Thursday, November 12, 2009
New IAB and Bain & Company Study Poses New Organizing Model for Online Publishers

700 Marketers say they require “Triple-Play Services” from Online Media Companies

New York, NY (November 12, 2009) — Interactive sales teams with category and relationship expertise, services that provide solutions to marketer challenges and better measurement are just some of the organizational and systemic challenges that inhibit online ad growth revealed in “Building Brands Online,” a study released today by Bain & Company, the global business consulting firm, and the Interactive Advertising Bureau (IAB). The results were presented in New York at a meeting comprised of senior marketing, advertising and media industry executives.

Key findings of the study “Building Brands Online” include:  

  • Online ad formats and creative have not evolved to meet marketers’ needs
  • Media companies lack category expertise when they sell to brand marketers and engage with them too late in the media planning process
  • Marketers want integrated campaigns instead of platform-specific media programs
  • While marketers see high value in online advertising and believe that it could be effective at all stages of the purchase funnel, current industry practices inhibit greater investment of brand ad dollars
  • Marketers express needs for differentiated services for their brands and believe that media companies and agencies have to meet those differentiated needs for online advertising to grow.

“The study provides a wealth of insights into how brand marketers perceive online media and what the marketers would like to see media companies do for them. The findings led us to develop an interactive advertising action plan for the industry as a whole, but more importantly, so that the sellers of online media can be more effective at garnering their share of brand advertising dollars,” said Sherrill Mane, SVP, Industry Services, IAB.

“Unmet marketer needs create a major opportunity for media companies to collaborate directly with marketers,” said John Frelinghuysen, a partner in Bain & Company's media practice and lead author of the study. “But few media companies currently have the capability to fill the gaps in online sales and service.”

The path forward for media companies consists of six steps based on the needs expressed by marketers: 

  • Create segmented offerings to meet the separate needs of advertisers who are focused on building brands and those who are looking for direct response
  • Make brand-focused marketers a priority by building a sales force of category experts who respond directly to those marketers’ specific needs
  • Develop a full range of solutions with more engaging options and formats, including social networks, video and other rich media
  • Offer deeper service and support customized to vertical industries, to help advertisers plan, create and measure the brand impact of online ads
  • Optimize the ways that ad inventories are sold, with a range of approaches from full-service to self-service to partnership with ad networks and resellers
  • Enhance organizational effectiveness by setting the right priorities, clarifying internal roles and accountability and investing in sales staff skills and incentives 

“Ultimately, marketers are looking for media companies to offer a true triple-play service model from direct response to awareness to high impact brand engagement,” said Frelinghuysen. “This model is the key to staving off continued price erosion of online inventory.”

The IAB acknowledges the following member companies, whose financial support enabled this important research:

  • 24/7 RealMedia
  • AOL
  • Everyday Health
  • Meredith Corporation
  • MTV Networks
  • NBC Universal
  • ValueClick Media
  • Yahoo!

For more information visit www.iab.net/BuildingBrandsOnline

About the IAB:
The Interactive Advertising Bureau (IAB) is comprised of more than 375 leading media and technology companies who are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit www.iab.net.

About Bain & Company, Inc.
Bain & Company, a leading global business consulting firm, serves clients on issues of strategy, operations, technology, organization and mergers and acquisitions.  The firm was founded in 1973 on the principle that Bain consultants must measure their success by their clients’ financial results. Bain clients have outperformed the stock market 4 to 1.  With 41 offices in 27 countries, Bain has worked with over 4,150 major multinational, private equity and other corporations across every economic sector.  For more information visit: www.bain.com.

Media Contacts:

Marla Aaron
Interactive Advertising Bureau
212.380.4714
[email protected]
Cheryl Krauss
Bain & Company
646-562-7863
cheryl.krauss@bain.com