Digital Advertising

& the Case forGlobal Standards

Randall RothenbergPresident & Chief Executive Officer

IABDigital Winners Conference

Oslo, NorwayOctober 21, 2014

Norway in the World

2

Norway: Extraordinary Per Capita Digital Ad Spend…

3

Note: *Source: eMarketer 2013

ONLINE AD SPEND PER CAPITA (EURO)

Norway USA* UK Germany France Italy0

20

40

60

80

100

120

140

160141

135

115

57 55

28

Source: Adex Benchmark 2013 European Online

… In a Slowing Scandinavian Digital Ad Market

4

SCANDINAVIAN INTERNET ADVERTISING: OVERVIEW

2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1.6 1.6

2.12.3

2.63.0

3.33.6

3.94.1

Total

Video

Mobile

Search

Classified

CAGR: 12.9%

CAGR: 9.5%

CAGR: [2012-2017E]

50.0%

19.4%

9.2%

6.6%

8.4%

Source: PWC Global Media Outlook 2013-2017

5

U.S. Digital Advertising Has Grown ~5x the Rate of GDP

IAB/PwC Internet Ad Revenue Report, 2004-2013*Source for GDP growth: U.S. Bureau of Economic Analysis, “Table 1.1.5. Gross Domestic Product,” (accessed March 31, 2013)

10-year compound annual growth rate for Internet advertising = 18%. U.S. GDP for same period = 4%.

To Seize Growth, You Must Embrace Global Standards

6

The Mobile Moment

7

Global Mobile Ad Revenue Nearly Doubled in 2013

2012 20130

5,000

10,000

15,000

20,000

25,000

10,072

19,341

Global mobile ad revenue ($m)*

+92.0%

SOURCE: “GLOBAL MOBILE ADEX – THE STATE OF MOBILE ADVERTISING AROUND THE WORLD”

Norway’s Mobile Ad Growth Is Powerful…

9

Note: The figures reflect net invoiced media salesSource: Media Agency Association Media Barometer

-40%

-20%

0%

20%

40%

60%

80%

100%

-15% -15%-20%

2% 3%

30%

16%

86%95%

39%

2%

Jan to Sept (2014)

MONTHLY ADVERTISING STATISTICS

10

…But Lags U.S. Growth Advertising formats - 2013 results and growth rates

Search Classifieds & Directories

Lead Gen-eration

Mobile Digital Video Commercials

Ad Banners / Display Ads

Sponsorship Rich Media $-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

$18,365.0

$2,597.0$1,749.0

$7,084.0

$2,784.0

$7,943.0

$766.0 $1,328.0

8.6% 6.9% 3.6%

110.2%

19.5%

2.9%

-9.3%

19.3%

2013 Revenue 2013 vs. 2012 % Growth

In b

illi

on

s

Source: IAB/PwC Internet Advertising Revenue Report, 2013

11

Top Mobile Challenges: Fragmentation, Privacy, Metrics

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

7 8 7 9

26 26 2534

44 43 5542

23 2213 15

High importance

Important

Fairly important

Low importance

Device/OSFragmentation

Lack of Standard Metrics

Lack of Agency

Expertise

PrivacyIssues

What do you see as the key challenges for mobile advertising from a brand/buyer perspective?

Source: Marketer Perceptions of Mobile Advertising—2013, IAB Study conducted by Ovum, for release Sept. 2013, n=301

Video Rising

12

Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

38,673,322

52,374,583Total Content Videos Viewed (000)

11,322,657

35,235,361

Total Video Ads Streamed (000)

181,717

188,249

Online Video Advertising:Propulsive Growth

% YoY Change

12/12-12/13

+211%

+4%

+35%

Total Video Viewers/Unique Streamers (000)

• Consumers viewed nearly three times more video ads than a year ago

Source: IAB Digital Usage Trend Report 2013: The Year in Review, Feb. 2014 (ComScore VideoMetrix Dec. ‘12 –Dec.’13, Computer only.)

14

Yet Most Online VideoMoney Is Still on the Table

• More consumers are streaming more videos for longer, creating more inventory. • While digital video revenue has grown, it lags growth in consumer usage.

