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La Próxima Revolución
DigitalRandall Rothenberg
President & CEO, IAB !
IAB Colombia Annual Congress Bogota, Colombia
April 2, 2014
About the IAB
2
‹Nº›
Commerce
Social
Video
Search
Display
Data
MobileAudio
IAB: Digital Advertising’s Largest & Most Active Trade Body
The Industry’s Biggest Tent
4
600+ leading media companies responsible for selling 86% of US online advertising.
Global + Local: 43 National IABs
5
Europe Europe Regional
Africa Asia Pacific
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
‹Nº›
Our Mission is Growth
Removing FrictionPromoting Digital Making It Safe
IAB Invented the Modern Digital Ad Industry
7
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 ReleasedFirst 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
‹Nº›
Digital’s Thought Leadership Center
Members Are LeadersIAB Committees and Councils are comprised of some of the brightest minds in their space, and help drive the industry forward by developing standards, guidelines, best practices, whitepapers, buyer’s guides, and other services
• Audio Committee • B2B Committee • Digital Video Committee • Games Committee • Interactive Television Committee • Local Committee • Mobile Advertising Committee • Networks and Exchanges Committee • Performance Committee • Social Media Committee • Tablet Committee
Committees• Ad Ops Council • Ad Technology Council • CFO Council • Data Council • Legal Affairs Council • Multicultural Council • Public Policy Council • Research Council • Sales Executive Council
Councils
9
The Digital Moment
10
Colombia: Enormous Digital Growth Potential
11 Sources: IAB Colombia Study, IAB Colombia, November 2013; Futoro Digital Colombia, Comscore, Aug 2013; Fuente: EGM 2 Ola 2013; Flurry Analytics, Jan 2012-Jan 2013, countries with at least 500,00 active devices Jan 2012
• 25mm total unique internet users • 70% of the population connected to
the internet in past three months • 43% Colombian users are 15-24
years old vs. LatAm average 32% • 89% connected to the internet at
home • 68% recall seeing online advertising
and can name various formats • Colombians lag Latin America in
online time spent (17.2 hours average vs. 24.6 hours average)
Colombia: A Growing Mobile Powerhouse
12
• Fourth largest mobile market in LatAm: 24mm unique subs
• Will move into “fast grower” mobile broadband segment by late 2015
• Highest 3G coverage in LatAm – 96%
• The fastest growing global smartphone market: devices grew 278% in 2013
• 91% of mobile users access internet via their phones
Sources: IAB Colombia Study, IAB Colombia, November 2013; Futoro Digital Colombia, Comscore, Aug 2013; Fuente: EGM 2 Ola 2013; GSMA, Mobile Economy Latin America 2013
Digital Is Now the U.S.’s Second Largest Ad Medium
13
Broadcast Television *
Internet
Cable Television **
Magazines ***
Newspaper
Radio
Out of Home
Video Games
Cinema $700.0
$800.0
$7,500.0
$16,100.0
$19,400.0
$22,800.0
$32,500.0
$36,600.0
$39,600.0
Advertising spend† of key media in 2012 (in Billions)
† The total U.S. advertising market includes other segments not charted here.
* Broadcast Television includes Network, Syndicated and Spot television advertising revenue.
** Cable Television includes National Cable Networks and Local Cable television advertising revenue.
*** Magazine includes Consumer and Trade magazines.
Source: IAB Internet Advertising Revenue Report 2012, produced by PWC
‹Nº›MMA & IAB Overview
Digital Advertising: Growing 13x Faster Than U.S. Economy
14
CAGR*: 19.7%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$36,570.0
$31,735.0
$26,041.0
$22,661.0$23,448.0
$21,206.0
$16,879.0
$12,542.0
$9,626.0
$7,267.0
• Digital advertising grew 15.2% in 2012
• 2012 annual revenues increased on a year-over-year percentage and dollar basis.
• The 19.7% CAGR* has far outpaced U.S. real GDP growth of 1.5%** over the same 10-year period.
Source: IAB Internet Advertising Revenue Report 2012, produced by PWC
‹Nº›MMA & IAB Overview
Internet Ad Growth Outpaced All Media Over Past 8 Years
15
$0
$12,500
$25,000
$37,500
$50,000
2005 2006 2007 2008 2009 2010 2011 2012
Broadcast Television * Internet Cable Television **Newspaper Radio
Advertising revenue market share by media, 2005-2012 ($ billions)
• Two forms of media have positive compound annual growth rates (CAGR) between 2005 through 2011: Cable Television at 4.6% and Internet at 16.5%.
