Previously: My Impressions of Davos

I thought I’d share my “Davos Moments” with you, when what I witnessed was so powerful I got chills. One session alone spawned three such moments.

The session was headed by Miguel Nicolelis, a professor of neuroprosthetics at Duke. Prior to this session, I didn’t know that neuroprosthetics was even a word. Essentially, it is the ability for your brain to move a prosthetic attached to your body just by thinking about it.

Professor Nicolelis gave us an amazing live demonstration of his work. Via satellite, he showed a monkey named Clementine walking on a treadmill at his lab in Durham. The brainwaves from the monkey were transmitted to a robot in Tokyo. Using mathematical models that replicated electric signals sent by the brain to cause muscles to move, the data were fed to the robot in real time, causing it to walk just like Clementine. In another variation of the experiment, they had the monkey think about walking, which caused the robot, in Tokyo, to walk just as the monkey would. But here’s the clincher—the amount of time it took all of this to occur was 118 milliseconds. That is faster than the time it takes Clementine to send signals from her own brain to her own leg.

Thinking about our soldiers coming home from Iraq who have lost limbs, as well as a 16 year old boy from our hometown who had an accident this summer and is now paralyzed from the neck down and the hope that this research represents for them, literally gave me chills and brought tears to my eyes. Meet Miguel and see a demo on YouTube.

That was my first Davos moment.

There were two other professors from MIT on that same panel who are also doing fascinating research in this area and each had equally gripping presentations. One, Hugh Herr, is a double amputee. While still in high school, he was mountain climbing one day, got caught in a storm and contracted frostbite, resulting in the loss of both his legs from the knee down. Since then, he has become a leading-edge researcher and has what he claims is the “benefit” of being able to test his work on himself. Seeing him walk, you would never guess anything out of the ordinary. But during his presentation, he lifted his pant leg and walked through the audience, inviting us all to closely observe how the prosthetic mirrored the complex movement of the foot and leg. It was amazing, eliciting images of “The Six Million Dollar Man” and “The Bionic Woman.”

Hugh’s future plans are to connect his brain to this amazing prosthetic device. This not only includes information flow from the brain to the limb, but also from the limb to the brain. So, when Clementine is thinking of walking, the robot will be walking, but with this new technology, Clementine will also feel like she’s walking. Hugh told us “This year, I’m happy to tell you I can walk – even run – on the beach. Next year, I hope to be able to tell you that I can also feel the sand on my feet.” He went on to joke that: “the last time my brain was connected to my legs, I was a D student in high school. Then, they became disconnected, and I became an MIT professor. Not sure what will happen when they’re connected again – hope I don’t revert to my high school days. Better get tenure first.” And, yes, he still mountain climbs!

That was another Davos moment.

But there’s more. As I was writing this piece, Miguel Nicolelis himself just happened to sit down next to me! He is as genuine and as down-to-earth a guy as you’ll ever meet. We got to talking, and for the next 45 minutes, he gave me a personalized lesson in neuroprosthetics, including a discussion of the mathematical models that explain the neural signals. (Surprisingly, they are actually linear.)

In addition, I learned of Miguel’s aggressive plans – already underway – to build a string of “science cities” all over his home country of Brazil, the center of which will be in Natal, a remote and impoverished area. The vision is that these will be high-quality schools that specialize in science-related subjects, but provide high quality education, often using scientific concepts for learning in all areas, such as the scientific method. The plan is that, over time, these hubs will attract both high-tech companies and research institutions, a concept that is taking hold in several developing countries, and especially across Asia.

You can read more about this in this month's Scientific American, but the idea is to create an environment in Brazil where accomplished students can work and succeed without emigrating to other countries, thereby slowing the brain drain and improving the socioeconomic conditions, and ultimately, improving the quality of life for the people of the students’ home country. Miguel believes strongly that “you don’t need a Ph.D. to make contributions to science, you just need the right environment.” In the last few years, he’s managed to secure initial funding for this project, and 400 students are currently enrolled. His plan calls for 1 million students to be enrolled in a series of schools all over Brazil two years from now. One million students. Talk about “Thinking Big.”

