Towards a properly measurable industry: the state of digital [IAB]

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Digital Map of the world

The DMMA, a voluntary non-profit body which represents the interests of the South African digital industry recently rebranded as the Interactive Advertising Bureau (IAB) South Africa. This afforded its chairman Jarred Cinman the opportunity to attend the IAB Leadership Meeting in California. We asked him to share some of the trends, lessons and debates coming out of the conference.

The IAB — apart from now having licensees in 42 countries — has a full-time staff of over 50, with headquarters in Manhattan. The conference is sold out and boasts speakers from major players like Google, Yahoo and Wells Fargo.

First, before I offer the final insights from this 1000+ gathering in the somewhat cheesy location of Palm Desert, California, I apparently need to state, again, what the IAB is.

I was alerted to a tweet from a couple of weeks ago where an IAB SA (DMMA) member was bemoaning the fact that the IAB rebrand represents another shift “toward agencies” and away from online publishers. So, for the record — and anyone is free to use the Google to check this themselves — the IAB is a publisher-led organisation. This conference was largely consumed with a single question: how to drive more spend to online publishers.

It’s a bizarre idiosyncrasy of the South African market that seasoned publishers know so little about an organisation that has effectively defined the standards for all the ads they run, reported ad spend with publishers in numerous territories and been a fearless champion for digital publishing for close to 15 years.

In fact it is unusual for agencies, and brands, to belong to an IAB. South Africa is pretty unique in this regard and it provided a fantastic opportunity for dialogue and for different parts of the industry to align their interests. The goal, after all, is to drive spend toward digital, at the right rates, and consolidate the medium as the most important for the next generation of media consumers.

If you know anyone in publishing please tell them this.

With that said, I’d like to share some of key numbers and initiatives from this conference.

Digital marketing sits at around US$100-billion world-wide. If that figure doesn’t blow your mind compare it with a small market like South Africa which is *thought* to have spend in the region of US$200-million. That’s merely an estimate, of course, because the country still doesn’t actually have spend numbers for its market. More on that in a moment.

By 2017, this will have increased to US$185-billion, with a lot of growth coming from markets outside the US. For anyone in digital media or marketing: be happy. These numbers are going to drive massive success in all of our businesses.

In most markets currently measured, Google accounts for around 50% of the total online ad spend. That excludes some notable markets like Russia where local search engines and social networks have bucked the trend and captured most local advertising roubles. But that is a rare exception indeed.

South Africa meanwhile is currently in a similar situation. The issue highlighted by Naspers in recent days with regards to Google’s paying of local taxes is also not unique to it.

The IAB has a global partnership with PricewaterhouseCoopers to measure digital adspend. Even the mighty PwC and IAB US can’t get Google or Facebook to divulge their revenues but with experience in far larger markets they have techniques for estimating and validating this spend which other markets can also utilise.

Apart from the UK — where digital is the largest single medium at 32% of adspend — most countries still remain the domain of traditional media. While print is in heavy decline, broadcast remains massive and outdoor is actually growing. This is a product less these days of penetration and more of the failure of the industry to move brands to offerings they find as compelling as TV and radio; and of people in marketing to properly grasp the power of digital media.

The IAB regards fraudulent traffic and fake clicks as one of the primary threats to building this credibility. If people start to believe that the results the industry is showing them and which they are paying for are inflated by bots the fledgling medium will discredit itself faster than its impressive growth in the past few years.

Lastly, both mobile and native advertising remain on the lips and at the front of most forecasts for where growth will be going forward. This is not new but both of these put new pressures on ad sales and measurement, and no-one anywhere has a solid idea of how to solve these. In this respect South Africa and other developing countries have a chance to move ahead. With less to lose on the desktop they have everything to gain from innovation.

IAB South Africa was welcomed — along with IAB China — in the main auditorium on day two as the first African chapter of the IAB. Make no mistake though, the Chinese were the ones enjoying the classy lunches and the close attention of IAB senior leadership. And well they might in a market with 600-million internet users. As an internet industry South Africa is perilously tiny on the world stage. To make a mark will require that country’s digital industry — publishers, agencies and brands — to rally together, support each other and be ingenious. It is the closest to the African market and it needs to reach out to its friends on the continent and go on this journey with them.

The scale of US media owners (like Google), ad networks and exchanges, content generators (such as the incredible VICE Media) is so gargantuan that operations in smaller countries risk being flattened by them. To some extent they already are. If people in those countries want to preserve local industry and have something they can be proud of on a global stage they need to work seriously hard. Which is not to say anyone should — or could — be dismissive of the multi-nationals that are a part of everyone’s lives. They need to foster new relationships with them too so that they are also contributing to the digital industry in all markets.

Ultimately the industry will be measured by its ability to deliver business results for our customers. So long as advertising revenue is the primary contributor to our businesses — publishers and agencies alike — those customers are people inside major corporations who we need to be persuaded to move their budgets over to digital.

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  • sandra gordon

    Maybe publishers are confused because the DMMA struggled over the years to establish a reputation and communicate real intent. And it has been and still is and chaired and by agency people. Associations representing media owners seldom collaborate/collude with agencies.

  • Jarred Cinman

    Sandra – thanks for your comment.
    I think this is a misconception. The DMMA was chaired for a number of years by Nikki Cockcroft who spent a considerable part of her career in publishing businesses. Whilst I work at an agency both the Deputy Chair (Gustav Goosen) and the Head of Publishing (Tim Spira) come from major publishers.
    But even leaving this apart, one has to look carefully at the activities and structure of the IAB that we have put in place over the past year. Most of our effort goes into the measurement currency which is a key publisher issue. And we have setup strong Councils – in particular the Online Publishing Council – which represents most major publishers in a very similar way to what the OPA did at the start.
    Even if all of this doesn’t convince you, the rebrand as the IAB should. The IAB is a major online publishing organisation in most countries (in the US, in fact, they have few agency members which tend to be represented by the AAAA). This will drive us onward towards being even more immersed in publishing issues.
    I find, in general, that people closely involved with IAB SA feel a lot more comfortable about the work we are doing – which is extensive and demanding, but we have had some major victories for publishers in the past year. Perhaps we just don’t do a good enough job of communicating this to the industry more broadly but if you take some time to hear about all our projects I think a lot of your concerns would be alleviated.

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