It was only a matter of time. First came the Web sites--hundreds and then thousands of them. Next came the advertisers looking to target those who surf the Web. Now those same advertisers are looking for reliable ways to count the surfers and figure out who they are.
All this has created promising new business opportunities. These 21st century technology detectives collect and research data about web users. In many ways they are seeking to become like A.C. Nielsen, who devised a system for "counting" how many households tune into a particular television show. They want to do similar tracking for Web sites.
Several Stanford alums have jumped into the burgeoning new market. Soon after advertising made its debut on the Web in 1994, Ariel Polar, MBA '94, founded I/Pro (Internet Profiles Corporation), which monitors hour-by-hour traffic at customers' websites. Focalink Media Services, started by David Zinman MBA '95, and Jason Strober, MBA '95, helps companies to increase the value of their advertising on the Web. Both enterprises are playing key roles in determining the future of this new industry.
Web advertising is growing nearly as fast as the Internet itself. Ad money spent on the web in the second quarter of this year was about $43 million, a 347 percent increase over the fourth quarter of 1995 and is predicted to hit $2 billion by the year 2000. Procter and Gamble, the largest marketer of consumer goods, earlier this year became the first company to base its Web advertising payment on the number of times users clicked on their ad. Previously, advertisers have paid a flat cost per thousand viewers, the same model used by most print magazines.
Ariel Polar had first heard about the world wide web in late 1993, about six months before he was due to graduate. A native of Venezuela, he had come to Stanford hoping to start his own technology business. It took him about three more months to come up with the idea for I/Pro. Creating the technology to produce profiles of Net users has been a daunting task for the team at the company. Earlier this year. the I/Pro got about 500,000 web surfers to sign the online equivalent of a guest registry-identifying themselves and their demographic characteristic in exchange for discounts and giveaways. Another competing tracking company has installed software in 4,000 home computers to estimate web usage and find out who the web users are. Other smaller competitors conduct their own surveys.
One result of the evolving technology is a lack of consensus about what the numbers mean. In the early days of web advertising, the standard unit of measurement was a "hit," counted every time a surfer clicked on any link on the site. The accuracy of measuring hits is under constant doubt. One recent example was a remote computer programmed to access a site 1,000 times a minute in order to artificially increase its site use.
To complicate matters, many advertisers won't rely on numbers from web operators and demand independent reports from outside firms the same way television and radio advertisers rely on Nielsen and Arbitron ratings. I/Pro has been criticized because it tries to play both sides of the fence--tracking users for web sites and then selling the same data to advertisers. "We've tried to produce a standard audit for media buyers and advertisers because they need the same thing," says director of product marketing John Kremer, MBA '94. "It's a crazy ride and the playing field changes every day."
While I/Pro focuses on the demographics of Net users, Focalink Media Services seeks ways to help companies target their advertising at the right web users. David Zinman, MBA '95 and Jason Strober, MBA '95 came with the idea for their company as part a class project to identify new business opportunities in technology.
Focalink offers its customers two main services, MarketMatch and SmartBanner. MarketMatch determines which Web sites meet an advertiser's target audience and provides extensive profiles of individual Website users, data about site content and traffic and up-to-date ad pricing. SmartBanner gives advertisers information about the performance of the advertising and changes ads that aren't reaching their audiences.
"All of our products are designed to allow the main players--the advertiser, the publisher and the media reps--to communicate," says Zinman. "Soccer moms aren't on the Web yet but I don't think it's that far down the road. That's what makes it compelling to advertisers."
To help round out their knowledge, Zinman andStrober have a third partner, Ron Kovacs, '64 who has 30 years of experience in the advertising industry. The three were introduced by a mentor at the Mayfield Fund, their financial backer. "We brought the internet savvy and Ron brought the advertising intelligence," says Zinman.
David Yoder, director of media for Anderson & Lembke, a national advertising agency, says he is using both Focalink and I/Pro for his clients, which include Microsoft. "We're using virtually everything out there for our clients," says Yoder. "We're not betting on one horse but we're hoping that most of the companies succeed because we need their insight and innovation."
