February 2009 Archives

IAB Sold-Out Annual Leadership Meeting: Live Blog - Tuesday

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12:10 PM

One last session for the morning and the event! Joanne Bradford, SVP, U.S. Revenue and Market Development, and Michael Walrath, SVP, Advertising Marketplace Group, both from Yahoo! are sharing 10 things they think really matter to the industry and Yahoo!.

Brands Matter
Size Matters
Service Matters
Price Matters
Flexibility Matters
Data Matters
Partnerships Matter (that’s one reason they are co-presenting)
Innovation Matters
Longevity Matters
ROI Matters

What doesn’t matter? The majority of the ad networks, according to Joanne.


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Joanne Bradford talks about Yahoo!’s belief in the spirit of partnerships.



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Michael Walrath speaks about why innovation matters.

 

11:40 AM

The annual Great Debate is underway. The statements around the center of it all: Brand marketers don’t need agencies. Interactive publishers can provide everything they need.

What does the audience think at the beginning of the session? Audience text message polling shows 64% disagreeing and 36% agreeing at just this minute.

Abbey Klaassen, Digital Editor, at AdAge, is moderating the panel of four - two who agree and two who oppose.

(A) John Partilla, President, Time Warner Global Media Group - It’s complicated out there. You can’t claim to do too much. We can’t do everything for every advertiser, but we can and will do much more.

(A) Sarah Chubb, President, Conde Nast Digital - Times are slim and the truth is that relationships are about doing the things that are missed. We’ve got to work together, not fight each other right now. She’s glad they aren’t in the ad network business because of the data ownership and Ts&Cs issues that are emerging now. They are never going to be the lowest price, due to the value of what they have to offer. You have to figure out where you fit in the ecosystem. 

(O) Quentin George, Chief Digital Officer, Mediabrands - As an industry we’ve done a bad job differentiating the value of what there is to offer. If we can understand the data, high value inventory will thrive.   

(O) Jean-Philippe Maheu, Chief Digital Officer, Ogilvy North America - We need to take today’s economic situation into account. In ideal conditions a brand is always going to go to a creative agency. It’s the long term trend, but right now we must all fight for the same dollars. We all want to create something fantastic and the creatives who can do it are at creative agencies. 

The audience poll results at the end of the session? Let’s see how convincing the sides where. 46% agree and 54% don’t. Looks like a slight change.

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Our panel was all smiles before the debate began.


10:19 AM

Omar Hamoui, founder and CEO of AdMob, started by admitting he isn’t a “conference guy” but gave kuddos to this event. He’s got a few “news you can use” items to take home and start working. But, on to the good stuff—mobile. He’s displaying a live mobile campaign on an ad management interface and going over the details of how easy it is to manage and collect reporting. We’ll see what’s happening with the campaign between now and the end of the session. 

The platform is growing at tremendous speed and with diverse audiences. Any audience you want, they are there—and very targetable. What about the experience? Some users now prefer to use particular apps on mobile devices rather than online. Videos, maps, pull vs. push, rich mobile sites and more continue to make the mobile experience even more robust and they will expand farther in the next generation of mobile.

Eric Bader from Brand In Hand (an actual client of AdMob) is talking through their case-study and comparing the mobile work with other channel results. He agrees with the session title “Mobile: My Platform Can Beat Up Your Platform.”


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Omar Hamoui explores the possibilities of mobile advertising with the audience.

 

9:50 PM

“Rumors on the Death and Display Have Been Greatly Exaggerated” according to David Rosenblatt, President, Display Advertising, Google.

The Google product development model has three core principles. 1) openness 2) results 3) efficiency. David is running through how Google is addressing them each specifically through products. The strategy is to use their large presence, technological advantage and more to make it happen.

How does Google feel about agencies? They love them because agencies understand brands.

Lots of questions from the audience:

Is Google a technology company or media company? Great question from an audience member who asked he try to avoid answering “both”. However, it is “both” says David. That’s the reality they are working toward. 

Do you believe all impressions are created equal? No - the point is that each unit of inventory has a different value to different people. The marketplace model takes care of that. Pricing isn’t the core issue—it’s yield.

