Marketing executives claim, "Half the money I spend on advertising is wasted; I just don't know which half." With more than half of all ad dollars spent on broadcast media like television and radio, advertisers need to have a way to determine the exposure and effectiveness of these media. The people meters and diaries that firms have used to track television and radio audiences for decades provide some estimates, but they do not track the other media (like the Internet) that are also key today. Integrated Media Measurement Inc., also known as IMMI, uses existing technologies to measure broadcast audiences in a new way. IMMI recruits adults and teens, aged 13 to 54, to carry a special cell phone at all times for two years. The phone captures 10 seconds of audio from its surroundings every 30 seconds, 24 hours a day, seven days a week.

The samples are then compressed into small digital files and uploaded to the company's servers where they are compared to samples of the media being measured using a technology called acoustic matching. This allows IMMI to measure the number of people who have been exposed to an advertisement not only on television or radio but also on digital video recorders, game players, cellphones, DVDs, and CDs. Based on the data, IMMI produces real-time reports that get to individual behavior, not just group averages, thus connecting advertising to consumer behavior more accurately than possible with older methodologies. IMMI can answer questions such as the following: How many people are actually watching my network including outside the home and with time-shifting devices? How many people actually see my commercial?

What songs cause radio listeners to change stations? What programs cause TV viewers to change channels? Of course, IMMI's research methodology is not without potential problems. For example, IMMI only tracks audible media-not print or Internet advertising. Furthermore, many people are unwilling to participate in the study because they feel the technology is an invasion of their privacy. IMMI has been able to recruit an initial 3,000 panelists, but it will have to work hard to replenish that group when its two-year participation ends.

While the cell phones only tracks broadcast media, many people are concerned that the company will also record their personal phone conversations. For IMMI and for advertisers, the future is unclear. IMMI founders agree that this is not the last step in the attempt to more accurately understand media usage and advertising effectiveness. Surely better methodologies will follow. IMMI must consider its future and plan now in order to remain on top. You Make the Call

1. What is the decision facing IMMI?

2. What factors are important in understanding this decision situation?

3. What are the alternatives?

4. What decision(s) do you recommend?

5. What are some ways to implement your recommendation?