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Today’s Burning Question: IAB Internet Advertising Revenue Report (Pt. 2)

Written on
Apr 17, 2013 
Author
Mike Daly  |

ADOTAS (Second of two parts) – Today, we’re asking our esteemed panel of thought leaders the following Burning Question: “What are your thoughts about Tuesday’s IAB announcement that digital advertising revenues climbed to a milestone high of $36.6 billion in 2012?”

Here’s how they’ve responded:

“These revenue numbers are incredible and a great achievement for our industry. The best part is there’s still tremendous upside as digital media matures and becomes a viable competitor to television for branding dollars. Because social and mobile experiences are so personal and engaging — we have the opportunity as marketers to breakthrough and make meaningful connections with consumers on a whole new level.” — Ari Brandt, MediaBrix CEO.

“Instead of patting ourselves collectively on the backs, we should be challenging the industry to figure out how we double again to $72 billion. Many of us lived through what happened in 2001 when the growth stopped and the punchbowl got ripped away. And underlying these numbers is the stark reality that display advertising, one of the two pillars of growth since the industry was born in 1995, is facing some ugly truths. Banner blindness has been eating away at display effectiveness, to the point where 2% click through rates in 1996 sunk to .1% in
2010. If we continue to ignore this issue, our industry will be much like Sisyphus, pushing the online advertising boulder up the mountain, only to see it roll down hill eventually. What’s causing banner blindness? Two things: (1) Too many ads served. According to comScore, our industry serves 1.1 trillion ads per quarter to 244 million users in the US. That’s 4500 ads per user or 50 ads per user per day ON AVERAGE. This is an astounding volume, and (2) Not enough relevance.We rely on audience targeting, in spite of the rampant amount of data error (you can buy an audience of 25 million cookies to target car intenders in any given month, even though only 10 million cars are sold per year in the US), the reality that many people we target have already purchased, and (3) the very basis of audience targeting means we are reaching people after they are doing something else — unlike Search where people’s intent is targeted in real time. Too many ads served and too little relevance. Our industry trains people 50 times per day, 365 days a year to learn where ads are served on the page and ignore them. All of this makes me wonder how we turn $36 billion into base camp rather than a summit. — Dave Zinman, CEO of Infolinks.

“Thanks to digital, consumers have unprecedented knowledge resources at their fingertips at all times and places. While advertisers can be successful with even the smallest campaigns, the best digital advertisers embrace proven and emerging digital channels to keep their brand in front of these empowered consumers anywhere, any time, on any technology, platform or device. As these omnichannel strategies continue to gain steam, we can expect more impressive growth for many years to come.” — Alan Osetek, President of Resolution Media.

“It’s no surprise that marketing dollars are finally catching up to time spent in digital environments. I expect that as publishers and advertisers begin to innovate more proactively and take advantage of opportunities for high-value ad products, especially in mobile, we’ll start to see the spend grow even faster. — Matt Minoff, CEO of Selectable Media.

“Five years ago digital had print revenue in its sights. And the evolution of consumer habits forced traditional print companies to either embrace the digital transformation or lose. In 2010, digital revenue surpassed print for the first time. Up next is traditional Television. Today, our share of time spent with connected devices highlights a trending imbalance in the media allocation between traditional television and digital. However, I am really encouraged at the pace of technical and business innovation in the digital video and mobile spaces around video—especially over the last six months. The major video providers in the U.S., Hulu, NBC, ABC, CBS, Fox, AOL, YouTube, etc. are working closely with the rest of the ecosystem, including ad tech, research, marketers, and agencies to align around processes and methodologies to allow this to scale. As these lines between traditional television and connected devices continue to blur, and innovations in creative, standards, and measurement drive a less painful execution path to converged campaigns, we’ll truly see a game changer in how media is not only bought and sold, but how we are able to enjoy across any screen it as consumers/viewers.” — Mike Caprio, VP of Video, Broadcast & Connected Devices, DG.

“The IAB’s digital advertising revenues report reflects the massive impact of digital on overall media budgets. Even while our industry navigates its way through divergent opinions on programmatic, there’s a clear opportunity to extract greater value for ad impressions within premium, hyperrelevant and brand-safe content on the exchange — boosting CPMs and corresponding revenues. Rather than letting the RTB marketplace devolve into a low-CPM arena for incessant, cookie-based retargeting, we should focus on the types of quality impressions that warrant higher CPMs and – when combined with the efficiencies of the exchange – offer a chance to boost display growth into the double digits.” — John Mracek, CEO of NetSeer.

“The IAB’s announcement that digital advertising revenues climbed to a milestone high came as no surprise. Digital advertising has evolved significantly, and has earned its place in the marketing mix as technology and services allow marketers and brands yield better results and prove the value of the online channel. Because there is no shortage of innovation in the online advertising ecosystem, we’ll continue to see positive ROI and continued growth in digital advertising.” – David Hahn, SVP of Product Management for Integral Ad Science.

“This week’s IAB’s finding that digital advertising revenue is rapidly increasing is unsurprising given that traditional media is fast moving to digital platforms. Digital allows for greater customisation and engagement than traditional advertising platforms, so it’s little wonder that advertisers are warming to the market in ever-larger numbers—and that mobile advertising occupied the fastest-growing piece of the pie. We know from our own research that consumers are becoming ever more dependent on, and attached to their mobile devices. Globally, consumers get nearly a quarter of their media on mobile devices, and half of all internet users use their smartphones or tablets as their primary—or only—means of accessing the Web. Mobile wraps all the power of digital into something you can fit into a pocket or a purse and check as frequently and as easily as you’d check your watch—and as more advertisers realise that, we predict that the IAB’s figures for digital advertising overall, and especially the figures for mobile advertising, will continue to rise exponentially.” — Crid Yu, VP and MD North America at InMobi.

