Commentary

New Year, Same IAB (Interactive Advertising Bull)

It’s a new year, and the Interactive Advertising Bureau  is churning out the same old BS: “Digital Ad Market Soars 20% in Q3, Approaches $18 Billion”

Same old disconnected from reality quotes, too: “The momentum of advertising in mobile, digital video, and other innovative formats is undeniable,” said David Doty, EVP and CMO, IAB, in a prepared statement. “These record setting third quarter revenue figures reflect marketers’ trust in the Internet’s power to connect with today’s audiences."

Here is a quote for you, David.  It’s from my father-in-law, a 77-year-old immigrant from Hungary blessed with both brilliance and a constant thirst for knowledge.  

Sitting quietly at his kitchen table in Cincinnati during our holiday visit, he was surfing the Web as he often does to quench his thirst, when a video ad started blaring out of his speakers.  He looked up at me and said in his unmistakable Hungarian accent, “Why da heck does it do that and the other nonsense too, when I am trying to read?”

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His question was in earnest.  He really wanted to understand how displaying these types of ads that so obviously annoy site visitors, was actually a strategy. 

I didn’t offer up much in the way of an explanation. Instead, I downloaded Adblock Plus onto his computer.   

He looked at me, smiled and said, “Really, no more of doze ads -- no kidding?”

Is that the connection you are referring to, David, when you point out Internet advertising’s “power to connect with today’s audiences”?

As for this reported soaring $18 billion Q3 number, the wind beneath its wings is search, which we know will likely account for 50% of this total (display and mobile combined) when the detailed report is released.

Nothing the IAB has ever published in the way of guidelines, best practices and standards has had anything to do with search advertising.  Search isn’t even a subject choice on the IAB Web site drop-down menus.  Nevertheless, the IAB uses search revenue to pad its industry stats like a quarterback who throws for 400 yards in a loss. 

We also know, based on previous detailed reports, the Top 10 ad sales companies will likely take 75% of this soaring $18 billion. Which means Google and Facebook, along with eight other social and/or portal-like platforms breathing in their fumes, will combine to take $13.5 billion.  

Then the 11th through 25th-ranked publishers will grab 9%, or $1.6 billion of this $18 billion.  That leaves $2.9 billion ad dollars left for 99% of the publishers in the industry the IAB is meant to serve.

FYI, IAB, magazine ad spending -- which no one would accuse of soaring -- was likely north of $4 billion in Q3.

The most troubling number however, is that this 9% figure earned by publishers ranked 11-25 is down 2% from a year ago, according to a previous IAB detailed report (Q4 ‘15), or down by 1%, as reported in Q2 ‘16.  Let’s split the difference and call it minus 1.5%.  So in the full year of 2016, it is more than likely that more than $1 billion ad dollars vanished from this group of elite premium publishers.  

Which leads me to three questions:

1. How has the IAB helped premium Web publishing?  

The association carts out programmatic as a go-to solution — but when you strip out private marketplaces, programmatic is just the shitty ad network business all over again.  

2. How has the IAB showed it cares about the audiences premium publishers must nurture to stay in business?

It hasn’t.  If it cared at all, the IAB could prevent the consumer experience everyone’s father-in-law endures from occurring, by publishing firmer standards in its re-released 2016 Digital Video In-stream Ad Format Guidelines.

The IAB could have said, “All video ads must be explicitly user-initiated — which means clicking on the play button, period, even when you land on a Web page that contains a video.”  Instead it makes zero mention of user-initiated anything, and actually states, “Linear video ads are typically in-video format that interrupt streaming video content.”  

The IAB actually uses the word “interrupt” in its best practices and guidelines.
 
And lastly, how do premium publishers justify their membership fees to an organization that doesn’t care about their problems, their audience, and just lost them $1 billion?

12 comments about "New Year, Same IAB (Interactive Advertising Bull)".
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  1. Gayle Moss from On-Mark-IT, January 5, 2017 at 2:19 p.m.

    Happy New Year Ari!  
    As always, you certainly know how to stick it to the IAB with humor.  

    It's shameful what they don't do for those who pay their salaries.  I can't believe publishers are putting up with the crap they are spewing.  

    Thanks for being the advertising watchdog even if those you are trying to help have their heads in the sand.

    All the best in 2017.
    Gayle

  2. Ari Rosenberg from Performance Pricing Holdings, LLC, January 5, 2017 at 2:32 p.m.

    Thanks Gayle.  I know this is hard to believe, but I don't look for ways to stick it to the IAB but I am just not wired to sit back and say nothing as we all watch them shove more bullshit into the industry -- its both insulting and a terrible disservice to publishers. 

