One of the promises of the Internet is the ability to target an exact individual. After all, unlike radio or TV, where messages are simultaneously broadcast to a broad audience, online advertising is served one impression at a time. Theoretically, if you know who the user is, you can perfectly target your message, or choose not to deliver it at all. A trend has recently emerged, whereby agencies can buy a ‘guaranteed’ online audience, in the sense that the people exposed fit specific audience criteria, such as male teenagers, females 18-34, or auto intenders, etc. The sellers are responsible for the guarantee, which they base on what they “know” about their users or visitors. It is however often the case that the level of knowledge about the individual user is less than perfect, and there is a substantial discrepancy between promise and reality. This naturally results in a lot of consternation and finger pointing that is ultimately bad for the industry.

To understand the source of discrepancy, we need to remember that user identification on the Internet is ultimately based on a cookie. If the cookie can be associated with some level of information about the visitor, it opens the door for targeting. The problem, however, is that a cookie is associated with a visitor at a particular point in time, such as a registration or a transaction, but may point to a different person at a later time. For example, you may register as a user of the Washington Post on your home computer, an event captured by a Washington Post cookie set at the time you registered. However, any user that visits the Washington Post from your computer at a later point, whether a spouse, a child or a friend, will be represented to the Washington Post by your registration cookie, which naturally leads the Washington Post to think it is actually you. If a campaign on the Washington Post seeks to target an adult like you, it may be actually reaching a different user on the same machine, which could be a person with very different characteristics – such as a child or teenager.

This situation happens much more frequently than many people realize. To quantify the incidence, we conducted a study on a number of popular sites to assess how frequently a cookie on the site is associated with multiple users. (Note: comScore identifies users in its panel based on a series of unique biometric identifiers including mouseclick and keystroke patterns and does not rely on cookies.) We found, as the table below illustrates, a site-average of 44% of cookies corresponding to a single user. In other words, a cookie points to a given user with certainty only 44% of the time. An average of 56% of cookies point to multiple users, which means they will point to a different user than the one who originally registered at least 50% of the time. That indicates an overall probability of at least 28% that a cookie will point to the wrong user.

Even if a cookie points to the right user, there is no guarantee that the self-reported demographics of the user are accurate. The degree of accuracy of registration information varies depending on the site and demographic variable. Many people misrepresent their age and income. Some teenagers represent themselves as adults to avoid access restrictions. Many people overstate their income and understate their age on a dating site. Others just enter the wrong information out of privacy concerns. The following example, based on comScore panel data, shows a handful of individual teenagers, each with conflicting self-reported age across a handful of popular social networking sites. The uncertainty about the accuracy of self-reported information compounds the errors caused by the cookie issues discussed above.

Where this leaves us is that it is virtually impossible to “guarantee” an audience 100%. Based on our experience, a delivery of 80% of the target is best-of-class. More often than not, the real delivery is typically around 50%, depending on the campaign, the quality of registration data, and whether login cookies are used or not.

Rather than setting unrealistic expectations, the industry might be better served with a measure of targeting lift – such as has been used in the direct mail industry for decades. A campaign that promises a 300% target lift means that the targeted audience has 300% the incidence of the target that would be achieved without targeting. These kinds of impressive target lifts are unique advantages for the Internet, and yet they represent goals that can be realistically met.

We strongly urge ad buyers and sellers to start a productive dialogue about this issue. The absence of a common understanding only serves to undermine the confidence traditional advertisers have in using online media -- which is obviously something none of us desire.

We just tabulated the holiday spending totals for the Saturday and Sunday of Thanksgiving Weekend (Nov. 28-29) and saw continued growth in online consumer spending after the double-digit gains of Thanksgiving Day (+10% vs. year ago to $318 million) and Black Friday (+11% vs. year ago to $595 million). Saturday and Sunday combined to show a growth rate of 5% tracking above the 3% growth rate for the holiday season to date.