“Digital spend has reached an all time in 2012 – with mobile registering an impressive triple digit growth year over year. As the consumption of smartphones and tablets accelerates, mobile will be instrumental to driving digital spend in the future. The onus is on the advertising industry to come with with innovative and engaging ad units that are native to mobile devices.” — Geoff Grauer, CEO and Co-founder of Pontiflex.

“Growth in digital advertising is starting to mirror media consumption where increasingly media consumption is travelling across screens. Multi-screen approaches to digital advertising have become critical for brands to reach their audiences. While this may sound like more work for brands, the upside is that the new screens actually provide even greater opportunities to engage consumers as they lend themselves to much more personalized engagement with the consumer via interactive, video, social and local advertising.” — Jivox CEO Diaz Nesamoney.

“Amazing news for a channel that was still considered emerging media not too long ago. We’ve passed some major milestones such as the billionth active user on Facebook, more than half of Americans with high speed internet service/web-enabled smart phones, and more than seventy-two hours of video uploaded to YouTube every minute. With digital now comprising 20-30 percent of daily time spent with media, this emerging channel has come into its own. There’s less focus now on the differences between online and offline and more importance being placed how both can be used together to engage with customers wherever they are. We certainly see this trend at Kenshoo where search and social are working together to not just efficiently drive sales, but also build relationships and brands at scale. $36.6B and counting!” — Josh Dreller, Director, Marketing Research for Kenshoo.

“With reports projecting that there are more mobile devices than people in the US, these new numbers released by the IAB prove that mobile is still our biggest growth opportunity, currently at only 9 percent of the total internet ad revenue. The trend for native advertising on mobile holds the largest promise for brands and if they are not spending their advertising budgets on native mobile advertising, they are missing out.” — Marla Schimke, VP of Marketing at Zumobi.

“We at SponsorPay are very excited about the news! From talking with our clients, we have seen that mobile video in particular is a very popular format for brands this year. There is also a strong interest in multi-platform engagement. Brands are seeing the benefits of engaging their audience with meaningful interactions across different devices via both consistent and persistent experiences. As mobile advertising continues to evolve, we expect the popularity of engagement advertising to grow rapidly and soon challenge some of the more established formats.” –- Projjol Banerjea, VP of Marketing and Talent at SponsorPay.

“The IAB results mark a significant milestone for the industry. The data corroborates what is perhaps the biggest shift I have seen in a decade in Media. Agencies are opening up to technology, truly partnering with technology and analytics providers to fundamentally change the way they deliver value to today’s premiere brands.” — David Jakubowski, Chief Executive Officer, Aggregate Knowledge.

“The double-digit growth of digital media ad revenue reported by IAB demonstrates that today’s CMO’s are starting to catch on… Budgets are shifting from traditional channels to digital channels to support the needs of today’s consumers that want to be served relevant content and consume their media across a multitude of devices.” — Pascal Bensoussan, Chief Strategy Officer, Aggregate Knowledge.

“While the revenue increase is certainly positive, the greater opportunity still lies in shifting more brand dollars online. We need to make it easier to buy digital and talk in terms that resonate with the brands. We continue to posture that CTR is the wrong measure, yet the performance pricing model accounted for 66 percent of activity in 2012. In the offline world, two thirds of advertising is spent on branding—a medium that cannot be measured through CTR. We are finally seeing solutions that address the brand side of the equation, using data such as viewability and interaction. As an industry, we need to embrace and action this data. That will help us not only preserve this growth, but further accelerate it.” – Denise Colella, President, Maxifier.

“Growth in digital advertising revenues has to be about value, not just eyeballs.  Money will continue to flow, but the channels that win will be those where value can be reliably measured. Rather than simply taking what works for paid search and applying it across other channels, methods need to be tailored to the unique characteristics of the channel to get an accurate measure of its true value – including brand effects of display and social, as well as cross-device usage, that traditionally have been more elusive to measure. Display advertising is a perfect examplewhere we are seeing advertisers increase their spend 2-4x now that they areable to measure the full-funnel value of the channel. We’re bullish on the continued growth of digital advertising, particularly as more reliable means of measuring the true value of channels like display and social become more widely adopted.” – Rob Cooley, OptiMine Software CTO.

“Given the rapid rise of real-time bidding platforms which provide more efficient and better targeting, it’s not surprising that advertisers continue to invest in heavily in online channels. Using modern attribution and analytics capabilities, large advertisers are also able to better understand the efficacy of digital advertising as part of their overall media mix, which in turn leads to increased opportunity for publishers ad networks that can deliver strong ROI.” – Paul Pellman, CEO for Adometry.

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Mike Daly is an award-winning writer and editor with 30 years of experience in publishing. He began his career in 1983 at The News of Paterson, N.J., a long-since defunct daily paper, where at age 22 he was promoted to the position of Editorial Page Editor. Since then he has served in managerial capacities with several news organizations, including Arts Weekly Inc. and North Jersey Media Group in New Jersey and Examiner Media in New York. His work has been honored on numerous occasions by the New Jersey Press Association and the Society for Professional Journalists.

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