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David Rosenblatt explains how one man’s remnant inventory might be another man’s premium.


9:14 AM

Noticed any consistent themes throughout Ecosystem 2.0: Brands Battle Back? Randall has and he shared them to start the final day.

1. Interactive is an AND media not an OR media

2. Services (even consensus around what kind of services)

3. The value of the user experience

4. Use the tools

9:06 AM

The final day of Ecosystem 2.0: Brands Battle Back is just beginning. Last night’s dinner was the perfect end to a day of intense presentations, debate and discussion. The conversation may have been intense—but attendees still enjoyed some down time to reflect and relax.  Stay tuned for the final sessions…… 

 

 

IAB Sold-Out Annual Leadership Meeting: Live Blog - Monday

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Our last panel of the day took a political spin with a frank discussion on the lessons learned from the Obama campaign in social media.  Moderated by John Battelle, the panel featured:

Tom Arrix, Vice President Sales, Facebook
Andrew Mitchell, Vice President Interactive Marketing, CNN.com
Rob Shepardson, Founding Partner, SS+K

The discussion ranged from the coolest thing they did during the election (CNN/Facebook inauguration mashup for Andrew Mitchell) to Battelle asking Tom Arrix if Facebook made money off the campaign (answer = page views went up).  Rob Shepardson also made some great points about how what Barack Obama stood for meshed perfectly with the Social Media platform in distribution and organization.

This was a great end to a fantastic day.  I’m off to the networking reception followed by dinner.  Tune in tomorrow morning for updates from Day 3 of Ecosystem 2.0 - Brands Battle Back.


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The panel discusses how difficult it is for Barack Obama to stay relevant in social media after winning.


5:15 PM

Back from break with two more sessions until cocktails and dinner.  First up is Scott Howe, Corporate Vice President, Advertiser and Publisher Solutions Group from Microsoft. Going into the tail end of a day packed with learning and debate, this high-energy performance was just what the crowd needed.

Howe’s presentation was based on three statements:

1) What we can learn from the Great Depression

2) Why the Green Bay Packers are smarter than us

3) Why Geology and Physics should be friends

To try to explain through this blog how each of these statements leads to a lesson learned would not do the presentation justice - so here are the lessons minus the entertainment:

1) Adversity must fuel innovation.

2) We must as an industry defend our value.

3) There are challenges in our industry that can only be solved through collaboration.

I’ll be back in an hour with the final update of the day.


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Scott Howe loves the Green Bay Packers.



4:05 PM

Creative is king as The New York Times team shares how they’ve used creative and “beauty” to drive a 38 percent increase in unique users.

Steve Duenes, Graphics Director, explains that the goal is to always deliver something novel to users—something they won’t find anywhere else. It’s about taking simple data, like exit poll results, and working through a way to deliver the journalism in a new visual experience. As a viewer, watching the samples he’s displaying, you almost don’t even notice you are absorbing the information because it seems so natural and interesting.  

Next up is Aron Pilhofer, Editor, Interactive News Technology. His group consists of ten journalists/developers that form a true project desk. They are working on visual ways to guide readers through important sections of documents, accessing information that traditionally could be very difficutl to sort through. Building community around the sections people wait for each week can and will change the future of newspapers. Is there another option?

New platforms, Times People, Times Extra and apps are slated to create loyalty and drive people back to The New York Times homepage says Paul Smurl, Vice President, Advertising. Multi-platform advertising isn’t new, but continues to be a focus for advertising sales. 

The last break of the day—I need a sugar rush! Wish me luck.

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Steve Duenes walks the audience through recent visual data displays.


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Aron Pilhofer explains the role of the new interactive news technology team.



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Paul Smurl shares new platforms and apps designed to engage users.

 


3:20 PM

Back from lunch and a little warm sunshine, the afternoon sessions are underway. And, a little surprise…..

The IAB, with the help of small publishers across the country, created “I Am The Long Tail,” a collection of homemade videos from small publishers themselves, telling the story of how online advertising allows them to thrive in business and in life. The video will be available at iab.net/longtail soon.

