Picking sides for the Interactive industry’s Golden Age

February 24, 2010 § Leave a comment

The IAB Annual Meeting and Leadership Conference just ended in Carlsbad, California, is now easily the most important media trade event in the country today. The American Association of Advertising Agencies’s “Transformation 2010″ conference will take place next week in San Francisco and many of the issues that dominated the agenda this week in Carlsbad will re-appear on the 4A’s agenda in front of important agency principals and buyers. But Interactive owns the issues, and this is the good news and bad news confronting the industry today.

Randall Rothenberg, IAB CEO, understands both aspects. He was ebullient through the event, clearly charged-up by the size of the crowds, the content-rich agenda and warm social atmosphere, sensing that Interactive is on the cusp. But his opening remarks were devoted to leadership knowing that the Interactive industry must pull together to meet a broad set of marketer requirements, inclusive of the core need to support brand advertising, which, as Randall explained, is not a fantasy object (or objective). Brands are real, as real as the people that define them through their loyalty.

Unfortunately, the Interactive industry has loyalty issues and is struggling to decide what side to play on – seller or buyer. By charter, the IAB represents sellers. It leaves room under its tent for associate members, such as ad agencies, that have more than a passing interest in its proceedings, but the IAB represents the interests of Interactive sellers, by design.

In every other media trade organization “sellers” means content providers. The Newspaper Association of America (NAA), the Television Bureau of Advertising (TVB), the Magazine Publisher’s Association (MPA) and the Cable Advertising Bureau (CAB), for instance, all have well-defined constituencies that are pre-dominantly their content providers. Interactive, on the other hand, does not. Wander the hallways of the IAB’s Annual Conference and substantial segments of the Interactive seller population – e.g., numerous ad networks, ad exchanges and data mongers – are working expressly for the advertisers, putting them at odds with many other sellers in the association, notably publishers. This is a problem affecting leadership; it is hard to lead from the middle.

Someone over the course of the two day conference talked about “ad model chaos” within the Interactive sector, which is the heavy price buyers pay under the weight of the industry’s division. The chaos exists because not everyone is working on the same problem for the same purpose. For many, the frame of reference is the advertiser. For the rest, the frame of reference is the content provider. The result means an industry not competing with itself, but at odds with itself, which is clearly evident in its products, its value chain, and its conversations.

It will be argued, as many have argued from the beginning, that the industry is lined-up behind consumers and that the visionary approach of Interactive media is forging one-to-one relationships with consumers, minus the middlemen. This does nothing to mute the antagonisms, of course; nor, would it seem, has it done much to make the industry more successful or desirable; nor, finally, left it with many better options at its Annual Meeting other than to propose getting tougher on consumers. Getting tougher on consumers is an odd directive coming from an industry that owes its existence to the consumer-driven forces of nature, and stands in contrast to the data from Vivaki, for example, that awarded first place to the AdSelector (operative term, “selector”) video product from Hulu and dead-last to pre-roll.

To be sure, the IAB is leading. It begins by drawing everyone to the table, and the Annual Conference did that this year in record numbers. The flourishing attendance endorses IAB Chairman David Moore’s predication that the Internet’s Golden Age is ahead of it, but it will remain there until the industry decides upon its loyalties.

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