Source: IAB May 2014, *IAB Trend Report, 2013: The Year in Review, Feb. 2014 (ComScore VideoMetrix Dec. 2013), **IAB/PWC 2013 Full Year and Q4 Internet Ad Revenue Report, Apr. 2014

4% 35%

211%

19%

Video Usage Growth vs. Video Ad Revenue Growth

PotentialFor

Growth

15

Buyers Say Metrics Will Drive Digital Video Growth

Source: An Inside Look at Demand Side Perceptions of Digital Video Advertising, prepared for IAB by Advertiser Perceptions, 2013

Programmatic Potential

16

Panelists: Has your organization pursued

an auction based approach to media

buying/selling? Are you likely to do so within

two years?

85%

72%

Ad

vert

iser

s

Pu

blis

her

s

Today

91%

83%

Ad

vert

iser

s

Pu

blis

her

s

In Two Years

Auctions Have Been Widely Adopted

17 www.iab.net/programmaticSource: IAB/Winterberry Group Study “Programmatic Everywhere” Nov 13

18

Programmatic Transactions = 20% of U.S. Display Market

Programmatic Everywhere? IAB White Paper 11/13

• 85% of advertisers buy programmatically• 91% plan to over the next two years

The Programmatic Tsunami Has Yet to Hit Norway

19

Norway* Europe US UK0%

20%

40%

60%

80%

100%

120%

8.00%18.5%

29.00%36%

92.00%82%

71.00%64%

Programmatic Non-Programmatic

Source: Tomorrow’s programmatic landscape & how publishers can claim control 2014*The State of Programmatic in Norway 2014

20

Despite Growth, Uncertainties Remain

Confusion over terminology OpacityComplexity of tech stackChannel conflictLack of clear technical standards &

guidelinesLack of liquidity

As the World Turns

21

22

The Case for Global Standards

IP is the world’s only global mediumGlobal marketers are demanding global

distribution infrastructureInternational demand for “metrics that

matter” More media & tech companies are

going cross-border

IAB PowerPoint | PowerPoint Tips | Best Practices

23

IAB Standards Built theDigital Ad Industry

IAB UK launched first international

IAB

First XMOS Study

IAB Universal Ad Package Updated

IAB MIXX Awards Celebrate Digital

Creativity

Video Ad Creative

Guidelines Published

Digital Video Measurement

Guidelines Released

First Industry Ts and Cs

IAB Long Tail Alliance Formed

Video Ad Serving

Template Released

First Internet Ad Revenue

Report

First Universal Ad Standard

Portfolio Released

IAB Defines the “Impression”

First IAB Privacy

Guidelines Issued

Impression Measurement

Standards Released

IAB Launches Training Program

Public Policy Office Opened

IAB Publishes Mobile Buyers

Guide

Privacy Matters, first Ever Consumer

Privacy Campaign Released

Ad Ops Council releases

QAG

Creation of MMCOE (Mobile Marketing Center

of Excellence

MRAID, or “Mobile

Rich Media Ad Interface Definitions” is released

3MS initiative launch

First Digital Media Sales Certificant

Creation of Ad

Technology Council

Quarterly Revenue Growth Trends, in Billions 1996–2012

1996 1997 1998 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

IAB Rising Stars launch

IAB Oversees Digital

Content NewFronts

SafeFrame Release

24

2008 2009 2010 2011 2012 2013

$0.7

$1.0

$1.4

$1.8

$2.3

$2.8

IAB Standards Synch With 3x Online Video Growth

Source: IAB/PwC Internet Advertising Revenue Reports, Full Year 2008 - 2013

US Digital Video Ad Revenue ($ Billions)Full Year and % YoY Growth

39%FY

Growth

19%YoY

Growth

40%FY

Growth

27%FY

Growth

29%FY

Growth

• Video ad revenue continues its double-digit annual growth

Video Ad Creative

Guidelines Published

Digital Video Measurement

Guidelines Released

VAST 1.0(Video Ad Serving

Template) Released

VPAID 1.0(Video Player Ad In Stream

Serving) Released

VSUITE(VAST 3.0, VPAID 2.0, VMAP 1.0) Released

Video Rising Stars

Ads Released

Digital Video In-Stream Metric

Definitions Updated

25

IAB Standards Align With Triple-Digit Mobile Ad Growth

2010 2011 2012 2013

$0.6

$7.1

Mobile Ad Revenue ($ Billions)

