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