Will Online Traffic Scandal Make Newspaper Circulation Scandal Look Like Child's Play?

from the math-is-hard dept

Tue, Aug 29th 2006 2:04am — Mike Masnick

Two years ago, the corporate scandal of the summer was all of the big newspapers who were caught lying about their subscriber numbers to advertisers, and it got them in all sorts of hot water. The numbers of "ghost subscribers" tended to be in the tens of thousands of subscribers -- representing a few percent of actual subscribers. What's amazing, as so much advertising moves online, however, is that there's been almost no skepticism over whether or not something similar is happening online. In the last few months, we've seen a number of sites claiming traffic numbers that are unlikely to be realistic, but which the press is often passing on as if they were fact. A few reporters have picked up on this, and now the NY Times is pointing out that Forbes.com appears to have been pumping up its traffic numbers to help its standing with advertisers (and to help it secure venture capital investment) -- perhaps by millions of visitors. The numbers are a lot bigger than the newspaper circulation scandal from a few years ago, and it seems like only a matter of time until the same questions are raised online. The various newspapers involved in the ghost subscriber scandals a few years ago got punished and had to pay up -- but will web publications face the same punishment as well? Part of the problem is a lack of agreement about how to count online visitors -- and stats packages that return wildly different numbers. A second issue is that many ad deals are based on specific impressions, so it doesn't matter how much overall traffic a site is getting as long as the specific impressions are accurate (though, as in the Forbes.com case, the company clearly was using its traffic numbers to get advertisers in the door by claiming they had the largest audience). However, with the recent rise in ad or sponsorship deals based on time (such as "be our sponsor for a month"), it could raise some problems. With all the fuss about how online media is back thanks to advertising, it's worth remembering that the ad market is cyclical, and a big scandal over highly inflated traffic numbers could torpedo the ad sales of some sites pretty quickly.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

16 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Gavin, 29 Aug 2006 @ 2:45am

Follow the money
Where there is potential for corruption you will find.....wait for it...CORRUPTION.

File this under I for inevitable.
[ link to this | view in chronology ]
Scott, 29 Aug 2006 @ 3:33am

my solution
When selling ads to my site, I give the potential advertiser access to my google analytics data.

They can log in and see what kind of visitors we get themselves, see real traffic treds, etc.. and decide if the site is good for them.
[ link to this | view in chronology ]
Yo ho ho..., 29 Aug 2006 @ 3:49am

Surprise
Audience measurements for advertising dollars has always been one big guessing game -- with lots of BS to boot. The advertisers are quite aware of this and still pay up because it is all relative... as long as everyone is BS'ing by the same amounts.

Think of it this way -- Nielsen measures national TV ratings with a 9000 household sample. Does anybody in the media world really think this is a good sample size for 112 million households???
[ link to this | view in chronology ]
- Joe, 29 Aug 2006 @ 7:29am
  
  Re: Surprise
  9,000 households is no where near enough, especially when you have cable operators that have access to set top box data that could really track a much larger trend, granted that is more pro cable then pro network ratings. Also don't forget to look at how we measure magazines. it's all guess work.
  [ link to this | view in chronology ]
- Johann, 29 Aug 2006 @ 8:36am
  
  Re: Surprise
  Depends. If you had a flock of 12 million sheep, how many would you need to watch to get a good impression of what the vast majority of the flock is doing?
  [ link to this | view in chronology ]
chris (profile), 29 Aug 2006 @ 5:59am

the problem is...
the trouble with advertising is that advertising is run by advertisers.

if the site statistics and the rate plans were handled by people with a history of honesty, there probably wouldn't be so many scandals.
[ link to this | view in chronology ]
Anonymous Coward, 29 Aug 2006 @ 6:50am

Sure, loose your level of trust with your clients/customers and don't expect them to come back. I surely wouldn't spend advertising dollars on a resource that was questionable when there's so many others available..
[ link to this | view in chronology ]
Haywood, 29 Aug 2006 @ 7:09am

No mention of Adblock software and plug-ins, traffic doesn't necessarily add up to views even legitimate traffic. I may see an ad once, but if it is annoying, RIP plug-in for Fire Fox kills it dead, Active Stop plug-in quiets all the flash. did I mention how much more I love the web with Fire Fox?
[ link to this | view in chronology ]
Lay Person, 29 Aug 2006 @ 7:50am

Who Cares?
Who cares?

