The Brand Moment

1. The Brand Moment IAB Innovation Days @ Internet Week “The Future of Display” New York, NY June 8, 2011

2. I.The Challenge

3. Our Goal: To Build Our Customers’ Brands A brand is the collection of assets and capabilities that allow one company to charge and to realize premium prices versus like competitors in the same category through time.

4. Interactive Advertising Revenues Now Total $26B In billions Source: IAB Internet Ad Revenue Report 2010, Released April 2011.

5. Almost 40% Is Display Advertising Form ≠Function Source: IAB Internet Ad Revenue Report 2010, Released April 2011.

6. Brand Marketers Face a Consumer-Pursuit Crisis Share of Internet Ad Spend of Total Ad Spend (%) Leading Brand Advertisers, U.S. 2009 ($ millions) Time Spend vs. Ad Spend, by Media Type (%) U.S., 2009 0 10 20 30 40 TV Radio Print Internet US media ad spending on Time US households spend with Source: Bain, Forrester, AdAge, KPCB

7. Agencies & Publishers Foster Brand-Agnosticism Which metrics are most valuable for brand-building campaigns? What brand marketers want What brand marketers get Sources: Bain/IAB “Building Brands Online,” 2010, Morgan Stanley, ComScore

8. Industry Drives Reduced-Price Tonnage, Not Brand Love Banner Ad Impressions & CPM, 2005-2008 Rich Media Impressions & CPM, 2005-2008 Endless supply + “Response dependency” = Relentless commoditization Sources: Bain/IAB “Building Brands Online,” 2010, Morgan Stanley, ComScore

9. NATIONAL ADVERTISERS So Marketers Find Online Valuable Largely for DR Reach/brand building Call-to-action Source: Bain ad buyer survey (02/2009); Bain analysis

10. How Much Online DR Is There? U.S. Monthly Standard Mail Volume, 2009 7.6 billion U.S. Monthly Display Ad Impressions, 3Q 2010 400 billion Sources: Direct Marketing Association; Google; comScore

11. Media Agencies Contribute to Brand Commoditization • Procurement processes focus on commodity formats (“spots & dots”) • Dominant supply chain systems can traffic and measure only basic commodity formats • New exchanges and “demand side platforms” trade only in familiar, mass formats • Agency compensation models incentivize routinized buying: “The only way the agency makes money is by putting less people against the task at hand.” (Adnetik) • To escape the commodity spiral, clients are turning to social media, brand integration, and “an experience, an application, a service that the consumer actually wants.” (Booz & Co.)

12. II.The Opportunity

13. Interactive Advertising Needs a Creative Revolution • “Creative quality is driving 70% of the business impact we’re seeing in our return on advertising.” (P&G) • Creative agencies and publishers must collaborate to create outstanding marketing and communications products • Creative teams now must include technologists along with writers and designers, to engage the intellect and emotions of audiences and individuals across all channels, toward the goal of creating enduring brands • “Causing the heart to beat quick is at least as important as making the mouse click.” (IAB)

14. The IAB Rising Stars • IAB Billboard, IAB Filmstrip, IAB Portrait, IAB Pushdown, IAB Sidekick, and IAB Slider

15. … Requires “Brand Performance” Standards A Divided Industry… “Performance”/ Direct Response Growth With Premium Price Realization Objective “Branding” Company Leadership CFO End Client CMO/CEO ROI/Controlling input costs Sales & Return on Brand Equity ROE/Controlling output value Investment Measure Interactivity Beyond the Click Ad Metric Clicks Awareness Blended Brand Currency CPC/CPA Pricing Scheme CPM/Fees Digital+ Social Media, Sponsorships, Custom Formatted advertising Primary Medium Primary Client Procurement Marketing/Advertising Dept. Intermediary Media agency Creative agency, digital agency Marketing-Media Ecosystem

16. Making Measurement Make Sense IAB leadership update May 2011

17. Project deliverables Objectives Key deliverables • Definition of a standard “currency” for measuring online exposure • Development of standard brand impact metrics, addressing all major aspects of “brand presence” advertising • Methodology for cross-media comparison of exposure and brand impact metrics (linking online to TV, print and radio) 1 Determine the right metrics and solutions 2 • Drive industry consensus around the solution • Plan and process for gaining stakeholder input (e.g., association members, research community, vendors) and driving consensus around the chosen solutions • Engagement of industry leaders to champion measurement process 3 Establish measurement governance model • Mission statement and management structure for an ongoing measurement governing body • Governance process with roles/responsibilities, standard-setting process and success measures • Implementation plan for roll-out of metrics, standards and mgmt. structure (including roles, timeline and communications plan)