• In every year since 2005, the annual growth rates of Internet advertising have exceeded those of other advertising media.
• Internet advertising has experienced double-digit annual growth in every year except 2009; no other media has experienced double-digit growth in any year.
*Broadcast Television includes Network, Syndicated and Spot television advertising revenue. **Cable Television includes National Cable Networks and Local Cable television advertising revenue.
Source: IAB Internet Advertising Revenue Report 2012, produced by PWC
16
Mobile: + 111%
-40%
0%
40%
80%
120%
$ - 0
$ 4,500
$ 9,000
$ 13,500
$ 18,000
Search Lead Generation Mobile Ad Banners / Display Ads Rich Media
2012 Revenue2012 vs. 2011 % Growth
-15%-25%
13%
29%
111%
-27%
11%
-6%
15%
$1,113.0$845.0
$7,721.0
$2,330.0$3,370.0
$156.0$1,689.0$2,430.0
$16,916.0
15%
-6%
11%
-27%
111%
29%
13%
-25%-15%
IAB 2014
Industry Challenges
17
IAB 201418
Fraudulent Traffic Has Reached Crisis Proportions
• At least 22% of digital display advertising traffic worldwide is driven by bots*
• Estimated $6-10 billion is lost to advertising fraud alone each year.* • Bot Traffic on pace to waste $9.5 Billion in 2013 on advertising***
*Source: Adometry, October 20, 2010, Internet Retailer, January 26, 20133 **Source: InfoSecurity, February 15, 2012
***Solve Media’s quarterly Bot Traffic Market Advisory update, Q2 2013 (based on 230M human verifications across 6500 publishers)
13% of US homes and up to
9% of workplaces are
infected with bots**
IAB 2014
Consistent methodology across media
Real-time measures for optimization
Ability to understand competitive landscape
Integration with proprietary platforms/process
Ability to use as currency for buying/selling
Availability in key international markets 23
47
59
69
69
73
10
20
21
28
37
32Very critical Extremely critical Total
13%
41%
32%
Total
20%
49.3%20162013
19
Source: 2013 ANA/Nielsen Integrated Multi-Screen Survey
Multi-Screen Buys Expected to Grow
What is the single biggest issue
regarding multi-screen advertising that keeps
you up at night? Measurement!
41%
38%
27%
13%
Base: Total = 212; Client-Side=86; Agencies=55; Media Sellers=67
How critical is each of these to you for integrated multi-screen measurement?
13%
Brands Require – But Media Lack – a Common Currency
IAB 2014
0%
18%
35%
53%
70%
2005 2006 2007 2008 2009 2010 2011 2012 1H 2013
13%
5% 4% 4% 4% 5% 4% 2% 2%
41%47%
51%57% 59%
62%65% 66% 65%
46% 48% 45%39% 37%
33% 31% 32% 33%
CPM Performance Hybrid
20
Persistent Pressure on Publisher Revenues
Source: 1st Half 2013 IAB/PWC Digital Ad Revenue Report!*Source: AOL / Ad Exchanger 2013!CPM Data Courtesy of SQAD
CPM Buys Declining
41%
13%
Programmatic Solutions Further Reduce Ad Revenue*
13%
95
97
100
102
104
January April July October
97.655196.844196.749
95.69895.444595.4083
96.498596.429196.562797.158797.136
96.220196.211196.294896.470696.568796.553696.5883Composite 2010 Composite 2011Composite 2012 Composite 2013
CPMs Flat to Declining
IAB 201421
Digital Still Not Considered a Brand-Building Medium
Retail
Financial Services
Telecom
Auto
Computing Products
Leisure Travel
Consumer Packaged Goods
Pharma & Healthcare
Media
Entertainment 4%
5%
6%
7%
9%
8%
12%
11%
13%
20%
4%
5%
5%
6%
8%
9%
11%
12%
13%
22%
20112012
Internet ad revenues by major industry category*, 2011 vs. 2012
• Retail advertisers, despite an overall decline, continue to represent the largest category of internet ad spending, accounting for 20% of revenues in 2012, down from the 22% reported in FY 2011.
• Automotive advertisers accounted for 12% of revenues in 2012, up from the 11% reported in FY 2011.
• Consumer Packaged Goods represented 7% in 2012, up from the 6% reported in FY 2011.
• Pharma/Healthcare accounted for 6% of revenue in 2012, up from the 5% reported in FY 2011.
