20 Comments

Summary:

Mahalo founder Jason Calacanis has called for a public boycott of comScore because of a controversial change in the way it measures web traffic, and has pulled Union Square VC Fred Wilson into the fight as well.

Think web metrics and traffic stats aren’t a contentious topic? Think again. Entrepreneur Jason Calacanis has started a crusade (or at least what he seems to hope will become a crusade) against web measurement firm comScore, whose traffic numbers have been criticized by many as inaccurate, and in the process he has managed to draw fire from the normally even-tempered venture capitalist Fred Wilson of Union Square Ventures.

What raised Calacanis’s ire was an announcement by comScore that the company is changing its measurement methods to try and produce better numbers, but that anyone who wants to get updated statistics has to pay the company $10,000 a year. Those who don’t pay will still be measured in the old-fashioned way, and as a result will likely continue to have much lower numbers than they would with the new system (Peter Kafka does a good job of outlining the changes in a post at Media Memo).

In his email newsletter, Calacanis called for a boycott of comScore, and also advised investors not to buy the company’s stock:

“Comscore is the technology industry’s biggest bully, and today I’m calling for an industry-wide boycott of their services. I’m asking journalist and bloggers to stop covering their stats, I’m asking advertisers to not use their services, and finally, I’m asking startup companies to not support their new and widely reported on “$10,000 to get your stats correct” extortion ring.”

Calacanis went on to detail a battle with comScore that goes back almost five years, involving the stats for his former Weblogs Inc. group of blogs (now owned by AOL). And then he called out Fred Wilson specifically for his support of comScore’s $10,000 “shake down,” saying the Union Square VC is “outspoken and an advocate of startups –- except with comScore. He’s turned a blind eye while letting his huge venture return in comScore color his objectivity.”

Wilson, for his part, lashed out at Calacanis in the comments on the Mahalo founder’s Posterous blog, saying:

“Jason…you don’t know what you are talking about. comscore (SCOR) is a public company. you can go look at their financials. they aren’t exactly printing money. it’s hard to measure the internet and they spend well over $100mm per year doing just that. they aren’t ‘shaking down’ anyone. their move to a hybrid model is a reaction to many of the criticisms that people have had of their panel model over the years. but it isn’t cheap to manage that data either. someone has to pay for this. or of course we could all just let Google do it for free. We know how that will play out.”

comScore’s chief marketing officer, Linda Abraham, also comments on Calacanis’s post, and takes issue with a number of his points about the service, including the company’s measurement methods (Abraham has also written a post for the comScore blog about the changes). She notes that comScore is actually more friendly to many web startups than Google, because it doesn’t do advertising.

“We make no apologies for charging for access to our reporting system. That is the only revenue source we have to cover our costs. In doing so, we make a ‘mafia like’ pre-tax margin of less than 9% . Google and Quantcast offer metrics for ‘free’ because they have an advertising supported model. They use the data they collect from users or publishers to sell targeted advertising. We chose not to have a business model based on selling advertising, because we do not want to compete with our clients who make a living selling advertising, and who need a neutral third party to provide audience data that is free from conflicts of interest.”

Calacanis’s crusade-mongering seems to have gained at least one supporter: Gil Penchina, a former eBay executive now at Wikia — the for-profit sister company of Wikipedia — offers a vote of support for the boycott in the comments on Calacanis’s blog, saying “We have been offered a 3 month trial – and I’m going to turn it down. I agree – we’ll be using quantcast going forward.”

Whether anyone else decides to join Calacanis’s anti-comScore bandwagon remains to be seen.

Post image and thumbnail image courtesy of Flickr user fPat

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  1. Sorry i’m a little bit perplexed. Doesn’t comscore (as most measurement companies) make their money by charging media companies and potential advertisers?

    As an advertiser, i would think that if the traffic statistics are biased based on who is paying and who is not, then i’m less likely to want their service bc it’s an inaccurate reflection of real traffic.

    While I take Fred Wilson’s point that someone has to pay for their service and that they obviously need to make money, I would suggest that business models that weaken the heart of what they do for a living are doomed to fail.

    Clearly i must be missing something……

    1. I think that’s a great point, Leigh.

    2. Well… in the print world, there are differing methods of audit which advertisers place different levels of trust in. I’m a little rusty on this, so don’t take my word as absolutely gospel truth, but as I remember, ABC in the UK audits in several ways, and publishers can choose between them. If I remember, for example, if you’re audited annually you are effectively audited on a single issue; six-monthly audits, on the other hand, are done across a spread of issues.

      As long as advertisers are clear how a publication is audited, and publishers don’t pass off one kind of audit as another, it’s not a big deal to them. Is this any different?

