Four Predictions & A Diatribe

JEGI Media & Technology Conference

New York

January 17, 2013

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~500 members The IAB Is the Digital Publishing Industry’s Biggest Tent

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. 

With 36 National IABs + One Regional

South America ● Argentina 

● Brazil 

● Chile 

● Colombia 

● Peru 

● Uruguay

North America ● Canada 

● Caribbean 

● Mexico 

South East Asia● Australia 

● New Zealand

● Singapore

● Vietnam

Regional● IAB Europe

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Europe• Austria • Belgium • Bulgaria• Croatia • Denmark • Finland • France • Greece • Hungary • Ireland• Italy • Netherlands • Norway • Poland • Romania• Russia• Serbia• Slovakia • Spain • Sweden • Switzerland • Turkey • UK 

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IAB Invented the Modern Digital Ad Industry

1996: First Banner Ad Standards

1996: First  Internet 

Ad Revenue Report

1998: IAB Defines the “Impression”

2001: First Industry T’s & C’s

2004: Impression 

Measurement Standards Released 

2005: Video Ad Creative Guidelines Published

1997: IAB UK launched –

first  international 

IAB1998: IAB Convenes Europe 

Membership Meeting

2000: Mobile Privacy 

Guidelines Issued

2001: IAB Issues 

Interactive Advertising Glossary

2002: IAB Universal Ad Package Released

2005: First IAB Ad Operations 

Summit

2006: Digital Video 

Measurement Guidelines Issued

2007: Public Policy Office Opened

2007: Rich Media 

Measurement Guidelines Set 

2007: IAB Launches Training Program

2008: IAB Long Tail Alliance Formed

2008: Video Ad Serving Template Released

2002: First XMOS Study

2008: IAB Kills Browser‐Based Ad Blocking

2005: IAB MIXX Awards Celebrate Digital 

Creativity 

2006: Mobile 

Committee Formed

2009: IAB Publishes Mobile Buyers Guide

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Digital Is Now U.S.’s Second Largest Ad Medium

$0.7

$1.0

$6.5

$15.2

$18.0

$20.7

$30.0

$31.7

$38.5

Cinema

Video Games

Out of Home

Radio

Magazines ***

Newspaper

Cable Television **

Internet

Broadcast Television *

US Advertising Market by Media Revenue – 2011 (In billions)

Source: IAB 2011 Full Year and Q4 2011 Digital Advertising Revenue Report

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Brand Spend Is Catching Up With Consumer Activity

Four Predictions

1.Advertising standards will 

grow the marketplace. “Native ad units” will not.

Ad Units Talking Points

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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.

Creative Canvasses & Palettes for Every Goal

Billboard, Filmstrip, Portrait, Pushdown, Sidekick, and Slider

IAB Rising Stars

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The IAB Portrait by AKQAIAB Rising Stars

Video

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IAB Rising Stars Significantly Outperform Existing Banner Ads

+246%! +49%!

IAB Rising Stars

Heavy Marketer Adoption

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IAB Rising Stars

2.Digital audience measurement will finally make sense – this 

year.

Measurement Talking Points

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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.

Making Measurement Make Sense IAB leadership update

May 2011FOR INTERNAL USE ONLY – DO NOT DISTRIBUTE

3 Year, $6 Million Cross-Industry Initiative3MS

• Shift from a “served” to a “viewable” impression standard

• Introduce an online Gross Ratings Point (GRP) metric, providing reach and frequency reporting of viewable impressions

• Implement classification system and taxonomy for banner, rich media and streaming video ads

• Define standard and transparentmetrics for view‐through reporting and cumulative social activity

• Establish standards and vendor accreditation to improve methodology for online brand attitudinal studies

Five Measurement Principles

Brand attitudinal measures

Standard classification of ad units

Define impression

Establish audience currency

Brand ad performance metrics

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3

1

2

4

FACILITATE

 CRO

SS‐PLATFORM

 COMPA

RISO

N

www.measurementnow.net

3MS

Get Ready For the Brands!

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3MS

Source: Wells Fargo Securities Equity Research: “Viewable Impressions: Online Display is Growing Up. Sept. 5, 2012

Viewable Quotes (for Reading)

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“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 measurement-focused 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.”

3MS

Source: Wells Fargo Securities Equity Research: “Viewable Impressions: Online Display is Growing Up. Sept. 5, 2012

Measurement Standards Timeline3MS

3.The Wild West of Mobile WillBe Tamed (But It Will Take 

Three Years).

Mobile Talking Points

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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

Mobility Is the New Gold Rush

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Mobile

The Digital Industry’s Newest Meme

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Mobile

The IAB Mobile Agenda

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Mobile

• Mobile Video Ad Metrics Definitions and Taxonomy

• Mobile Video Device/OS capabilities chart

• Video Rising Stars

Grow Mobile Video

• Complete HTML5 Best Practices• Case studies/learning from Responsive Design• MRAID adoption and use• Mobile Rising Stars adoption

Build Richer Mobile Ads

• 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

Improve Insights & Data Utility

Consumer Trust In Mobile Is Paramount

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DIGITAL ADVERTISING ALLIANCE

Mobile

4.Digital Video Will Be an 

Explosive Ad Market (Maybe Sooner Than Mobile). 

Video Talking Points

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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 18-24 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

Majority of TVs Soon Will Be Connected

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Digital Video

Marketers Require Curated Content…

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Digital Video

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…And Distribution ScaleIf DV advertising were the shipping industry…

… IAB Video Suite creates conditions to allow the cargo to arrive on plan

Protocol Function Benefits for the Advertiser

VAST • Universal XML schema for serving ads to digital video players

• 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

VPAID • Common interface between video players and ad units

• Enables a rich interactive in‐stream ad experience

• Allows a single “executable ad” 

• Reduces supply‐chain friction through ease of creativeacceptance 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 doesnot 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

Digital Video

A Diatribe

Diatribe Talking Points

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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

Thank You!Thank You!

Randall@iab.net