Next: Davos Moment #4

With behavioural targeting, the Internet is finally beginning to deliver on some of the promises made to advertisers more than a decade ago. Leading web companies are literally “buying into” behavioural targeting. In 2007, AOL spent around $200 million for Tacoda, Yahoo! plunked down $300 million for Blue Lithium, Google paid $3.1 billion for Double Click and MSN invested $240 million in a 1.6% stake in Facebook (valuing the company at roughly $15 billion).

comScore has been passionate (TV preacher passionate) about the potential of behavioural targeting from the start. We know that it is very helpful for an advertiser to know what a consumer is doing, in addition to their demographic attributes like age or gender. For example, if a consumer spends a significant amount of their time visiting online travel sites or comparing airfares, we may infer that they are planning a trip. By looking at the rest of their online behavior, we can then uncover additional insights about this segment such as where else on the Web they are likely to be found.

comScore collects behavioural data and has performed a lot of custom segmentation work for clients over the years. In 2007, we added behaviorally defined segments to our syndicated Media Metrix product, creating a new online behavioural targeting tool. This tool, comScore Segment Metrix: H/M/L, gives clients the ability to track, analyze and report online activity by consumer segments, to deliver robust behavioral profiles of these groups on demand.

comScore Segment Metrix: H/M/L gives our clients the ability to find the “travel planner” when they are not planning that trip, or the car enthusiast when they are not on auto sites. It lets us know where they search, what email they use and which sites they get their news from.

This behavioral insight will allow our advertising clients (and the agencies that represent them) to better target their activities, improving efficiency and increasing return on online marketing investment. Conversely, media owners looking for ad revenue can identify the advertising categories (e.g. Travel or Autos) for which their sites deliver a high proportion in their audience.

This is exciting stuff and in 2008 our industry will finally get to that ‘promise-d’ land of behavioral targeting! Look here for additional examples of behavioural targeting in the coming weeks.

For good reason, concerns about privacy and data security have become an increasingly visible issue for the marketing industry in recent years – perhaps most notably in the online sector. The unprecedented access to data provides innumerable benefits to both consumers and businesses alike. It also demands a great deal of responsibility regarding how that information is gathered, protected and used. In this context, I think it’s critical to draw specific attention to the discipline of market research, its use of data and the many benefits it provides to corporations, academia, and the overall economy.

For generations, market research professionals have conducted invaluable studies of consumer attitudes and behavior for both the public and private sectors. Surveys and behavioral tracking studies provide the information necessary to ensure sound economic and social policies in the public sector. Information on consumer behavior and preferences helps the private sector develop new and improved products, identify new health care needs, improve the ergonomics of the products we use, spend their marketing dollars more efficiently and create countless products and services that improve the quality of life for everyone. Without market research, corporations would be operating “in the dark”, inefficiencies and error rates would increase, more new products would fail and the resulting increased marketing costs would have to be borne by the consumer. That’s not a pretty picture.

The Internet is a good example of an industry that is critically dependent on credible third party research that provides anonymous information on issues such as e-commerce trends, Web site visitation statistics and audience demographics, search activity, online advertising effectiveness and insight into countless other online behavior patterns. As with traditional media, advertisers demand such independent information in order to confidently invest in advertising-supported Web sites, which depend on advertiser support to offer free services to consumers.

However, the growth of the Internet as a powerful new medium also introduces the need to define specific practices of privacy protection and data security, to create an environment in which market research can continue to play its vital role. At comScore, we adhere to strict tenets that the market research industry has fundamentally observed for decades. As such, we:

• Provide research participants with clear notice of software functionality and data collection practices;
• Obtain consent from participants prior to installation of any data collection software or collection of any behavioral data;
• Collect and use data exclusively for market research purposes, and not for purposes of marketing or advertising products and services to our research participants;
• Neither divulge, nor sell, personally identifiable information (PII) in any fashion to our clients;
• Strictly safeguard the personally identifiable information, privacy and anonymity of panelists through technological means and established security practices;
• Provide an easy method through which participants can cancel participation; and
• Participate in review and certification of our practices by recognized and objective third party authorities

I believe that the relationship between a research participant and all reputable market research companies that adhere to these practices is important, and should be preserved. Market research tracking software (we have dubbed it “researchware”) needs to be differentiated from “adware,” “spyware,” and “malware” and should not be treated in the same way as these intrusive and potentially harmful applications. We must not let the purveyors of spyware – the rotten apples – give market researchers a bad name.

