Questions for Dynamic Logic’s Nick Nyhan

The acquisition of Dynamic Logic by Millward Brown earlier this summer nailed several marketing trends at once: It illustrated the supremacy of ad effectiveness measurement on traditional brand advertisers’ priority lists. It came at a moment the rallying cry of online/offline integration had reached its fever pitch. And it hit about halfway through the long string of acquisitions that has characterized the digital marketing space this year.

Triumphant a time as this is for Dynamic Logic, it’s also a trying period for online measurement in general. Web site and marketing metrics are facing major challenges from Internet users who feel confused and besieged by unseen adversaries. In response, they’re blocking cookies and legit software used by panel-based research firms.

Nick Nyhan, Dynamic Logic’s founder and president, took some time this week to field questions from ClickZ about these and other issues.

Q.What did Dynamic Logic’s acquisition by Millward Brown mean to you personally?

A.The acquisition meant a lot to me, and others who had been with Dynamic Logic since the early days. It felt good to pay back investors and have them say thank you for working so hard. [It’s] a relief, when you have competed against large companies, to then feel… the resources of a bigger company being supportive rather than competitive. It meant there were other people I respected that we could turn to for guidance. It meant more career paths for the people in Dynamic Logic, as Millward Brown has 65 offices around the globe and an amazing client roster. The goals of Dynamic Logic are still the same, but we now have more strength and people pulling for us.

Q.What’s it mean for Dynamic Logic clients and the larger marketing community?

A.Every client that was asked about this deal in due diligence was excited about this acquisition, on both the Dynamic Logic side and the Millward Brown side. The reasons were offline and online expertise, enhancement to cross media measurement, having a wide range of options and different price points, fusing traditional analysis with innovative tech. That said, we are being careful to stay focused.

Q.It seems online media measurement — whether it be cookies, panel-based studies, or verification of sites’ impression counts — is generally besieged. You agree? What are some of the key issues driving the various problems of Web audience and marketing research?

As online continues to gain in importance and budget-share, there is increased inspection of the metrics that go along with it, but that is good.

We need to avoid black boxes, be open and build confidence in our approaches. It only makes things better. What worries me is not the inspection, but the arms race mentality I fear emerging between marketers, measurement companies, and consumers. It has peaked lately with spyware and identity theft, coming on the heels of viruses, spam, etc. These issues are making consumers very fearful of any engagement that involves data collection, including cookie-based systems, panel systems, and survey systems; this hurts everyone in the measurement space, and every company that relies on measurement. The interactive industry and the research industry needs to be more proactive on addressing these concerns before [they’re] so widespread that the basic measurement systems are questioned and interactive is seen as less reliable.

Q.Educating consumers on the value of tracking behavior has been a hot topic of late. What’s it going to take to do so? Is it really a feasible undertaking?

A.Consumers are increasingly aware that their data is worth something. They are also savvy about what marketing is trying to do and they are not afraid to challenge the rules of engagement. The industry needs to find ways of diffusing an arms race mentality by simply making its case more openly: “Here is a cookie, here is what it does, here is how it can be used, here is why we need it. If you want to enjoy this content for free, we need some basic measurement tools, including cookies. If you don’t want them, you can block them in your browser and it will change how you use our site.” If this message comes from brands they know and trust, it will help clear up some confusion. But ultimately, consumer education will not help unless it is accompanied by regulatory mechanisms, either through software or seals, which reward good (cookie) behavior.

Principles need muscle behind them. The industry also needs to synch up with anti-spyware filtering software players and their emerging guidelines so they are not flagging and deleting cookies or software that a consumer has knowingly accepted. All of this is slowly happening but at a pace that continues to allow consumer trust to be eroded.

Q.How are things going with Safecount.org? What value do you see it adding to this mission?

A.The list of people supporting Safecount.org is growing and that is encouraging. As more people learn about the levels of consumer mistrust and [its] impact on measurement and the advertising/publishing business models, they are supporting Safecount to help advocate for middle ground solutions.

After consulting with a lot of people on different sides of this debate, we are focusing Safecount on consumer education and pushing for regulation systems. We want to help the industry explain itself to consumers in a more straightforward way, and we want systems in place so that good companies who give consumers notice and choice are rewarded for doing the right thing. Without ways to separate good from bad, digital marketing can feel like the wild west, where competing militias are battling for control over a town without a sheriff, and consumers have to arm themselves for protection.

Q.What about the gaming world? As more marketers push their advertising into games, do you expect to begin measuring the effectiveness of those campaigns?

A.Games are becoming a serious reach channel, especially to young men. We need to follow the consumer.

Q.Describe a day in the life of Nick Nyhan.

A.I get up and play with my son. Then I go to work thinking about people — Who are the people we need to talk to and help today? — whether [they] be internal or external. I spend a lot of time doing email ping-pong, but also get out and talk to people face to face. I’m trying to use the phone more and email less, since it is about people on both ends.

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