ComScore Claims to have a Larger Panel

Wednesday, July 15, 2009
By Faisal Laljee

ComScore (SCOR) and Nielsen are both market research and audience measurement businesses. They have a “panel” of independent internet users whose activities they monitor (with permission of course) and based on the internet usage of this panel, they publish broader internet measures like unique visitors, visits, page views, time spent etc. for most of the highly trafficked web sites on the internet. They also work with top internet companies to sell their portfolio of digital media measurement services that allows their clients to determine how their site is doing, where they get their traffic from, who they lose their traffic to, how their competitors are doing in terms of online traffic and so on.

Nielsen, in a recent press release titled “Nielsen Launches Largest, Most Representative Online Audience Measurement Panel in U.S.” stated that their panel of Internet users numbered more than 230,000, bigger than any rival’s panel. This sparked a quick reaction from ComScore whose Chief Research Officer Josh Chasin responded that his company’s panel was bigger with 300,000 users. “Our panel is larger!”, he claimed. Well, not exactly, but you get my point right?

As for the stocks, SCOR has been an interesting stock, but I am not a buyer. In fact, I am skeptical of these two companies using a sample size of just 300,000 or so to project the behaviour of 100 million internet users. To me, their sample size is not statistically significant, but unless someone else can measure a broader audience, ComScore remains the official word on internet usage statistics.

Also, companies like Hitwise and Compete are nipping at the heals of ComScore with their own rival panels and technology, which proves that this business is not a very unique one and has little to no barriers to entry.

– Faisal Laljee
Full Disclosure: I do not own SCOR but my position can change anytime without notice.

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