For the full week ending Sunday, holiday spending reached $3.17 billion, representing a 6% gain versus the corresponding week last year. The strength of this particular week can be attributed to the significant discounting and promotional activity from retailers. But, lest we get carried away, we also have to remember how bad November of last year was for retail in general, which makes the comparisons to year ago somewhat easier.

As we await the completion of our spending estimates for Cyber Monday, we anticipate growth rates for the first big spending day of the season to continue to track above the season-to-date average. We are hoping to see enough strength to clear the $900 million daily spending threshold for the first time in history. That would certainly be a notable achievement in the history of e-commerce!

comScore chairman Gian Fulgoni will announce Cyber Monday spending totals live on CNBC tomorrow morning at 9:15 AM EST, which will be followed by our press release detailing the activity of the day.

This past Thanksgiving weekend was an interesting one for me. I got the opportunity to spend time with my adorable nieces, ages 3 & 5, and since I don’t yet have children of my own, I am constantly learning new things each time we get together. A few of the valuable lessons I learned this weekend include:

1. Children’s books are apparently meant to be read 2 to 3 times in a row, per sitting.
2. Some days kids will just wake up and decide that today is their day to be in a bad mood.
3. Marketing of retail items to children during the holidays – or any time for that matter – works. And perhaps more notably, search activity can serve as a proxy for interest and buzz.

Obviously today’s post is about item #3. Let’s take a look at Zhu Zhu Pets. Have you heard of them? They’re robotic hamsters that scurry around on the ground and make various cooing noises, and they’re apparently on the top of most kids’ “wish list” this holiday season, including my two nieces who barraged me with questions this past week about their likelihood of getting the tiny creatures for Christmas. A recent article from HuffingtonPost.com confirms that Zhu Zhu Pets are in fact the hot toy of the season (“Zhu Zhu Pets Madness” is compared to “Tickle Me Elmo Disease” in the article).

Zhu Zhu pets are actually a relatively new toy – they officially launched nationwide in August 2009 – and the rest, as they say, is history. Parents immediately started blogging about, searching for and trying to get their hands on these furry creatures. If you take a look at the below chart, you’ll see that searches related to Zhu Zhu Pets (including misspellings such as “Zu Zu Pets” and the like) spiked as soon as the toy stormed on to the scene. In August, we see over 129,000 searches for these branded terms, followed by 193,000 in September and up to 234,000 through October. As our November numbers are coming online, the searches and searchers are increasing still.

Parents who searched for and purchased their Zhu Zhu Pets early are likely heading into the holiday shopping season a lot more care free than those who are still trying to hunt down a Zhu Zhu Pet in time for Christmas. The lesson here is not just for moms and dads to start searching and buying early, though. Retailers and manufacturers can also gain a lot from analyzing search activity leading up to the holidays. They can use these insights to try to identify and hone in on the hot toys of the season, allowing them to make informed strategic decisions about production and inventory levels.

One of the fascinating things that’s become clear this holiday shopping season is that many retailers launched their marketing programs earlier this year, with a strong emphasis on price discounts and other financial incentives such as free shipping. I think retailers entered the season knowing that consumers were cash strapped and so offered a wide array of attractive promotions well ahead of Cyber Monday - and even Black Friday - in an effort to get consumers to open their wallets and spend earlier in the season.

Data from our friends at ShopLocal also show that the level of promotional incentives offered online was much higher in 2009 than in 2008. In fact, Thanksgiving Day is the only day in November in which the offer count was higher in 2008 than 2009 – which is kind of moot considering that the stores weren’t open on Thanksgiving!