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David Doty introduces “I Am the Long Tail.”

Recession 2.0: A Deep Dive Into the 2009 Interactive Economy features two presenters. Mark Mahaney, Director, Internet Sector, Citigroup Investment Research, is taking on “Where Are Advertiser Dollars Going?” His big picture answer: advertising outlooks will continue to decline, but there is opportunity. There is a $125B opportunity, five times the total dollars spent on online advertising in 2008. The advertising spend can and will shift online. The biggest areas of ad innovation are mobile, video and local advertising. CMOs do like Internet advertising especially search, he says.

Terence Kawaja, Managing Director, GCA Savvian, is dealing with “Where Are Investor Dollars Going?” Private investor activity was ramping up. M&As were producing activity. The buyer universe was expanding. But, now the world has changed and so have the stats and the dollars. Content, agencies, performance marketing and social/blog deals are still happening because the investment spectrum is all about balancing risk and reward. And, social is going corporate while corporate is going social.

The good news: interactive is the only bright spot in advertising. Digital is the only channel that can deliver value to brands. It’s only going to happen with the support and help of the leaders in this room. 

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Mark Mahaney asks what will be the Kindle of interactive advertising?



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Terence Kawaja makes some provocative comparisons between Wall Street and Madison Avenue.



1:20 PM

Last year at the 2008 IAB Annual Meeting Wenda Harris Millard famously declared “we must not trade our diamonds like pork bellies” when speaking about ad inventory. David Payne, CEO, ShortTail Media, continued the pork analogy with a presentation about how to turn pork bellies into premium inventory.  He gave six steps to accomplish this:

1) Radically improve ad units - after all the two-minute commercial break is interpretive but it can also tell a story.
2) Radically cure metrics - we must move beyond the click and provide marketers with meaningful data.
3) Radically improve the creative - amazingly, interactive creative is not evolving as fast as television.
4) Create conventions - drive simplification to gain scalability
5) Develop smarter pricing strategies
6) Focus on simplification - simplification and standardization does not mean commoditization.


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David Payne believes innovation is the heroin that both fuels and kills interactive advertising.

With all this talk of pork, I think I’m going to head out for lunch.  Be back with more this afternoon.


12:40 PM

Things picked up quickly after break with Bob Carrigan, CEO, IDG Communications Worldwide. He discussed the challenges that traditional media companies face as marketers continue to shift money into interactive away from legacy media.

The main concepts of Carrigan’s presentation were: Looking Below the Line, Audience Centricity, Everything is Custom, Beyond Our Borders and Evolution or Extinction.  Within each concept, the overriding theme was traditional media must embrace technology in order to create value for their customers.  It’s about turning media into a service.  There’s still plenty of marketing dollars to be spent.  The question is whether you can create the value marketers need in the digital age.

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Bob Carrigan continued an overriding theme of Ecosystem 2.0 - turning information into insight.


11:55 AM

Some quick breaking news before the next session - Revenue Science is now known as Audience Science. Visit www.audiencescience.com for more info.

11:26 AM

Randall Rothenberg just wrapped up a discussion with IPG leaders, including individual agency leaders. Nick Brien, President and Chief Executive Officer, Mediabrand; Howard Draft, Chairman and Chief Executive Officer, Draftfcb; Michael Roth, Chairman and Chief Executive Officer, Interpublic Group and Robert Bagot, Chief Creative Officer, McCannSF shared the details of how the IPG holding company came together and manages the business. Keeping their head down and focusing on the client and audience is working wonders for them.

A current Hyundia campaign was discussed as an example of how brands are listening to the challenges consumers are currently facing. The offer, in this case the option to return your new car if you lose your source of income, is an important part of the campaign. Media + offer + creative = direct marketing and much more these days.

Consumer engagement is more important than ever. That means blurring the lines between brand marketing and direct response marketing.

Breaking down silos between agencies and expertise has been key to IPG success.  One person is accountable for reaching across the different organizations and to the client. It is the agency’s responsibility to be accountable. Clients are demanding an open architecture so IPG is responding—and holding their senior executives responsible through compensation.

