I would like to take this opportunity to respond to a comment from Willy Quintinella posted in response to my recent blog entry “Why Google’s surprising paid click data are less surprising.” Willy raises an important question when he asks why comScore didn’t include any interpretive analysis when we initially issued our monthly paid click data and I believe his question deserves a response.

It is important to put in context how this Google episode came to be. It resulted from instantaneous market reaction to the comScore January paid click data – a regularly released comScore statistic – that we released to our clients, which include search engines, sell-side financial analysts, and advertising agencies (comScore does not release its paid click data to the media). comScore’s Wall Street clients use our data to draw their own conclusions, and, as in the case of financial analysts on the sell-side, incorporate it into research reports they publish to the investment community. Typically, comScore’s data represent one of many elements that analysts rely on to formulate their opinions. For example, comScore does not have access to important data elements such as price-per-click for forecasting revenues or to costs for forecasting earnings. This is why there is a great synergy between the services we provide and the final research product delivered by financial analysts.

We provide billions of numbers to our clients every month and we view our primary mission as ensuring that the information we release is as accurate and actionable as possible. While some clients buy additional advisory services that we provide on a case-by-case basis, we typically do not publicly comment on the financial or the competitive performance of our clients. In this particular case, however, we felt obligated to do so because there was such a dramatic public reaction to a few statistics, with a few financial analysts (in their published research reports) -- and subsequently the media -- citing these statistics as proof of weakness in online advertising as a result of a softening economy. The majority of media articles even attributed this conclusion to comScore (“comScore said”), whereas the reality was that we had never stated any conclusion. The data were certainly provided by comScore, but the conclusions were not. As we looked deeper into our data, we found much stronger support for what some industry observers have hypothesized regarding the impact of Google’s own quality efforts on the negative trends in their paid clicks. Because of this, we felt we needed to set the record straight on two counts: 1) Our data did not support the conclusions that were being incorrectly attributed to us, and 2) The number of paid search clicks is only one driver of revenue for a search engine. Pricing is also a critical component and, as later confirmed publicly by Google executives, one that turns out to be closely related to Google’s quality efforts, since these efforts affect minimum bid prices and overall supply / demand.

But this issue had, for the most part, been ignored or discounted by Wall Street and the media in their analysis and reporting. So, we stepped up to the plate and provided our interpretation of what we thought was happening. I am happy that recent comments from Google, appear to support our explanation of the reason for the decline in paid clicks and the impact on click conversion and value.

On the positive side, there is learning coming out of this experience. We are studying service enhancements in the form of additional metrics that make it easier for financial analysts to reach a thoughtful opinion under extreme time pressure. For example, I found that aggregating Google’s search engine competitors together provided insights that were otherwise harder to see because of the variability that exists across individual search engine. While all the components to do this are available as part of what we already deliver, we can, by directly providing the aggregation, make it easier to draw a comparison between Google and the rest of the market. In addition, in the future we plan on delaying the release of comScore’s data until after the close of the day’s trading. This will provide analysts more time to analyze the data and publish their reports before the financial markets open the following day.

This last Monday, I delivered the opening keynote at OMMA Hollywood, a presentation titled "Warp Speed: Online Media, Marketing and Advertising by the Numbers." Joe Mandese of MediaPost caught up with me shortly after the presentation. Click here to check out the interview: we discuss the offline and latent impacts of online ad campaigns and how to prove their ROI.

Last week, I gave the opening keynote presentation at OMMA Hollywood titled "Warp Speed: Online Media, Marketing and Advertising by the Numbers." In this presentation, I addressed the state of Internet advertising and the need for metrics other than “clicks” when measuring the ROI of online display advertising that is focused on brand-building objectives as opposed to direct response. In the presentation, I also discuss the benefits of using search as a branding tool.