To a large extent, it appears that retailers succeeded in generating sales lifts earlier in the season, as you can see in the table below, which shows the growth rates versus the prior year for online sales on Black Friday and Cyber Monday, as measured by comScore’s data:

Last year, strong online growth didn’t occur until Cyber Monday. This year, however, with promotions and discounts being offered earlier through aggressive programs that featured heavy use of e-mail and social networking programs, we saw online sales jump significantly on Black Friday, typically a day when the offline holiday buying season begins. I suspect that many of the larger multi-channel retailers concluded that there was no reason – in today’s day and age when many consumers would rather shop online from home rather than fight the crowds in retail stores – to not leverage Black Friday as an online shopping day. This activity appears to have pulled some of the growth one might have expected on Cyber Monday over to Black Friday instead.

Another interesting observation from comScore’s data is that, as in prior years, over 50% of all sales on Cyber Monday in 2009 occurred from work computers. While, at first blush, it might be tempting to think that, with broadband connections now prevalent at home, consumers would shop online from home, the evidence is clear that many consumers still prefer to shop online at work. In fact, this why we have always seen a jump of 50% or more in online buying from Black Friday (a work holiday for most) to Cyber Monday (when most consumers return to work). Privacy is an important driver of that behavior, since one can shop and buy gifts at work without concern that a family member might be looking over one’s shoulder. In addition, most workers have some time to themselves during a typical workday (e.g. lunch breaks) when they can shop online without fear of retribution from their employer.

One final note. It’s important to recognize the impact that social network marketing programs are likely having this year since a marked change appears to have occurred in the marketing efforts of many retailers with the inclusion of social networks in their marketing efforts – presumably to take advantage of their cost effectiveness and extensive reach on consumer behavior. In a recent comScore survey, fully 28% of consumers said that social media has had some influence over their holiday purchase decisions already this season. Consider that Twitter had 19 million site visitors in October of this year, up 12-fold vs. year ago. In that same period of time, Facebook’s visitor base has more than doubled, rising from 45 million monthly visitors in October 2008 of 2008 to 97 million today. That’s an incremental 52 million people using the service in only one year! With this kind of reach, it’s clear that social networking can play a prominent role in any retailer’s communication programs.

comScore just released its November 2009 Media Metrix data, which shows an important milestone being reached by a very popular social networking site. For the first time in its history, Facebook.com surpassed 100 million monthly U.S. visitors joining a very select list of web properties reaching such a threshold (the others are Google Sites, Yahoo! Sites and Microsoft Sites). Facebook also ascended one position in our monthly Top 50 web property rankings to become the 4th largest property this month, the highest position it has ever reached.

Below you can see a chart of Facebook’s amazing growth trajectory over the past five years. In November 2004 it had a U.S. audience of about 2 million visitors and today it stands approximately 50 times that number. Perhaps even more impressive is that clear acceleration in growth we’ve seen over the past year along, in which Facebook has more than doubled its U.S. audience.

Facebook also accounts for 5.5% of all time spent online in the U.S. (up from 2.5% a year ago) consuming a significant percentage of the average U.S. Internet user’s attention online. Only time will tell if Facebook is able to continue to grow like this through 2010…

As this decade winds down to its conclusion, comScore would like to take a moment to reflect on what a decade it’s been. Founded in 1999 by our CEO Magid Abraham and Chairman Gian Fulgoni in the heyday of the dotcom bubble, comScore was one of only a few young Internet companies to survive the dotcom bubble burst in 2001-02. Here the company stands today, a full decade after its founding stronger than ever, as the leading global provider of digital market intelligence. From its humble beginnings, comScore now serves more than 1,200 clients and employs 500 talented individuals in offices around the globe.

As we look back fondly on reaching this milestone in our company history, we invited a few of our friends in digital media to share a look back to the early days of the Internet industry, reflect on where we’re at now, and ultimately what tomorrow will bring us. Please enjoy the video below, which includes the thoughts, reflections and insights from some of the brightest minds in our industry: John Battelle, Andrew Braccia, Mark Cuban, Esther Dyson, Wenda Harris Millard, John Markoff, Dave Moore, Tina Sharkey and Fred Wilson. We hope you enjoy it.

From all of us at comScore, we wish you a wonderful holiday season and a happy new year!