Audience members are talking too. Search twitter for #iabnet for details.

Off to a break. Need a snack to maintain my blog energy!


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Our first panel of the day featured powerhouses of the agency world discussing how agency brands are battling back.

 

10:10 AM

Michael Mendenhall began by addressing how social media is impacting marketer reach. Social networking sites are now a source of advice and are being used to solve some of the world’s biggest challenges—for people who may have never experienced the power of the Internet. The paradigm is no longer centered on interrupting a consumer message with your product, it’s about creating a conversation around your product.

HP is tapping the collective intelligence of customers by hosting forums where they can help each other. These forums are expected to be critical to HPs success as the brand strives to engage customers through digital media. But, they don’t expect traditional outlets to disappear, just adapt.

One example is MagCloud.com -  a  beta version of an HP site/product which allows anyone to customize and instantly create and print magazines. Sounds interesting.

Michael also drew comparisons between the successes of TV, through the help of independently and locally operated affiliates, and brand building online. Brands can become “the big tv three” by contracting with a vast number of local web sites. The problem is it takes time and research, which can be prohibitive. The winners will be the agencies who can rationalize it and pull it all together. And, they are begining to do it.

For many companies brand specific digital networks will just be a small part. Brands aren’t defined by campaigns anymore, but by the complete environment they create.

For HP success is about “return on information” not “return on investment” in today’s marketplace.


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Michael Mendenhall believes brands are no longer defined by their campaigns, but rather by the consumer ecosystems that we need to support.


9:45 AM

Randall Rothenberg was back on stage to set expectations for the day and comment on last nights activities.

For the first time in any industry—anywhere—everyone has an opportunity to communicate with anyone. We all have unlimited access to information and the technology needed to share it. For us—marketers—this ability to create and distribute content creates a challenge. We no longer control the limit of information consumers can absorb. How do we prosper in a world without limits? That’s the reason the event is themed Brands Battle Back.

Our industry’s leaders are here to explain and tell us what they need from the rest of us to make it happen. First up Michael Mendenhall, SVP and CMO, HP.

8:49 AM

Welcome Back!

Good morning and welcome back to the sold-out IAB Annual Leadership Meeting. Looks like the crowd has recovered from last night’s hopping Poolside Welcome Reception (and the Oscars). Don’t worry, no one wound up in the pool—at least not before I called it a night.

We’ve got a full agenda today, starting with comments from Randall followed by the keynote presentation—Marketing 2.0: The New Affiliates—by Michael Mendenhall SVP and CMO of HP. I’ll let you know how it goes.

In the meantime, here are some photos from last night’s poolside reception.



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7:10 PM

That’s it from Orlando for now. I’m off to the Poolside Welcome Reception for dinner and a drink—and some warm, fresh air. It’s a far cry from the snow showers I left behind in NJ. Check back in tomorrow morning and throughout the day for complete coverage. Tomorrow you’ll also find video clips of Randall’s and Wenda’s opening sessions on iab.net.

7:05 PM

IAB Sales Excellence Awards

Back to the awards—it’s time now for the IAB Sales Excellence Awards presented by Jack Myers, Media Futurist, Innovation Consultant, himself.

They are based on as inclusive and objective a standard as exists in today’s marketplace, The Myers Annual Survey of Advertising Executives—the one database that contains multi-year metrics on the performance of interactive ad sales organizations of all types: portals, networks, individual branded publisher sites.

The envelope please…….

Account Executive of the Year: Josh Thau, Microsoft Advertising

Account Executive of the Year Finalists
Paul Chenier, IGN Entertainment
Dan Bonert, Yahoo!
Stacey Pear, Yahoo!

Long Term Achievement: Washington Post Digital
Most Innovative: Nickelodeon Online Sales
Best Newcomer: Hulu
Again, check IAB.net in a few days for more details on these outstanding accomplishments. (Read the press release to learn more.)


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Jack Meyers tells the audience they must capitalize on this time of economic crisis through the value of media brands in connecting marketers to consumers.


