Four Predictions & A Diatribe. JEGI Media & Technology Conference New York January 17, 2013
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1 Four Predictions & A Diatribe JEGI Media & Technology Conference New York January 17, 2013
2 ~500 members The IAB Is the Digital Publishing Industry s Biggest Tent 1
3 IAB Is a Global Organization International IABs National IAB organizations are found across the world. We encourage publishers, marketers, agencies and all others in the marketing media ecosystem to visit their Web sites, learn about their agendas, and take advantage of IAB membership. National IABs are independently organized and operated on behalf of their member companies. National IABs are not owned, operated or controlled by the Interactive Advertising Bureau Inc. All trademarks and names are used under license.
4 With 36 National IABs + One Regional Europe Austria Belgium Bulgaria Croatia Denmark Finland France Greece Hungary Ireland Italy Netherlands Norway Poland Romania Russia Serbia Slovakia Spain Sweden Switzerland Turkey UK South America Argentina Brazil Chile Colombia Peru Uruguay North America Canada Caribbean Mexico South East Asia Regional Australia New Zealand Singapore Vietnam IAB Europe 3
5 4 IAB Invented the Modern Digital Ad Industry 1996: First 1996: First 2005: IAB MIXX Internet 2008: IAB 1997: IAB UK 2005: Video 1998: IAB Banner Ad Awards Ad Long Tail launched Ad Creative Defines the Standards Celebrate Revenue Alliance first Guidelines Impression Digital Report Formedinternational Published Creativity IAB 1998: IAB 2000: 2008: IAB Kills Convenes Mobile 2007: 2009: IAB Browser 2001: IAB 2005: Europe First IAB Privacy Public 2006: Digital 2001: First Publishes Based Ad Issues Ad Membership Operations Guidelines Policy Video Industry Mobile Blocking Interactive Summit Meeting Issued Office Measurement T s & C s Buyers Advertising Opened Guidelines Guide Glossary Issued 2007: IAB 2006: 2007: Rich 2008: Video 2002: First Launches Mobile Media Ad Serving 2004: XMOS 2002: IAB Training Committee Measurement Template Impression Study Universal Ad Program Formed Guidelines Released Measurement Package Set Standards Released Released
6 Digital Is Now U.S. s Second Largest Ad Medium US Advertising Market by Media Revenue 2011 (In billions) Broadcast Television * $38.5 Internet Cable Television ** $31.7 $30.0 Newspaper Magazines *** Radio $15.2 $18.0 $20.7 Out of Home $6.5 Video Games Cinema $1.0 $0.7 5 Source: IAB 2011 Full Year and Q Digital Advertising Revenue Report
7 6 Brand Spend Is Catching Up With Consumer Activity
8 Four Predictions
9 1. Advertising standards will grow the marketplace. Native ad units will not.
10 Ad Units Talking Points Advertising requires scale to be economically efficient as well as successful; scale requires standardization. Native ad formats are customized the antithesis of standardization. Customized advertising has always had a role in advertising, albeit a minor one, because customization inherently adds costs up and down the supply chain. Custom will be an important part of most publishers portfolio of products and services Despite its faddishness, the native ad unit craze is destined to fade because it cannot scale it cannot drive reach and frequency across sites and media channels and this will be a highly expensive part of any advertising program. 9
11 IAB Rising Stars Creative Canvasses & Palettes for Every Goal Billboard, Filmstrip, Portrait, Pushdown, Sidekick, and Slider
12 IAB Rising Stars The IAB Portrait by AKQA Video 11
13 IAB Rising Stars IAB Rising Stars Significantly Outperform Existing Banner Ads +246%! +49%! 12
14 IAB Rising Stars Heavy Marketer Adoption 13
15 2. Digital audience measurement will finally make sense this year.
