This week I spoke with Peter Minnium, head of brand initiatives for the IAB. Peter’s the driving force (and the heart) behind the Rising Stars and is understandably bullish about bringing brands online. He’s also surprisingly optimistic about RTB.
While a fan of programmatic (“It allows agencies and publishers the freedom to focus on solving client problems, so I absolutely love it,” said Peter), his perspective on exchanges is a little less rosy. “They have the ability to be a game-changer and extremely beneficial to agencies, publishers and inventory representatives, IF we can bring the appropriate amount of information about that inventory on the front end, and the appropriate performance metrics on the back end to the equation,” he said. He isn’t convinced that the information exchanges are able to provide on inventory today is either adequate or accurate. “As you move up the value chain to the more high-value inventory, you need those signals on the inventory quality to justify premium pricing, but they must be accurate enough to be trusted,” he asserted.
Not surprisingly, he believes that the six Rising Star display units can deliver the necessary quality signals to buyers. He noted, “They trump other premium inventory, which doesn't have such widespread understanding and perceived value.” Therefore, if we make a market around the Rising Stars, that first issue is largely overcome because people know what they are and that they’re effective. Plus, if we focus on those units in terms of metrics, it will be easier to establish benchmarks and a body of knowledge about their effectiveness in different environments and verticals. Using Rising Stars will focus the ecosystem on a single set of ad products and overcome those potential issues.
“There’s some good logic to building a premium exchange with the Rising Stars as a foundation,” Peter said. 99.9% of what's traded on exchanges are the four units of the IAB universal ad package. The exchange market has grown so successful because they have been trading these IAB standards. According to Peter, “The premium market can be established using the parallel logic of being enabled by the IAB coming to the table and making premium ad unit standards.” Makes sense to me.
“We know that brand marketers want to move more into digital,” he said. “Over the past year, we've seen adoption by premium publishers and quality networks. But it's still not enough inventory. The natural evolution to open the floodgates of inventory could be a premium exchange, if done right. Even then it will be a while before we satiate the appetite of brand marketers for truly premium quality inventory.”
That’s right: Our biggest obstacle to bringing more brand dollars online is a shortage of premium inventory. Today, 90%-93% of all ads are legacy IAB standards -- 10-year-old ads that measure click-through.
“We want to open up a new middle class between the 90% legacy and that 10% custom we see in advertising today -- a middle class of scaled premium ad positions,” Peter said. “We are thrilled that top publishers and a few leading networks are making available premium Rising Star inventory. But to get that middle class to a size that will really impact the market and bring bigger brand dollars online, we need more inventory,” he said. A premium programmatic marketplace should help open things up and bring more inventory to the market.
Mobile will help. “The IAB Mobile Rising Stars, especially the Full Page Flex unit create a huge opportunity to bring premium mobile advertising to agencies,” he offered. To get premium advertising at scale, advertisers need to extend into the mobile space -- there’s just not enough inventory in display.
But that will change. As premium marketplaces launch and grow, brand advertisers will have the quality rich-media ad units they want and the scale they require across all screens -- without legacy banners.