  2. Just wanted to say, Leigh, that “business models that weaken the heart of what they do for a living are doomed to fail” is a nice insight and a delicious turn of phrase. Props.

  3. Konrad (Quantcast) Sunday, January 24, 2010

    Some clarification on misleading statements from Comscore.

    Because we provide a free service, doesn’t mean we don’t take measurement seriously. In fact, we’re the only service to voluntarily submit to the Media Ratings Council for accreditation. We do make money from advertising services, by helping media companies create more compelling audience packages they can sell to advertisers. But, let’s be really clear – contrary to whatever Comscore might like people to believe, we do not sell any publisher’s data. We provide data to publishers so that they can satisfy the unique needs of the multitude of marketers who also use the Quantcast platform. Does anyone really believe that industry leaders such as NBC, Time Inc., MTV Networks, FOX, CBS, ABC, Hulu, Bloomberg, Reuters and The GigaOM Network would use us if we in any way caused damage to their business or brand?

    Measuring the Internet is hard and in recent comments Comscore rightly point out the complexity of dealing with issues that have been highlighted by the IAB (Internet Advertising Bureau) such as multiple tags and robots.

    So here’s a challenge for Comscore:

    By the end of this week – for every media property that you measure – publish an IAB compliant traffic report that shows your detection of double tagged content. While you’re at it, how about also showing the amount of traffic that can be attributed to robots and even how many page views are generated as result of auto-refresh. For extra points, how about showing what the auto refresh period is too? Then allow any publisher, who chooses, to make this data publicly available so everyone can take a look.

    We’re up for it, are you?

  4. I’ve listened to and read Calacanis over the last couple of years and in my opinion, the guy plays fast and loose with the facts and has a very poor knowledge of technology.

    My conclusion – don’t believe Calacanis.

    On the other hand, I have yet to have my BS meter go off when reading Fred Wilson.

  5. For comscore,It is a bad idea to introduce 2 tiers: 1 free with bad quality data and 1 paid with “good” quality data.

    This diminishes the trust of both tiers: free is useless, paid is cooked up .

    This opens up a huge opportunity for players like quantcast ,compete by beating the accuracy of comscore’s paid service with their free service.

  6. Comscore, Calacanis, Quantcast etc. « VCMike's Blog Sunday, January 24, 2010

    [...] Don’t Make That Much Money” (guess which side they came out on?), as did  TechCrunch, GigaOm, Comscore investor Fred Wilson in a comment, Scott Rafer, and many [...]

  7. All the fuss over metrics and how they are collected is a red herring. Advertisers used to buy media based on large numbers but that’s not the trend. Advertisers are increasingly able to measure their conversation rate. That’s the number that means something regardless of how total traffic is counted.

    Media companies will, again, miss out on revenues because the advertisers have so many ways to optimize their buys. They will get more and more efficient at placing ads in the right places at the right times and getting the best price for those ads. Media companies don’t have that same leverage. That’s why advertising will become a less important revenue stream.

    1. Hi Tom,

      Sorry but i’m going to have to completely disagree with you. I would say if things are getting more sophisticated (which in most cases they are not) clients are realizing that traditional online advertising is an awareness game and not about conversion.

      While things may change in the future, and I agree that we can become more efficient with buys, most of the justifications i’ve seen from the large media companies to clients on why this site or that site continue to be traditional traffic numbers (among other things).

  8. Steven Walling Sunday, January 24, 2010

    Just a quick clarification:

    Both Wikipedians and some Wikians might rankle at the characterization of Wikia as the “for-profit sister company of Wikipedia.”

    The only real connection between the two is that the founders of Wikia (Jimmy Wales and Angela Beesley Starling) are part of the Wikipedia/Wikimedia community. Otherwise they are completely separate organizations and communities of editors.

    1. I agree that the “for-profit sister company” description will rankle people. But to say that the only connection is Jimmy and Angela is an understatement. They’re the two largest sites built on MediaWiki, Wikia employees are among the top contributors of useful MediaWiki extensions, the companies have had arrangements regarding office space and server costs, and there have been other executives that spent time at both organizations. So “sister company” may be unfair, but the statement that the only real connection is Angela and Jimmy is not quite accurate.

  9. You are ALL missing the most amazing part about this fight. Jason Calacanis, a fairly small-time player in this industry, is attacking the integrity of Fred Wilson, a very serious industry heavyweight, in a very blunt manner. This almost borders on Libel because he is saying that Fred knows this is a scam and only accepts it to make a buck, which he may know isn’t true.

  10. SiliconANGLE — Blog — Sidestepping the Comscore Brawl Monday, January 25, 2010

    [...] [Mathew Ingram: Calacanis Takes on comScore -- and Fred Wilson] [...]

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