Last year, the Interactive
Advertising Bureau and Bain & Co. released the findings of a shocking study showing the commoditizing effects the burgeoning marketplace of online display advertising, and new secondary sales channels
such as ad networks and exchanges were having on the value of online advertising inventory. Today, they will begin to fight back. In a meeting with nearly 100 top industry executives, including many
of the largest brand marketers, the IAB and Bain will release the findings of a new report they believe will provide a "roadmap" to rebuilding the industry's perceptions about the brand-building value
of online advertising.
The report, "Building Brands Online: An Interactive Advertising Action Plan," a preview of which was given Online Media Daily on Wednesday, is based on an in
depth survey or 700 brand marketers, as well as anecdotal research with ad agencies and publishers that has identified five key obstacles that have deterred marketers from shifting more of their brand
advertising online, and the five key areas the industry can focus on to overcome them.
The heart of the findings are that online sales organizations have lacked the "sophistication" necessary to
turn the perceptions advertisers and agencies have about the value of online advertising from an either/or proposition of "branding" vs. direct response-like "transactions" to one that is far more
holistic and deals with higher order elements of branding such as "engagement."
"It's a pretty big rethink about the way [online] sales organizations work," IAB President Randall Rothenberg
explained to OMD, adding that the end goal is what he described as a "triple play offering" that combines brand reach, transactions and "brand engagement."
Brand engagement, of course, has
been a Holy Grail of sorts for Madison Avenue for some time now, and while it still defies and explicit definition, Rothenberg said the new study identifies ways that publishers and marketers can work
together to develop effective campaigns that generate engaging results based on the combination of online's selling power, great creative, and stories that create long-lasting bonds with consumers.
The key, he said, will be transforming the perceptions and behavior of all the stakeholders in the online advertising marketplace, especially the sales organizations of big publishers that have
been conditions to pitch the brand reach power of online display advertising and the transactions-oriented focus of search and click response models.
The five key obstacles that need to be
overcome to achieve that, the report concludes, include:
1 - Ad formats and creative are not innovating with the medium.
2 - We are awash in undifferentiated, low-cost inventory.
3 -
Metrics, metrics everywhere... but not the ones that brand marketers really need.
4 - Media companies lack ideas, strategic expertise and engage too late in the planning process.
5 -
Marketers want cross-platform campaigns; instead they get a model rooted in platform-specific silos.
The report does not explicitly lay blame at anyone constituency, but paints a picture of a
highly dysfunctional marketplace that grew up spontaneously, and opportunistically in a way that has reinforced those market perceptions. Online sales organizations talk about brand value, but pitch
and convert business based on their performance. Agencies continue to operate in a highly "siloed" way with an organizational culture that keeps online advertising in a performance box. And marketers
want to focus on the brand-building aspects of online media, but are given sales pitches and plans that focus on shorter term, transactional results.
Rothenberg says there are plenty of examples
on all sides - publishers, marketers and agencies - that are breaking the norm, and that the IAB and Bain plan to use them as examples to convince others about the upside of changing their cultures
and organizations.
He points to the "integrated," cross-platform selling approach of publishers such as ESPN.com and the Newyorktimes.com, and marketers such as Fidelity and American Express
that can see the simultaneous transactional and brand value of online display advertising.
"This is the roadmap," he asserted, pointing to the final page of the report, which identifies the five
steps the industry needs to break its silos, including:
1 - Measurement: Work with other associations to establish clear standards for measurement of brand impact and reach/frequency.
2 -
Targeting: Address current scale and data limitations for targeting. Identify ways to adjust for overlapping audience in reach buys.
3 - Automated process: Help develop low-cost and/or automated
buying processes for brand reach and response buys. Establish common technical standards for the industry.
4 - Online creative: Identify and communicate success factors for marketers, agencies,
and publishers in executing cross-platform creative.
5 - Engaging marketers: Create ongoing forums with marketers for discussion of branding approach, limitations, and key developments.