A new survey says the Time Warner property may get people to spend a lot of time there, but it's Google's dollar signs that count.
You read that right: that's above Google, MySpace.com, MSN and any other Web site you'd expect to be doing reasonably well.
Crazy, you say? You're not the only one.
Here's how it happened: Nielsen/NetRatings
Does this mean the Time Warner Internet subsidiary is--much to our surprise--somehow more valuable than Google? Not exactly. It's Google's ad dollars (about $10.6 billion annually and growing fast), not AOL's ability to get people to hang around, that really counts.
"You could say Google is very efficient in getting people where they want to go and thus it reinforces loyalty," said Greg Sterling, principal of Sterling Market Intelligence. "Somebody spending a lot of time on a site may be deeply engaged or may be struggling to find what they are looking for."
Nielsen/NetRatings seems aware that its new measurement method may have thrown some people for a loop. Thursday afternoon, the company sent a news release stating that it's still using more traditional measurement methods, such as total page views, pages per person, unique audience and average sessions per person.
In fairness, results have always differed based on who is measuring the traffic and how. For instance, Nielsen/NetRatings rival ComScore ranked AOL second among the top Web sites in the U.S. for May based on unique visitors, below Yahoo and above Google.
It's also understandable that Nielsen/NetRatings would want to look at how long people spend on a site given the widespread adoption of streaming media and applications like Ajax, which cut down on the need for page re-loads and thus make counting page views less of a meaningful metric.
Here's another point to show the ratings experts at Nielsen/NetRatings haven't completely jumped the shark: AOL, Yahoo and MSN/Windows Live were boosted by people doing e-mail and instant messaging on their respective services, while search sites are at a disadvantage because people usually leave the site quickly once they get their search results.
Using the more traditional unique-audience calculation, the top 10 list looks like this: Google; Yahoo; MSN/Windows Live; Microsoft; AOL; Fox; eBay; YouTube; Wikipedia and Apple, with AOL in the fifth spot.
But let's give the AOL folks their moment: The additional measurement seems to be giving them hope in the wake of declining subscribers and a move to an ad-supported, free Web-based service business model. The company has had numerous reorganizations and layoffs in recent years as it struggled to get back on track. And the new measurements give AOL execs hope that their "brand advertising" strategy has legs.
"Brand advertisers who are moving more and more dollars online are interested in a combination of reach and engagement and are leveraging what AOL offers to create a brand experience that they can't capture in other media," Mike Kelly, president of domestic Web sales at AOL, said in a statement. "This focus on time spent validates what advertisers are telling us...that pound per pound our audiences are more engaged."
AOL spokeswoman Amy Call said the fact that Nielsen/NetRatings has AOL ranked No. 1 in terms of time spent is a validation of AOL's efforts to keep people on the site for longer with relaunches of its news, sports and video sites and its Web-based e-mail service that integrates instant messaging.
But brand ads targeting engagement or time spent on a site are different from those aimed at Web searchers. And let's face it, "brand advertising on the Internet has been a poor second cousin to search," said Charlene Li, an analyst at Forrester Research. "Search ads are all about relevancy; getting people to the content they're looking for. On AOL it's all about people engaging with the brand."
Search advertising is valuable for an obvious reason: It often reflects a consumer's intention to buy something, said search expert Sterling. Whether someone spends a long time or a short time on a Web site is interesting, but it doesn't necessarily equate to ad dollars. More importantly, it doesn't mean that someone is "engaged," a big buzzword on Madison Avenue right now, said Tim Hanlon, a senior vice president at Denuo, a consulting arm of advertising agency Publicis Groupe.
"Exposure doesn't necessarily mean engagement," Hanlon said. "I could be distracted, taking a phone call or have left the room."