ad Server

6. The Asset Server responds to the asset request by sending the

Asset or Image Server

2001 PricewaterhouseCoopers. All rights reserved.

Server Initiated Process: Majority of Participants Count at the Ad Server

Server Initiated Transaction Logging Point

# Participants Using Server

2001 PricewaterhouseCoopers. All rights reserved.

Client Initiated Ad Request and Counting Process

1. Browser (user agent) calls the Publisher Web Server.

3a (ad request counted)

3a. Type 1: Publisher Ad Server records the ad impression prior to

4 (ad response: 302 or HTML)

4. Publisher Ad Server responds to Browser with a 302 redirect (if an

Publisher Web Server

5. Browser requests asset from Asset Server.

5c (ad response: 302)

5a. If Publisher' Ad Server responds with a link to a Third Party Ad

5b. The Third Party Ad Server records the ad request.

5d (ad request to Counting Server)