There is clear precedent for such differentiation in the U.S. Federal Trade Commission’s creation of the Do Not Call (DNC) Registry and the Telemarketing Sales Rule (TSR). Following a comprehensive review process, the FTC clearly differentiated survey research from telemarketing calls, thereby excluding market research from TSR and DNC prohibitions.

comScore will continue to safeguard the future of online market research as a crucial source of information and insights for industry, government and academia. I urge other market research and marketing firms, universities, industry and consumer associations – and the media – to join us in supporting the researchware initiative, thereby ensuring the continuation of legitimate forms of research that benefit society and the global economy.

Previously: My First Impressions of Davos and Davos Moments 1-3.

My fourth Davos moment came when Magid and I participated in a three-hour exercise where we were essentially tasked with finding a formula for peace in the Middle East. Upon entering the meeting room, we were each assigned to random groups. Each group was given a set of facts about the fictional country, which loosely resembled Iran, Iraq, the UAE and “Dominania,” aka the United States. A fifth group consisted of private sector investors, presumably Sovereign Wealth Funds. The session was moderated by a well-known journalist from Al Jazeera. Most of the participants were high ranking officials from Middle Eastern countries. Interestingly, I believe that one U.S. government official and I were the only American-born team members.

As it happened, I was assigned to the “Dominania” group, and was selected by my team to be our ambassador to the other countries. We were given instructions to come up with a plan to achieve peace and stability in the region, while furthering the economic interests of our people. Our team had members from Saudi Arabia, Lebanon and Egypt, and I have to say, they were all bright, articulate, and eager to devise a plan that achieved these objectives. We each embraced our roles.

Together, we managed to devise some very interesting proposals. And I suddenly developed a newfound appreciation for the difficulty of Condi Rice’s job.

One thing that was clear to me from the exercise is that if we’re ever going to make progress toward stability in the Middle East, all sides are going to have to learn how to communicate, negotiate and collaborate in ways they have not before.

So, there you have it: just a few of my many, many Davos Moments. Oh, and one other magical thing about Davos: it is the only place in the world where my husband will drag ME onto the dance floor at 2:00 am in the morning. Those of you who know us understand the significance of that. For those who don’t, you’ll have to trust me when I say that was also a Davos Moment – one of the best kind.

This blog post originally appeared as my column in MediaPost's Online Metrics Insider on February 5.

Last week I was meeting with a client (Hi, Marlene!) when we started talking about the demographic composition of an entity's audience for Unique Visitors (UVs), as opposed to Page Views (PVs). As you can imagine, when you're chief research officer at comScore, you go to a lot of meetings where clients want to talk about... how can I put this delicately... let's just say, when they love their numbers, they seldom call.

Sometimes when talking with clients, I hear the concern that their site targets a specific demographic niche, and yet that niche comprises a disappointingly small portion of their UVs. Invariably I'll hear something like this: "But 85% of our registered users are left-handed Irish backgammon players aged 45-54!" The implication being, the profile of their UVs skews somewhat less targeted.

But here's the thing. The UV metric is democratic to a fault. Every visitor -- the accidental tourist who hits the site once for thirty seconds ever, and the core user who spends an hour a day there -- counts once and only once in the UV. There are a lot of things that can affect a site's UV demographic composition; one of them is search. Suppose that essence.com, which targets African-Americans, runs an article about Tiger Woods. It is possible that many golf fans who do not happen to be African-Americans will end up at essence.com that month because they searched for "Tiger Woods." This search-generated traffic will contribute to the UV metric, even as it dilutes the demographic target.