6:45 PM

Keynote Presentation

Wenda Harris Millard, President, Media and Co-Chief Executive Officer, Martha Stewart Living Omnimedia and the IAB Board Chair, is now welcoming the crowd and explaining why brands need to battle back -the theme of this event. Running through the cold, hard facts of how the recession is impacting the media industry she suggests we leave 2008 behind and think about how we can move forward in 2009, but not expect much recovery.


Innovation, reinvention, renewing—these are the things we need to be thinking about now. We have to move forward and fast. We must master media complexity—both the right and left brain aspects of it.


Are we innovating as we should be? The advertising business is about the art and science of persuasion and now participation. How has that changed our plans? Where is the creative innovation in advertising? Are we turning the data into the information we need to share with marketers? There are lots of questions to be answered. It’s our job to help marketers stop interrupting the conversation and help them BE the conversation. We are the makers of magic - ACT LIKE IT.


Want to see what other audience members are thinking right now? Search twitter for #IABnet. The feed is jumping!

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Wenda Harris Millard emphasizes that we must not concede marketing to technology.


6:05 PM

IAB Service Excellece Awards

It’s not time for the Oscars just yet, but close. (We’ll all be watching together later tonight.)


David Moore, Chairman and Founder of 24/7 Real Media and Vice-Chair of the IAB Board, is onstage now recognizing some well-deserving IAB members for their support and involvement.


First off, he’s thanking our 2008 committee chairs and co-chairs for their hard work.


Ad Operations Council: Adrian D’Souza, Google, Inc. and Dan Murphy, Univision Online
CFO Council: Bruce Gordon, Disney Interactive Media Group
Research Council: Rick Bruner, Google, Inc. and Beth Uyenco Shatto, Microsoft Advertising
Sales Executive Council: Sheila Buckley, Weather Channel Interactive (Weather.com) and Brian Quinn, The Wall Street Journal Digital Network
Public Policy Dave Morgan, Tennis.com
Legal Affairs: Jason Ryning, Micorsoft and Brad Aaron, Q Interactice
Networks and Exchanges Committee: David Moore, 24/7 Real Media, Inc.
User-Generated Content & Social Media Committee: Heidi Browning, FOX Interactive Media
Email Committee: Craig Swerdloff, Return Path
Hispanic Committee: Mark Lopez, Terra Networks USA
Lead Generation Committee: Gayle Guzzardo, Q Interactive
Mobile Committee: Gary Schwartz, Impact Mobile and Sharon Knitter, Cars.com
Local Committee: J. Sandhi Kozsuch, Cox Cross Media / Cox TV and Lorraine Ross, USATODAY.com
Digital Video Committee: Joey Trotz, CNN.com and Tim Avila, Yahoo!, Inc.
Games Committee: Dave Madden, Wild Tangent and David Sturman, Microsoft Advertising
Search Committee: Ron Belanger, Yahoo, Inc. and Tim Castelli, Google, Inc.

Now he’s presenting the IAB Service Excellence Awards to awards to recognize exceptional leadership and initiative development by a regular committee or council member or a working group participant. We couldn’t do it without your help.

And the winners of the 2009 IAB Service Excellence Awards winners are…. (drum roll please)
Lon Pilot, Platform A
Geoff Petkus, Operative
Steve Sullivan, Microsoft
Zack Rogers, CBS Interactive
Tim Avila, Yahoo!
Mike Hurt, comScore
Christie Lay, Microsoft
Leslie Dunlap, Yahoo!
Lisa Anderson, Time Warner

Congrats to all. Check out IAB.net later this week for more details about the winners and their specific accomplishments. (Read the press release to learn more.)

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Dave Moore recognizes the IAB Service Awards winners.


 

5:41 PM

The Kick-Off

It didn’t take long for the crowd of almost 500 to settle down as Randall Rothenberg, this event’s fearless leader, and President and CEO of the IAB, took the stage to officially kick-off the Annual Leadership Meeting—and set the stage for the next few days.