Source: IAB Internet Advertising Revenue Report 2012, produced by PWC
IAB 201422
Mobile Monetization Is a Disaster
Finding Solutions
23
IAB 2014
Core Commitment #1
24
Building a Trustworthy
Digital Advertising Supply Chain
IAB 2014
A War on Fraud & Piracy
25
Protecting Privacy Through Self-Regulation
26
Digital Advertising Alliance
IAB in Washington• Advertising self-regulation • Online behavioral • Children’s privacy • Blogger disclosure rules • IP piracy • Political advertising • Mobile apps and ads • Global self-regulatory harmonization
and data standards
IAB 2014
Core Commitment #2
27
Making Measurement
Make
Sense
Viewability: The New Currency for Online Advertising
28
Buyers and Sellers establishing new currency for digital media based on traditional media criteria
1. Assess Impact of Viewable Impression2. Establish Digital GRP
3. Create Ad Classification System4. Define Standards-Setting Structure
Traditional Media GRPs Digital Media ImpressionsBrand Metrics
(Reach and Frequency)
IAB 2014
Core Commitment #3
29
Publisher Transformation
Rationalizing Programmatic Buying…
30
!!● Confusion over
terminology ● Limited transparency ● Lots of middle men ● Sellers’ strategic
challenges (sales, bus model, yields)
● Lack of clear technical standards & guidelines
Significant growth Uncertainty in market
…Through Education & Standards
31
IAB Market Education
and Clarity
IAB Solving
Operational Issues
• Establish market clarity & education on programmatic !
• Thought-leadership research study to provide an effective roadmap to “programmatic” capabilities !
• Identifying and addressing mobile programmatic issues
• Digital automation – standardize common datasets for IOs, media plans & invoices !
• Open RTB - Supports development of OpenRTB specs !
• QA Guidelines reflect programmatic disclosures
IAB Digital Media Sales Certification
32
A client wants to serve different creative to consumers based on their exposure to the digital advertising campaign. Which of the following solutions should be recommended?!A) Connected TVB) Keyword TargetingC) Sequential MessagingD) Demographic Targeting
Sample question
33
Digital Content NewFronts
IAB 2014
Core Commitment #4
34
Building Brands Digitally
Cross Screen
Rich Media
New Standard Ad Unit Portfolio
Display Mobile
70+% New
Digital Video
35
Source: IAB Rising Stars Research with IPG MediaLab, Feb. 2012
Rising Stars vs Standard IAB Units Universal Interac4on Time*
0.00
4.00
8.00
12.00
16.00
Rising Stars Standard
7.8854
15.845
36
200% More Interaction for Rising Stars
*Universal Interaction Time is defined as the average length of a time that a user’s mouse enters frame of ad and is active (not parked) for 0.5 seconds or longer and ends when the mouse leaves the ad frame, or 60 seconds, whichever happens first.
Users Spend 2x More Time With Rising Stars Ads
37
IAB 2014
Core Commitment #5
38
Moving Mobile Mainstream
Mobile Marketing Center of Excellence
39
Creative: Mobile Rising Stars: Driving Adoption Mobile Ad Creators’ Guide Tablet Ad Sizes
Promote Multi-Screen Advertising IAB Mobile Center Agenda
Measurement:Mobile and Cross-Media Audience Measurement Town Hall Mobile Engagement Metrics Definitions
Public Policy/ Regulation:Self-Regulatory Program Lobbying DC Fly-In Event
Operations: Mobile Discrepancies Industry Round Table Future of the Cookie/Identifiers Driving MRAID Adoption
Education and EvangelizationMobile Cross-Media Ad Effectiveness Research
Mobile Video Agency Day
Mobile and Industry Verticals (fast food, financial, CPT, auto, etc.)
Local Search White Paper
40
IAB International Membership Program
• Participate in our 20 Committees and Councils!!
• Help establish critical technical standards and operating best practices!!
• Bring IAB Sales Certification training and accreditation to your markets!!
• Partner on market-making research and thought-leadership publishing!!
• Market your successes through the new, curated IAB Global Website and App!!
• Assert leadership through an enlarged IAB International Steering Committee!!
• Build your events businesses with programming and support from the IAB Events team
These Benefits Are Free for !IABs & Your
Most Involved Members
42
1. Adopt the IAB Viewability StandardFive First Steps for You
2. Adopt IAB Rising Stars ad formats
3. Protect consumers with privacy self-regulation
4. Take the IAB Digital Certification Exam
5. Join & create best practices with IAB International