A better gauge of a Web entity's user profile would be to look at the composition of PVs, because heavy users will drive PVs and tend to counteract the diluting impact on the core target that a UV metric can have. In December 2007, for example, Media Metrix reported that 62% of Unique Visitors to aarp.org were age 50+ (eligibility for AARP kicking in at age 50); but 77% of their Page Views were accounted for by persons 50+, and 79% of their total minutes.

But there is another important reason to think in terms of pages when assessing a web entity's audience make-up. Ads are distributed across pages, not UVs. The more pages one consumes, the more ads one is exposed to, and the more likely that consumer is to see your ad. If an advertiser runs a campaign on a site, the audience profile of the exposures to that campaign will tend to mirror the profile of the Page Views, not the Unique Visitors. In the AARP example above, then, let's restate thusly: 62% of the aarp.com unique audience is comprised of persons 50+, but these persons see almost 80% of the ads.

With a behavioral targeting as opposed to demographic targeting construct, the difference can become even more pronounced. A specific automotive shopping site (here I've chosen to mask the property) had 4.2 million UVs in December 2007. 12% of these UVs (roughly 500,000) came from among the 5.3 million online users who were among the 20% heaviest visitors to automotive manufacturer websites in that month (and who are thus logically highly likely to be in-market for a new vehicle.) But 24% of their PVs, and 25% of their total minutes, came from these "auto intenders." One in four ads at this site will be seen by someone who is in the heaviest 20% of users of automotive manufacturer sites in the same month. When we expand our behavioral target to include the heavy and moderate users of automotive manufacturer sites, then about half the ads on this site will be seen by automotive intenders.

Two final points. One, when I talk about looking at the composition by Page Views here, I really mean, look at composition based on a measure of total consumption as opposed to the total UV (or "cume") audience. If you are concerned about the impact of AJAX on the efficacy of the PV as a metric, the same principle applies with respect to minutes as with pages. In radio, for example, the 36% of a station's cume who comprise the station's core audience consume 72% of that station's quarter-hours of listening.

And two: How about those Giants?

Many of the readers of this blog will probably remember the firestorm caused by comScore’s release of statistics regarding Radiohead’s unique online offer to “pay what you want” to download their new album, “In Rainbows.” comScore’s data showed that about 62% of the people who had initiated a download of the album did so without being willing to pay anything. Radiohead claimed that our data were “wholly inaccurate,” but refused to provide any of their own statistics.

Recently, in an interview Radiohead’s Thom Yorke let slip that the free download percentage they were seeing was actually “about 50%,” which is, in fact, not very different from comScore’s estimate of 62%.

Rather than leading to the band’s conclusion that the comScore data are wrong, I think Thom Yorke’s acknowledgment that the free download percentage was “about 50%” confirms that comScore’s statistics were probably very much in the ballpark. In fact, when taking into consideration the fact that Radiohead is probably counting the percent of completed downloads that were free, whereas comScore counted the percent of initiated downloads that were free, I believe the numbers are very consistent. I say that because we need to bear in mind that when Radiohead’s offer was announced, traffic to the download site was too heavy for the site’s server to handle and it wasn’t unusual to be put into a downloading queue. No doubt, a greater proportion of the people who didn’t pay anything were likely to abandon the download attempt if they had to wait in the queue than were people who had already used their credit card to pay something. This would lead to the band seeing a slightly lower percentage of completed downloads being free (~50%) than comScore’s 62% estimate of initiated free downloads.

That said, the inescapable conclusion – from comScore data as well as from Radiohead’s own comments – is that anywhere from 50 to 62% of the people who initiated a download of the “In Rainbow’s” album did so without being willing to pay anything.

While that may sound like a disappointing result, it’s certainly better than the experience of hip-hop artist Saul Williams, whose album “The Inevitable Rise and Liberation of Niggy Tardust” was released online in two versions (with the help of Nine Inch Nails frontman Trent Reznor, who financed and produced the album). One version could be downloaded free, while another higher-quality digital version could be downloaded for $5. CNET news.com reported recently that 82% of the people who downloaded the album chose to do so for free.