16 Measurement Talking Points Industry founders unthinkingly designed us to be a direct response medium. Wasn t just click-based metrics that resulted from that: So did inattention to ad viewability. Viewability is central to marketers ability to achieve reach and frequency with their campaigns, and thus central to the ability to have efficient impact, and to plan and buy across media channels. 15
17 3MS 3 Year, $6 Million Cross-Industry Initiative Making Measurement Make Sense IAB leadership update FOR INTERNAL USE ONLY DO NOT DISTRIBUTE May 2011
18 3MS Five Measurement Principles 1 Define impression Shift from a served to a viewable impression standard 2 Establish audience currency Introduce an online Gross Ratings Point (GRP) metric, providing reach and frequency reporting of viewable impressions FACILITATE CROSS PLATFORM COMPARISON 3Standard classification of ad units 4 Brand ad performance metrics 5 Brand attitudinal measures Implement classification system and taxonomy for banner, rich media and streaming video ads Define standard and transparent metrics for view through reporting and cumulative social activity Establish standards and vendor accreditation to improve methodology for online brand attitudinal studies
19 3MS Get Ready For the Brands! 18 Source: Wells Fargo Securities Equity Research: Viewable Impressions: Online Display is Growing Up. Sept. 5, 2012
20 3MS Viewable Quotes (for Reading) Advertisers have struggled to understand the true value of display advertising. The root of the issue is a fundamentally flawed impression measurement standard. Further, we believe the lack of a standardized gross rating point definition has prevented reliable cross-media comparability, presenting a significant barrier to increased spending by measurementfocused marketers. Evolving ad tech has also led to increased levels of questionable and obfuscatory marketplace behaviors. Consequently, we believe the continued growth of online display is dependent upon the adoption of standards that can improve data transparency and analytics. This effort could significantly increase the confidence that marketers place in online display and accelerate the migration of media spending toward online display channels. 19 Source: Wells Fargo Securities Equity Research: Viewable Impressions: Online Display is Growing Up. Sept. 5, 2012
21 3MS Measurement Standards Timeline
22 3. The Wild West of Mobile Will Be Tamed (But It Will Take Three Years).
23 Mobile Talking Points The problem of analog dollars to digital dimes to mobile pennies makes no sense there is no excess inventory dragging down advertising rates (yet). There are structural problems with distribution that are hindering investment. Cookie-less environment Complex ecosystem dominated by large, bureaucratic, regulated institutions unhospitable to marketers No definition of mobility. No standards it s like online in 1995 IAB standards are a solution 22
24 Mobile Mobility Is the New Gold Rush 23
25 Mobile The Digital Industry s Newest Meme 24
26 Mobile The IAB Mobile Agenda Build Richer Mobile Ads Complete HTML5 Best Practices Case studies/learning from Responsive Design MRAID adoption and use Mobile Rising Stars adoption Grow Mobile Video Mobile Video Ad Metrics Definitions and Taxonomy Mobile Video Device/OS capabilities chart Video Rising Stars Improve Insights & Data Utility Future of the Cookie/Identifiers The State of Mobile DSPs and RTB, OpenRTB for mobile: a platform status report Guidelines for geotargeting Perspective on State of Cross Media Audience Measurement Launch Mobile Self Regulatory Program/Code of Conduct 25
27 Mobile Consumer Trust In Mobile Is Paramount DIGITAL ADVERTISING ALLIANCE 26
28 4. Digital Video Will Be an Explosive Ad Market (Maybe Sooner Than Mobile).
29 Video Talking Points Marketers understand it. They like it. They have the assets. They know how audiences react. They have the advertising assets 66 million homes will have IPTV in months This is no longer a technology issue, it s a rights issue Basic cable next for disruption Closed system risk: Samsung, LG, Sony determining they are ad platforms inhibits scale 28
30 Digital Video Majority of TVs Soon Will Be Connected 29
31 Digital Video Marketers Require Curated Content 30
32 Digital Video And Distribution Scale If DV advertising were the shipping industry Protocol Function Benefits for the Advertiser VAST Universal XML schema for serving ads to digital video players VPAID Common interface between video players and ad units Enables a rich interactive instream ad experience Allows a single executable ad Enables critical functionality to open the in stream digital video advertising marketplace Allows greater reporting capabilities as per publishing platform tools Eliminates guess work behind format compatibility Reduces supply chain friction through ease of creative acceptance from any agency or network ad server Provides common specifications for advertisers to develop against, thereby decreasing the cost of creative production and increasing ROI Improves video ad supply liquidity; decreases cost of integration with each publisher. VMAP Template that content owners can use to describe the structure for ad inventory delivery when first party does not control the video player or the content distribution outlet Allows content owner to control podding, ad breaks, and cadence Enables a cleaner ad experience for viewers Provides mechanism to honor ad control rights IAB Video Suite creates conditions to allow the cargo to arrive on plan 31
33 A Diatribe
34 Diatribe Talking Points Complexity is the enemy; standards are the solution All the innovation we see is not increasing margins for brand marketers or their partners in the value chain. Rather, margins appear actually to be declining, as marketing complexity increases. The complexity cost is being financed through lower CPMs. Lower CPMs means less investment in content, and less success in sustainably engaging audiences. Audience is the new commodity; audience engagement is the holy grail 33
35 Thank You!
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