18. Marketers & Publishers Must Drive Upstream… Response Brand reach Brand engagement Larger-scale, more automated, efficiency model Larger-scale,reduced service, efficiency model High touch,high cost, premium model Source: Bain/IAB “Building Brands Online,” 2010

19. …and Leverage Integration Advantages Q: What percent of your total above-the-line budget is spent on each kind of marketing campaign? Key findings • Leading brand marketers are reorganizing teams around campaigns, not platforms “To be most effective, online creative has to be integrated with other media and developed together.” - CPG Marketer Client Lead, Agency • Agencies are being forced to follow suit, often through new team structures • “Agencies are making conscious decisions to integrate, physically moving around to solve the pain points. Now the account and creative directors sit literally next to each other.” • Head of Digital Advertising, Financial Services 6/8/2011

20. Addresses and helps resolve contractual and competitive challenges surrounding data usage and collection Outline interactive advertising and data collection mechanics Identifies the parties currently participating in the industry Introduces industry best practices for data usage and control Comprehensive lexicon of interactive advertising data definitions Data Demystification

21. “Social Marketing” Is a Tool… Magic Bullet Theory Originated in the 1920's and 1930's, proposed that as an audience, we are all passive and equally susceptible to media messages. Media thought to have the ability to shape public opinion and persuade the masses toward nearly any point of view desired by the author of that particular text. vs. Social Influence Developed by Lazarsfeld & Katz in the 1940’s and 1950’s, proposed that media work more indirectly, through a "two-step flow," by which media messages reinforced what people hear from others in one or another of their communities. These social influencers are known as “opinion leaders.”

22. … To Provide Intimacy and Reach The Scale of Social Media Social networking sites have surpassed personal e-mail in global reach at 70.7% vs. 72.6% by Dec 09, and growing at a faster pace than any other sector. “Social Media sites are characterized by the inherent functionality that facilitates the sharing of information between users within a defined network. The nature of Social Media allows for the initiation of conversation by either party.”* *IAB Social Media Metrics Definitions, May 2009 Chart Source: Nielsen NetView, January 2010

23. IAB: The Industry’s Social Center

24. A Manifesto for Digital Publishers Innovate Faster & Better Create Relevant Scale Extend Excellence Across Channels Build a Digital Idea Factory Forge a Tech Strategy Create more original ways for users to experience your company and brands, and for marketers to experience your users, by developing products and services that take advantage of your content’s ability to engage. Coordinate your digital advertising, content development, and distribution platforms to assure your ability to reach consumers and serve advertisers in volume and with the timeliness they expect and require. Transform your people, planning and processes so that everything you do supports the creation and curation of exceptional experiences across platforms. Serve your best clients by bringing them proprietary consumer insights, marketplace analyses, creative inspiration, products, services, and opportunities that provide them and you superior returns. Develop a point of view and a leadership position in relevant content, marketing, and distribution technologies to guarantee yourself a seat at the table with major tech providers as they attempt to chart paths for your business. “On Twitter, we have the same 140 characters that Ashton Kutcher has. At the same time there are new opportunities where new technologies allow room for beauty and differentiation through curation and design, which we are very good at. We can take ourselves in new places.” - Content Executive “Our company’s rich media products across the network are single spec. You can build a single creative and it will work everywhere on our network. You can’t underestimate the operational advantage of that. We have the scale to make that work.” - PublishingExecutive “It starts with the idea, not the buy. It’s not about buying GRPs. Its about engagement and experience for the consumer and how we use that to sell more stuff.When we go to Facebook and Google, we bring our creative agencies.” - Client CMO “You can’t sell to an audience without content that supports lifestyles and interests. But even with that, audiences are so fickle about the brands they engage with. You need a constant stream of user-facing innovation.” - Agency EVP “We need central intelligence on video platforms, CMS, ad serving, underpinnings across sites, and many other things. We need to be digital natives on this.” - Publishing Executive

25. Thank You!