Advertisers are the biggest fricken liars on the face of the earth!

Nobody likes their own medicine...goes down real bitter!

Talk about exagerated statements...is drinking Miller light really going to get me all those hot girls?!?!?!?!
[ link to this | view in chronology ]
Anonymous Coward, 29 Aug 2006 @ 8:47am

Seems like some here need a refresher course on statistics and sample size.
[ link to this | view in chronology ]
Nick, 29 Aug 2006 @ 8:52am

Amen
Thank God for the plug-in's. Advertising? What Advertising? I don't see any Advertising.
[ link to this | view in chronology ]
Drama2Sell, 29 Aug 2006 @ 9:58am

Doesn't really matter
Unlike print media that is extrememly difficult to track--short of asking a customer at the time of purchase "where do you hear about us" or taking a coupon.

Online advertising, by its very nature, IS 100% trackable.

With an online ad I can track where you came from, and whether or not you purchased.

If enough purchases come from an ad on a site--I am advertising on that site, I could care less what numbers you have--or claim to have.
[ link to this | view in chronology ]
Anonymous Coward, 29 Aug 2006 @ 2:16pm

Statistic Sample Sizes don't have to be a large percentage of the population, they just have to be statistically significant in size. 9000 is a reasonably good size for measuring any sample, provided you are actually taking a RANDOM sample. It all tends towards Normal anyways, so you get an idea of what the trends are.

People who think that measuring 10% of the population will get you a better answer than 1% of the population are dreaming, firstly it costs more to collate that data, secondly it doesn't give you any MORE information than you had at 1% (provided that 1% was say 100 or more people), just perhaps a greater degree of confidence.
[ link to this | view in chronology ]
Anon, 29 Aug 2006 @ 2:22pm

comScore/Nielson/MediaMetrix/HitWise/Alexa are bog
Anyone who works for a web company, especially one with significant non-US traffic, knows that the numbers coming out from the web traffic companies are pretty bogus. I'm not sure what their claimed error rate is, but seeing their numbers and seeing our own counts having a 30x or more difference makes me highly suspicious of their methods. It largely depends on how they get their data, which often results in a heavy skew. Alexa is for toolbar stats, who the hell installs the Alexa toolbar? Hitwise works off of US isp data.
[ link to this | view in chronology ]
Lay Person, 29 Aug 2006 @ 2:37pm

Stats
It is very reasonable that a 9000 unit sample size is more than adequate.

The ratios arent as important as selecting a random set reflective of what is being measured.
[ link to this | view in chronology ]
Anonymous Coward, 29 Aug 2006 @ 6:51pm

The site can easily place tags on their sites
allowing a third party to measure the number of
visitors. the tag code could only vistit the 3rd part site say 1 on 100 visits - but you can still get a approx measure of the millions of hits claimed.

the prospective - add buyer then can hire a company
to hit the site a certain numner of times and look for the
addrsses in the 3rd party log. - the ratios of the
expect hits can be checked.
It is hard to cheat it you use the right stats.

or they can place a tag on of a subpage to
set a prospective ad cliet see the traffiic.

This is like sitting ina store and counting the customers.
- if the count is badly off then one will know -
I do'n't mean that few % due to a 'bad' day.
i.e. if you calin 400 customers/ hour
ans you sit ans see onlt only 100 in one hour
one may want to know why the observer number are so far off.
[ link to this | view in chronology ]