What Do We Have to Do to Simplify the Business?

by David L. Smith, Nov 26, 2001, 12:00 AM

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At the iMedia Summit the week before Thanksgiving, there was a lot of optimism about the potential of the Interactive industry. And why not? The summit was comprised of folks who make their living in the online space. These were arguably the “best and the brightest” from the agency side, the site/seller side and the third party vendor side. Much of the antagonism and argument that had happened at previous summits just plain did not happen at this event. One of the panel moderators went so far as to set up a panel “Jerry Springer style” but, despite this encouragement, nobody threw any chairs up onto the podium.

There were lots of important and relevant observations, some of them were new, and some of them we have been wrestling with for a long time. But most of all, there was consensus. The agreement stemmed from some of the areas discussed in my last two articles, having to do with the incredible complication of doing business online. So what’s the answer? There is no one answer and I’m sure that this group did not tackle everything that should be on the table. But a number of answers emerged from the panels, the round tables and the individual sidebar, one-on-one discussions. (BTW - for more detailed information on what was discussed, go to iMediaconnection.com.)

If you have been involved in interactive media for any length of time, the following will not surprise you. The answers included:

- Reducing the number of creative units. What, you say? The IAB has come out with standards and many are trying to adhere to them? Well, in the name of innovation (and some of this is truly justified, because we have to have change in addition to standards), last quarter saw some 4,000 different ad units deployed according to JMM! Some at odds with standards by only a few pixels with 60% of all sites using non-standard sizes. Innovation is great, but resizing is a totally unnecessary cost that is absorbed by the clients at the expense of the media budget. Especially when the resizing is minor and a site could make a slight change to adhere to a standard. This has got to stop.

- Getting the impression definition resolved. The work done by the IAB through their PWC study will go a long way toward this resolution. The soon-to-be-released document which has been championed by George Ivie of the MRC will not please everybody but it will result in the highest standards being applied to this definition. It will be up to the industry to endorse these standards and “do the right thing.”

- Refining the “Standard Terms and Conditions” for insertion orders. Version 1.0 was a breakthrough for the industry. But it did not result in a standard. Too many agencies and sites wanted (or had to) to make their own tweaks. The next version (1.5 or 2.0??) will clean up the language, should provide liability definitions all sides can live with and most importantly, should result in acceptance of 3rd party ad serving numbers (+ or – 10%) as proof of performance. The impression definition work done by the IAB should be a part of this agreement. Agencies and sites have shown a new resolve to work together to adopt standards that all can agree to. We need to work together as an industry to make certain that this document stands and becomes the basis for doing business in the future.

- Reach and Frequency. This was identified as the single biggest need to bring the major advertisers to the table with meaningful spending. Many companies are hard at work to finally do R/F the right way for the Web. It is hoped that the work being done by the ARF is going to establish the ground rules that all can be guided by so that we end up with a single, viable standard.

- Use of GRP’s in planning. While not R/F, Tim McHale of Tribal DDB presented a compelling argument for charting GRP or TRP numbers for the Internet on the traditional media flow chart. While his argument for IRP’s (Internet rating points) is regressive and is similar to the cable rating point concept attempted by the cable industry 20 years ago, the GRP/TRP concept is sound and should be seriously considered by all.

- Branding is the future. This is hard to imagine in a world of declining CPM’s and a push towards CPA’s. But the work being done by the IAB and the OPA to launch new studies reinforcing branding efficacy should be key to acceptance of the Web as mainstream by the top advertisers just as the General Foods study did for magazines in 1969. They should also help advertisers understand to a greater degree that the Web should have spending in the 5-20% range of an ad budget, not 1-2%.

- Don’t forget e-mail. This medium has become more and more important, not only from an initial sale standpoint but for CRM. More than once, advertisers and agencies were urged to collect e-mail addresses at every opportunity in order to maintain a dialogue with their customers and those interested in their offerings.

- Site/agency relations. Lots of talk took place wherein the major sites pledged to work directly more often with the agencies. At the same time, the sites tried to explain why they went directly to clients for marketing oriented deals. It is up to the agencies to establish their credentials as marketing, not just advertising partners with their clients and give the sites a reason to work directly with agencies at all times.

- Rich media is still not mature. While it can deliver much higher results, both from a branding and a response basis, there continue to be “business issues” between major rich media vendors and major sites. The rich media vendors need to simplify their offerings, their production complexity and their business practices if they are going to become mainstream.

Of great interest to many is the involvement of the traditional offline trade organizations and private companies in the standards process. Companies like the ARF, the MRC, the AAAA’s are all making great contributions to the Web standards process as they work with Internet groups like the IAB, the OPA and the Aspen Group.

Hats off to Rick Parkhill and the iMedia Productions folks for putting on a stellar conference. In addition to the worthwhile work sessions, all agreed that the “schmooze time” allocated, permitting buyer and seller to discuss issues “offline” was one of the major positive aspects of the conference.

Now it is up to the industry to get these standards works in progress out the door and to adhere to them. Sure, we still need innovation. But give me some standards and a little more bandwidth for the consumer, and I personally believe that the industry can continue to grow in leaps and bounds.

David L. Smith is President of Mediasmith, Inc., the Integrated Solutions Media Agency based in San Francisco and New York.

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