Source: IAB Internet Advertising Revenue Reports, Full and Half Year 2010-2013

US Mobile Ad Revenue ($ Billions)and year over year growth

25

150%FY

Growth

111%FY

Growth

110%FY

Growth

$1.0

$2.2

IAB Digital Usage Trend Report 2013: The Year in Review

MRAID 1.0 (Mobile Rich

Media Ad Interface

Definitions) released

IAB Publishes Mobile Buyers Guide

MRAID 2.0 (Mobile Rich

Media Ad Interface

Definitions) released

HTML 5 Guidelines for Digital

Advertising released

Mobile Creative

Guidelinesreleased

26

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 20140

500

1000

1500

2000

2500

3000

3500

101

275423

592

958

1429

1824

2257

2689

Certifications

Total New Certificants Cumulative

74%…on my

company's sales team

IAB Seller Certification Grows Industry Knowledge

Source: IAB internal data26

262%YoY

Growth in New

Certificants

Positive Impact of Sales Certification 81%…on my

confidence about digital advertising61%

say sales certification has had a positive

impact on mycareer growth

66%…on the

digital advertising industry as a whole

156%YoY

Growth in New

Certificants

IAB Standards27

IAB Standards Improve Business

“We expect the IAB Video Suite to benefit the entire online video ecosystem, providing

better experiences for users while incentivizing creative agencies to develop

more engaging ads.”

Payam Shodjai Product Manager, Google/YouTube

“Now, with these new specs in place, I think we will increasingly see advertisers using them to create innovative new ad experiences for consumers, and distribute and measure them

across partners and devices.”

Teg Grenager, Founder and VP Product, Adap.tv

“Although the breakneck pace of mobile evolution continues, these guidelines are a foundation for

creative and media companies to build on, even as devices and

software continue to transform.”

Michael Becker, Managing Director, MMA

“As marketers we are all going to be more efficient in maximizing our production resources by having more structure around rich digital

advertising units”

Christi Gettinger, Senior Director Brand Management, Westin Hotels & Resorts

“DAAST is a major breakthrough for digital audio advertising that is a crucial first step toward

creating a truly universal standard that covers audio, video, and all other digital advertising,”

Chris Doe VP Emerging Media Products, Vindico

Only IAB Can Globalize Standards

28

Europe EuropeRegional

Africa AsiaPacific

South America

North America

• IAB Austria • IAB Belgium • IAB

Bulgaria• IAB Croatia

(INAMA)• IAB

Denmark (FDIM)

• IAB Finland

• IAB France • IAB

Germany (BVDW)

• IAB Greece • IAB

Hungary • IAB Ireland• IAB Italy

• IAB Macedonia

• IAB Netherlands

• Norway (INMA)

• IAB Poland • IAB Romania• IAB Russia

• IAB Serbia• IAB Slovakia • IAB Spain • IAB Sweden• IAB

Switzerland • IAB Turkey • IAB UK

• IAB Europe

• IAB South Africa

• IAB Australia

• IAB China (IIACC)

• IAB New Zealand

• IAB Singapore

• IAB Vietnam

• IAB Argentina

• IAB Brazil • IAB Chile • IAB

Colombia • IAB

Ecuador• IAB Peru • IAB

Uruguay

• IAB (United States)

• IAB Puerto Rico

• IAB Canada • IAB Mexico

25 1 1 5 7 4

29

2014

IAB’s Five Enduring Priorities

Industry Change Management

Training & Development

Marketing & Thought Leadership

Consumer & Market Research

Public Policy & Lobbying

International Relations

Mobile

Advertising & Data Technology

The Trustworthy

Digital Marketing

Supply Chain

Making MeasurementMake Sense

Publisher Transform-

ation

Moving Mobile

Mainstream

Building Brands Digitally

IAB 2014

30

IAB Tech LabGlobal tech standards bodyOperationalize IAB standards through

open source code library Technical certification programsIndustry test bedIndustry knowledge base

Thank You!Thank You!

Randall@iab.net