I would be happy to share the presentation with you. If you are interested, please request a copy at www.comscore.com/request/OMMA.asp

Earlier this year on this blog, I promised to share data about Universal Search. Below is the industry’s first look at the data, shown for the first time publicly at Search Engine Strategies NYC last week on the “Orion Panel” – an exciting session with John Battelle from Federated Media, Lyndsey Menzies of Big Mouth Media, and Jack Menzel from Google.

comScore’s findings are based on Google search queries observed through comScore qSearch during one week in January 2008. During this period we observed over 220 million Google searches containing a universal result, out of 1.2 billion searches overall:

1. 17% of the queries had a universal result
2. 16% of total Google clicks were sourced from a page where a universal result was present
3. 14% of paid clicks were sourced from result pages where a universal result was present

Assuming the pattern of 17% holds, we’re talking about approximately one billion monthly universal search queries on Google alone. This is not an insignificant number and shows that universal / mash-up / blended search results are clearly now in play. It will be interesting to track how this grows (or not) over time.

For the search marketing industry, the shift from 17% total universal search results to 14% paid clicks is a vital stat. In other research situations, a move of 3 percentile points is hardly worth mentioning. In the world of search – where decimal points of change move tens of millions in commerce – it’s a big deal. It means that the presence of a universal results yield fewer clicks and will create more competition among search marketers. However, these changes should improve the referral quality among those consumer that do click.

In my opinion, major search engines like Google are adapting their result page to best meet the needs of the consumer – even if it results in challenges for or criticism from marketers. If the engines lose the consumer, they will lose their business. It will be incumbent upon the marketers to quickly adapt and create videos and images that are relevant to the consumer and make them available to the search engines. Not an easy task given the legal and technical hurdles many major brands face, but those who do it quickly will have a competitive advantage in the search arena.

NEXT: Penetration by type of universal result

I caught an interesting article by Matthew Mosk in the Washington Post today discussing Barack Obama’s success at fundraising online during this Presidential primary season. His campaign’s success at attracting online donations is likely a function of several factors, including the general enthusiasm for his candidacy and the demographics of his supporters, many of whom are younger and more tech-savvy. But the article focuses on another key factor, which is that his campaign has been very adept at understanding and using the online channel in a way that hasn’t really been done in the past.

In a lot of ways, political campaigns are like traditional advertisers. They have an inherent aversion to risk and are therefore reluctant to try out new tactics, relying – perhaps too heavily – on strategies that they’re comfortable with. The irony of this approach, however, is that the campaigns that challenge the status quo and understand the dynamics of the changing landscape are usually the ones that perform better than expected. Before anyone had any idea that the Internet could be used effectively as a political tool, Howard Dean rode it to his unlikely frontrunner status for a good portion of the 2004 Democratic primary campaign. And we see similar examples in the business world of companies who start doing things differently, in ways everyone said couldn’t be done, that suddenly emerge as top dogs. Google, of course, comes to mind.

Perhaps because of these similarities, Barack Obama has drawn comparisons to companies like Google and Apple – a reflection of his brand and a newer, more cutting-edge approach to politics and campaigning. Both anecdotally and empirically, I’ve seen abundant evidence that this is the case with respect to his campaign’s online efforts.

The Post article said that the Obama campaign spent $2.6 million in online advertising in February, more than Hillary Clinton by a factor of 10. In January, he spent about $768,000, still outpacing Clinton by a factor of 4. I decided to do a little digging in our Ad Metrix advertiser data to see what it showed, and not surprisingly the Obama campaign was way out front in his online advertising efforts, serving about 58 million display ads in January.

And Clinton? Her display advertising efforts didn’t even register above our minimum reporting threshold, indicating display ads are an immaterial part of her advertising strategy. What a lost opportunity for her campaign!

We’ve conducted several studies that have demonstrated the powerful brand-building impact of online display ads, and the Obama campaign seems to understand that. Here’s a look at their most-served ads in January.

What’s interesting is that each of the top ads being delivered includes an invitation to “Join Us,” which has probably been a very effective tool in building a broad email and potential donor base. That the vast majority of his ads (nearly 80%) ran on Yahoo! Sites and Microsoft Sites, both of which skew towards older than average age segments, is an indication that his campaign is using the Internet as a vehicle to reach out to new voter segments rather than going after the low-hanging fruit of young voters.

So it’s no wonder that Obama has been able to raise nearly $100 million during the first two months of 2008 alone tapping a large base of small dollar donors online rather than the more traditional model of prying large donations from a small base of wealthy donors. It’s also why the Obama campaign will serve as the model for how all future political fundraising efforts are conducted and why the Internet will be central to those strategies.