ComScore tries to allay Google concerns, but opens door to question its data

ComScore tries to allay Google concerns, but opens door to question its data

Summary: ComScore in an effort to allay the concerns of Google, which is likely to be a massive customer, may be opening the door for further questioning of its data.In a blog post on Friday, comScore tried to put its finding that Google paid clicks were flat (actually down a smidge) in January (Techmeme).

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ComScore in an effort to allay the concerns of Google, which is likely to be a massive customer, may be opening the door for further questioning of its data.

In a blog post on Friday, comScore tried to put its finding that Google paid clicks were flat (actually down a smidge) in January (Techmeme). If you recall, Google shares were crushed on the news.

ComScore writes in a riff that was likely inspired by a call from Google:

Earlier this week, comScore released its January 2008 qSearch paid click report, which showed a 7% sequential decline vs. December ‘07, and a flat annual growth in paid clicks for Google. Moreover, the number of paid clicks per Google search query declined by 8% from December to January, suggesting that consumers are clicking less on search ads, possibly reflecting a weaker buying appetite. The information triggered a flurry of reactions in the media and the financial community that centered on two concerns: 1) a potentially weak first quarter outlook for Google, and 2) an indication that a soft U.S. economy is beginning to drag down the online advertising market.

While we do not claim that these concerns are unwarranted, we believe a careful analysis of our search data does not lend them direct support. More specifically, the evidence suggests that the softness in Google's paid click metrics is primarily a result of Google's own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur. In addition, the reduction in the incidence of paid listings existed progressively throughout 2007 and was successfully offset by improved revenue per click. It is entirely possible, if not likely, that the improved revenue yield will continue to deliver strong revenue growth in the first quarter. Separately, there is no evidence of a slowdown in consumers clicking on paid search ads for rest of the US search market, which comprises 40% of all searches.

That language from comScore is notable. The takeaways:

  • Our paid click data isn't that big of a deal;
  • Google is our gravy train and we better circle the wagons around it;
  • All of that said our data is still worth having of course--and probably right.

That's a lot of tap-dancing folks. And to make matters worse this tap dancing in the name of protecting Google is downright dangerous to comScore's business. The dirty little secret in the Web business is that a lot of folks aren't so enamored with comScore's data. I've questioned it openly. I simply don't buy the panel model.

But by trying to explain its data better in a thinly veiled attempt to undo Google's hit comScore is showing it will budge if the customer is big enough and pissed enough. Guess what happens next time comScore's data doesn't help out a big Internet giant? You got it. More questions. More calls from customers. And more questions about the underlying data. The future mission: Get comScore to backtrack on its data that you don't agree with.

It's a dangerous cycle. And comScore just opened up a Pandora's Box.

Topics: Google, Browser, Data Centers

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4 comments
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  • I always thought comScore was known...

    for dishing out spyware. Was that not the rep they once had?

    Plus, I don't think I have ever clicked on a search add. Do that many people really do click. Come to think of it, I don't think I've ever witnessed anyone else click on a search add.
    bjbrock
  • spyware rep

    I don't know if it's a spyware reputation as much as it that they have software that can be used that way.

    http://blogs.zdnet.com/security/?p=772
    Larry Dignan
  • RE: ComScore tries to allay Google concerns, but opens door to question its data

    Larry:
    Many of the pieces on this entire subject have been long on opinion and short on data. Yet, when a very detailed data analysis is presented, people take a cynical view of it. The piece I wrote proves what many people, including yourself, have hypothesized but did not have the hard facts to prove.

    I am not trying to say our data is not a big deal. The market reaction speaks for itself. I am just trying to analyze what the data is really saying, rather than run with one number and claim the sky is falling. Once again, the world cannot be described by a simple metric, regardless of how powerful it is.

    I was in NY at a Jefferies investment conference last week. In every single conversation I had, people wanted to know our insights about the Google data. I showed a couple of slides on the data during comscore's presentation to answer everyone's questions in an efficient manner. The more we talked the more convinced I was that we needed to take a deeper look and share it.

    Some people have taken issue with my assertion that last week's panic was bad for the Internet industry. The simple fact is that virtually all of the Internet is advertising supported. When people believe that the online advertising market turned sour, it affects almost everyone, not just Google. Startups have a harder time getting funded. Large companies cut back on their investments. Investors flee to the sidelines. The talk about recession, including the online ad market, is a self fulfilling prophecy. If you think Wall Street is reacting based on a thoughtful conclusion, then you should tell people about your faith in the stampede of the crowd. Otherwise, why should we not point out what an in-depth analysis really says?

    By the way, Jim Friedland, who you mention in your previous blog, is not a Credit Suisse analyst. He works for Cowen and Company.

    Magid Abraham
    mabraham2
    • Thanks for the reply

      It's insightful. Overall, what you launched after the fact should probably have been posted on day 1 IMO.
      Larry Dignan