    Happy New Year to you as well :)

  3. Craig Mcdaniel from Sweepstakes Today LLC, January 5, 2017 at 2:44 p.m.

    Ari, Thank you for the article.  I think the IAB matter is worse than even you describe. First, the smaller publishers do not have a seat at the IAB table to begin with. Would thiey listen to my concerns? I doubt it because I don't have the very big buck to get in their private club.

    Second, IAB does not know how to evaluate online advertising properly.  Meaning, yes FaceBook is very big. However when you break down US based specialty websites against FaceBook, I not only compete against them, I beat them in sweepstakes advertising. Is IAB interested in these kind of stats? Not that I can see.

    In short, there are parts as you suggest that are broken but no one in the advertising industry wants to fix the problems.

  4. Bob Gordon from The Auto Channel, January 5, 2017 at 2:53 p.m.

    Help... we are dying out here...our revenue continues to fall ecpm is lower than its ever been..google's animals continues to help suck us dry... and now for the newest bull shit... sites like JD Power and others are breaking what should be a one page review into as many as 20 pages....each with its plethora of adsense positions and click bait big boob babes...can you BELIEVE THAT A FORMERLY CLASSY COMPANY, has to resort to this kind of viewer unfriendly shit... say good night Gracie and will the last publisher please turn off the lights?

  5. Ed Papazian from Media Dynamics Inc, January 5, 2017 at 4:39 p.m.

    Ari, you are right on, as usual. All of the promotional hoopla about "ad spending" is little more than propaganda---though, to be fair, the IAB is not the only one that does it and it's part of the IAB's mandate, I assume, to promote the digital medium any way it can. I have looked at digital ad spending as it applies to branding---not search, DR and other kinds of campaigns---and estimate that branding ad spending in digital venues totals, possibly, $14-15 billion yearly---a far cry from the huge numbers usually cited and only now approaching the totals for radio and magazines---but way below TV. Also, one might ask what percentage of the stated digital ad revenues were paid for ads that never got to the users' screens or went to bots? Is lack of value to the advertiser considered in these projections? I wonder sometimes whether you and I are the only ones asking these questions?

  6. Ari Rosenberg from Performance Pricing Holdings, LLC, January 5, 2017 at 4:52 p.m.

    Ed, do you read the adcontrian / Bon Hoffman?  He blows us all away and a whole lot funnier.  He wrote something I just read that takes a dollar ad spend down to $3 cents (the title of the blog entry I think "My 3 Cents") -- his numbers appear irreftutable --  I like your approach and you can take your number down by 30% to be generous, and you would be accurate on the real Internet ad dollars out there for real publishers. 

    The IAB never upheld it's promise to build the branding value in Internet advertising because they realized quickly their money was in the DR / Targeting and hence ad tech at the expense of premium publishers. 

    As always, thanks for the read and the comment.

  7. Will Stewart from SportsWar LLC, January 5, 2017 at 5:03 p.m.

    Preach it, Ari.  Love reading your stuff. As a small premium publisher, I'm on the front lines, and your mantra that Internet advertisers are angering readers at the expense of publishers is dead-on. All the things we hate -- auto-play videos, takeover ads, etc. -- are driving our readers away. and premium publishing is a struggle just to survive.

  8. Ari Rosenberg from Performance Pricing Holdings, LLC, January 5, 2017 at 5:16 p.m.

    Will, I never assume anyone "reads me" so comments like yours are very appreciated so thank you for those words and for contributing greatly to the discussion.  You said it clearer than I did. 

    Randall Rothenberg and the IAB know eactly what they're doing and that doesn't make them bad, but the IAB has helped with this beat down on pure play content publishers.

    The question is; are "we knocked out" or can we pull ourselves back up?  I have no idea, but one thing is for sure, if we do the latter don't grab the rope the IAB throws out to help :)

  9. Will Stewart from SportsWar LLC replied, January 11, 2017 at 3:41 p.m.

    No problem, Ari.  I get a lot of MediaPost stuff via email, and I can usually tell from the headline if it's something from you, haha. :)

  10. Craig Mcdaniel from Sweepstakes Today LLC, January 5, 2017 at 5:37 p.m.

    Shouldn't IAB really stand for - "Idiot Advertising Bums"?  Had to have my laugh.


  11. Ari Rosenberg from Performance Pricing Holdings, LLC, January 5, 2017 at 6:51 p.m.

    Craig, leave the headline writing to us ok :) -- thanks for chiming in as always -- you bring real experiences to these boards that always make sense nd always promotes sweepstakes of course :) -- Happy New Year.

  12. Craig Mcdaniel from Sweepstakes Today LLC, January 5, 2017 at 7:13 p.m.

    Ok on the headlines. :)  I simply wish that the small and midsize publishers get treated fairly. As to Media Post and these boards, there are very few publishers who post. Mainly the post are from the agency and delivery side. The long term fear is there will be far fewer publishers in the future and will be dominated by a few big ones.

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