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`INTERACTIVE: MEDIA & MARKETING:
`MATCHLOGIC SERVICE SOLVES CACHE
`PROBLEM
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`By Rick E. Bruner
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`Published: October 13, 1997
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`Ad management company MatchLogic has cracked the vexing Internet advertising dilemma of ads cached on
`proxy servers with its new product, TrueCount. The service tracks and manages ad impressions that current
`site analysis tools can't see because the ads are copied, or "cached," onto proxy servers that various
`organizations, such as universities, use for their members.
`Another startup, Next Century Media, is also developing a product that addresses the ad
`caching problem, according to sources. Company officials, however, did not return
`phone calls by press time.
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`COUNTING ADS NOT TRACKED
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`Before announcing TrueCount today, MatchLogic (www.match logic.com) used the
`service to survey millions of ad impressions across more than 200 sites. It concluded,
`with Ernst & Young's verification, an average 76% more Web surfers are seeing ads
`served from proxy caches beyond what sites currently track. At peak times on heavily
`trafficked sites, uncounted ads ranged as high as an additional 675% of what's now
`tracked, MatchLogic found.
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`"This raises the bar in terms of providing more complete activity reporting" for online
`advertising, said Michael Lavery, president and managing director of the Audit Bureau
`of Circulations. "We have reviewed [TrueCount], and it works as [MatchLogic] says it
`does. . . . It allows for accounting of [online ad] activity heretofore not accounted [for],"
`he said.
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`LOSING CONTROL OF ADS DELIVERED
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`Institutions with many Internet users, such as large companies, universities and Internet
`service providers, regularly use proxies to cache Web content from popular sites so their
`users don't download the same files repeatedly across the networks. While the caches
`improve bandwidth, they have long confounded commercial sites and advertisers, which
`lose control of both the targeting and counting of ads behind the proxy firewalls.
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`CACHE-BUSTING SLOWS DELIVERY
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`Presently, many sites employ "cache-busting" techniques that force the delivery of ads
`and other content through the proxy servers for each user who requests a page. The
`down side of cache-busting, however, is it slows the delivery time for users, which harms
`the viability of the Web medium.
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`TrueCount-which MatchLogic built at the behest of its largest client, General Motors
`Corp.-delivers the best of both worlds.
`
`It works in harmony with proxy servers to help manage bandwidth while keeping
`control of the ads' distribution. Where possible, it serves ads out of the institution's local
`cache or from the nearest of TrueCount's 12 worldwide mirror sites. Thus, it not only
`counts the total number of impressions shown behind proxies, but it continues to
`manage the ad frequency and other targeting issues to individual surfers behind the
`firewalls.
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`"The implications for the market are vast," said Evan Neufeld, an analyst at Jupiter
`Communications. He believes if TrueCount is widely adopted and if competitors like
`Focalink and Imgis implement similar technology, the cost-per-thousand rates of
`banners should drop.
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`PUTS ADVERTISERS IN DRIVER SEAT
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`"Everyone is wondering which way CPMs are going these days. . . . [TrueCount] puts
`advertisers in the driver's seat," he said.
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`MatchLogic, like Focalink, concentrates on selling its turnkey ad management service to
`ad agencies and individual advertisers, such as GM and, less so, to sites. With TrueCount,
`advertisers will now be able to count their impressions more accurately than the sites
`that host the banners. Advertisers, Mr. Neufeld points out, will be unwilling to pay the
`same CPM to reach the 76% additional impressions they were previously getting for free.
`Therefore, he said, sites will be forced to lower their CPMs for such customers.
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`SITES MAY NOT BE HAPPY
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`"This doesn't come at the best time for the marketplace," said Mr. Neufeld, speaking of a
`possible reason for prices to drop while the market is still immature.
`
`Sites still struggling to sell their existing inventory-which are the majority of commercial
`sites-may not be happy to learn that, in fact, their true inventory may be some 75% to
`600% higher than what they're trying to sell already.
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`The more popular a site is, the higher the percentage of cached advertising, said Pete
`Estler, president-CEO of MatchLogic.
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`On the bright side, he said, "not only is the Internet audience larger than we thought, it's
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`also more affluent," referring to a presumed majority of high-demographic corporate
`users with fast Internet connections.
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`"Counting is the basis of [the online ad industry's] economic model," Mr. Estler said. "
`[Revenues are] based on our ability to count to 1,000. As an industry to date, we've
`shown that we can't count to 1,000."
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