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Controversial ad standard in works

Two software makers are proposing a standard on how online ads should be counted, but conflicts soon arise between Web sites and advertisers.

Two companies that supply software for online advertising are proposing a standard on how ads are counted, a plan that threatens to exacerbate tensions between Web sites and advertisers in the short run.

Ad server software firm NetGravity and online ad service firm MatchLogic believe that more precise counting will benefit both publishers and advertisers. They also predict it will lure advertisers still on the sidelines into Web advertising.

The counting standard, as well as two similar initiatives from the same firms on ad tags and anonymous profiles of individual users, are being unveiled this week in New York at the @dTech, trade show. In addition, IBM, Narrative Communications and other companies introduced new initiatives to make Internet ads more compelling and easier to create.

"There a number of business ramifications in terms of how you count ad impressions," Netgravity CEO John Danner said. "Today publishers and agencies don't agree on how many ads can be served, so they spend an ungodly amount of time arguing."

The problem stems in part from the practices of America Online, large ISPs, and some major companies of caching popular Web pages locally to avoid long download times.

But caching badly skews counting how many individuals see a particular ad banner--hundreds of people could see an ad banner but be counted only once by current mechanisms. MatchLogic estimates that caching results in undercounting ad impressions by 76 percent, a figure audited by Ernst & Young.

The proposed standard is based on MatchLogic's "TrueCount" technology, which allows a site to count how many users see an ad banner. NetGravity has licensed the technology for its ad server.

Although the miscounting is widely acknowledged, publishers and advertisers have adjusted for it, so a more accurate counting method would upset established ad rates and other industry practices. For that reason, MatchLogic and NetGravity are recommending a fast-track consideration of their proposal, setting the standard by November 30 but allowing a six-month transition period so that both advertisers and Web sites can adjust gradually.

Mike Griffith, MatchLogic's chief technology officer, noted that many large advertisers aren't using the Internet, in part because measurement isn't accurate. "That's why it's worth the pain in the long run," he said.

The standards proposals will be submitted to committees of the Internet Advertising Bureau, a Web publishers' trade group, and Fast Forward, which counts big advertisers, ad agencies, Web publishers, and ad technology vendors as members.

In related news, IBM announced that a final version of its HotMedia technology, its Java-based toolkit for streaming media (audio, video, and animations) over the Net is now available for free download from its Web site.

Armando Garcia, IBM's vice president of Internet media, said HotMedia is free for Web sites but IBM will license the technology to software toolmakers to incorporate in their packages. IBM, which is positioning HotMedia for e-commerce and online ads, already has one licensing deal with Macromedia, and Garcia said discussions are under way with RealNetworks and Narrative.

IBM also named several online ad agencies that are using HotMedia, including OgilvyInteractive and Organic Media. Four ad-serving vendors also are supporting HotMedia and will serve HotMedia ads, including 24/7, DoubleClick, Engage/Accipiter, and NetGravity.

Narrative released version 3.0 of its Enliven technology for streaming media. It allows Web banners to be expanded as users click on them and lets users conduct e-commerce transactions.

Narrative requires Enliven users to let Narrative serve the ads, and the company has an agreement with ISP Digex to provide bandwidth for that service. A variety of ad networks and ad technology companies are supporting Enliven.