Nielsen and IAB Display Ad Reports Off by $540 Million

A little addendum on some big numbers:

As a followup to my piece today on differences between online ad reports from TNS, Nielsen, and Interactive Advertising Bureau/PricewaterhouseCoopers, not only are the methodologies used by IAB far different from TNS and Nielsen, resulting in disparate ad spending growth rates, the actual dollar amounts estimated by Nielsen and IAB (TNS won’t divulge theirs) are far off, too.

Nielsen’s estimate for online display ad revenue in the first half of 2009 was $4.3 billion, according to my source there. The IAB, which measures several formats, estimated display spending ONLY in the same period at $3.76 billion. They include banners, rich media, video, and sponsorships in that number, yet the IAB’s estimate is much more conservative: $540 million lower than Nielsen’s display ad estimate in fact.

As I detail in my story today — and in a previous piece about the Nielsen and TNS ad spending reports more specifically — the IAB looks at ad revenue numbers provided by ad sellers and in tax filings, while the others estimate based on audience traffic, ad impressions and rate card prices.

I guess what I’ve been wondering lately, and why I’ve attempted to inspect online audience and ad measurement methodologies in recent years, is what are we supposed to make of these numbers if they’re all so different? Publishers have been whining about third party audience measurement for years, but what about these spending reports?

They’re among the few barometers we have for measuring the health of the online ad industry, and as far as I can tell, the state of the reports themselves could use a checkup.

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