I think these results confirm that the majority of consumers – when offered the choice to download music free or to pay for it – will choose the free option. However, this doesn’t mean that this distribution method is economically a failure for the musicians. The fact that they get to pocket most of the cash could well mean that they end up making more profit than if they had distributed through a record label. Of course, we’ll never know for certain until someone discloses some detailed financial data, including profits. I wonder who will be first to do that?

I was recently interviewed by Eric Enge at Stone Temple Consulting about the search industry. We cover a lot of issues focused around the evolution of search as a marketing vehicle. You can read the full interview at http://www.stonetemple.com/articles/interview-james-lamberti.shtml

Like many of you, I’ve been following the 2008 presidential primary season with great interest. And while the first non-incumbent election in decades has made the early races even more intriguing than usual, it’s especially exciting for me to see the very important role the Internet has played in shaping the course of the primaries.

Back in 2004, former Vermont Governor Howard Dean’s campaign really woke everyone up to the power of the Internet in politics. The Washington establishment had become accustomed to the way elections had been won over the course of the past several decades –TV ads, newspaper media coverage, direct mail, and good old fashioned machine politics. But Dean, the firebrand Washington outsider who was never supposed to stand a shot at the nomination, managed to stir up a strong grassroots movement using the Internet and raised enormous sums of money online, propelling him to his unlikely status as the Democratic frontrunner. Though Dean’s campaign ultimately fizzled, it left an indelible imprint on American politics. The Internet was quickly changing the political landscape and candidates realized that they ignored it at their own peril.

Fast forward to the 2008 primaries. Every political candidate learned the lessons of Howard Dean and now has a well-organized Internet strategy, including high-powered, multimedia websites, personal profiles on MySpace and Facebook, and their own YouTube channels, as a starting point. But it’s not just about having a presence online -- the real significance of the Internet lies in its ability to cultivate a movement.

I’ve heard a few people call it “the Facebook election” in reference to the way this election -- and Barack Obama’s candidacy, in particular -- has excited young voters in a way that hasn’t been seen since the 1960s. The primaries have seen younger voters turn out in record numbers and take an active role in contributing their time, energy, and even money. The Internet is lowering barriers to entry and making it easier for many people to get involved and stay informed. It is also making it much easier for average folks to open their wallets and contribute with a few clicks of the mouse.

Money has played a more significant role than ever before, as candidates continue to set records for fundraising. In the past, raising money meant sending out mailers and making thousands of phone calls, which required a considerable investment in resources which typically yielded a slow trickle of contributions. Not anymore. Now the candidates can blast an email to the millions of people on their email list for a fundraising drive, and get them to contribute online in a matter of seconds. In the hours and days after Super Tuesday, both the Obama campaign and Clinton campaign parlayed their respective victories into massive online donor drives. Obama raised more than $7 million in just one day after Super Tuesday, while Clinton reportedly raised $10 million within just a few days. To date, both campaigns have raised well in excess of $100 million since the beginning of 2007.

Though the fundraising on behalf of both campaigns has been unprecedented, Obama has had a distinct advantage in online fundraising. This was apparent in the comScore data, which showed Obama with a 3:2 advantage versus Clinton in the number of visitors to his donation page in January (256,000 vs. 171,000). Interestingly though, if we assume that each visitor to the donation page was indeed a donor, Hillary’s website had a higher conversion rate (15% vs. 12%).

Looking at the traffic trends to the two candidates’ websites, there are a few interesting things to note. For most of 2007, visitation to their websites ran pretty much neck-and-neck even though Hillary was generally running much higher in the national polls and was considered by many the presumptive Democratic nominee. But as Obama’s campaign has seen a momentum surge in January and into February, we’ve actually seen visitation to his website display separation from Hillary’s, nearly doubling the number of visitors in January (2.2 million vs. 1.1 million).

The relative surge in activit