He reminded us that the whole point of the meeting is to confront tough questions—things that are usually discussed in back rooms are debated on the IAB stage. It’s the best way to resolve tension and smooth the path to growth, together. And—it makes for some pretty interesting discussion, heated or not.

The biggest challenges the IAB is tackling in 2009:

Brand Power - moving beyond the click and beyond the immediacy of today’s response

Measurement Simplicity - reducing the cacophony that surrounds every discussion about media measurement

Killing Complexity Costs - with the help of the IAB-AAAA Reinvention Task Force (Read the press release to learn more.)

Equity for Publishers - rewriting the standard, voluntary IAB-AAAA Model Advertising Contract (Read the press release to learn more.)

Loving Our Consumers - addressing the data-ownership issue at the heart of the regulatory debate in D.C.

Creativity - creating a creative renaissance in interactive advertising (Read the press release to learn more.)

Sounds like a full agenda to me. Good luck!


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Randall Rothenberg opens the IAB Annual Meeting by asking if we can live with the tension between stability and dynamism.

2:40 PM

The Anticipation: IAB 2009 Sold-Out Annual Leadership Meeting

Welcome to the live blog covering the sold-out IAB Annual Leadership Meeting in Orlando. The event hasn’t officially kicked-off yet, but the Hyatt Regency Grand Cypress is buzzing with excitement as leaders of the advertising ecosystem check-in, register and network while enjoying the warm Orlando sunshine—some even played a round of golf this morning. Seats for the sold-out Ecosystem 2.0: Brands Battle Back disappeared almost two weeks before the event, but a few lucky folks on the waiting list got last minute opportunities to come take part in the action.

The IAB Board of Directors meeting is currently underway. No one’s wasting a minute of this unprecedented opportunity to discuss the state of the interactive industry.

Check back here frequently over the next few days to stay in-the-know. This blog is your best source for breaking news and in-the-room action.

See you tonight. The General Session convenes at 5:00pm with a welcome from Randall Rothenberg, IAB President and CEO. He’ll set the agenda of what’s to come over the next few days.

blog-header-rr.gif Quick — name four fantastic, emotionally resonant, culturally significant and successful interactive advertising campaigns from the past year.

Came up empty? That’s what I thought. Palo Alto, we’ve got a problem.

Actually, Palo Alto may be the problem. Fifteen years old, a vital component of the marketing landscape by any calculation, interactive advertising is still characterized in the public eye and practitioners’ minds by its technical sleight-of-hand instead of its narrative and emotive power. This has led our industry to a creative crisis that, if not resolved, will almost certainly impede our — and our customers’ — growth.

It’s time to engage marketers, agencies, and publishers in a public debate about creativity in interactive advertising. The IAB has set aside much of our February 22-24 Annual Leadership Conference in Orlando, Florida, for this discussion. But if you’ll indulge me, I’d like to launch the debate right here by naming names — the four enemies of online branding:

  • A direct-marketing culture and tradition that devalues creativity and its long-term effect on brands
  • An interactive agency business model that disincentivizes greatness and fails to penalize mediocrity
  • An unwillingness by mainstream agencies to integrate technologists as full partners in the advertising creative team
  • Media industry values and habits that malign and depreciate our own products, and by extension our customers’

The Banner Shibboleth

The issue of brand advertising and its future in interactive media is particularly prominent now, as the U.S. struggles through its worsening economic crisis. With much of marketing spend frozen, mainstream media suffering from significant advertising dropoffs, and interactive ad growth slowing, the blame game has become a desperate pastime in our industry, especially from premium publishers trying to maintain pricing on their display inventory.

The latest shibboleth is the online banner ad, whose formats IAB members first began standardizing more than a decade ago and subsequently realized in the “Universal Ad Package” in 2003. Industry chatter recently has begun to attribute pricing pressure to the mere existence of these standard ad units. New York Times “Bits Blog” columnist Saul Hansell this week related an encounter with MSNBC.com President Charlie Tillinghast, who told him that “that the standard sizes have allowed the advertising networks to turn display ads into commodities.”

“We made it possible for any Web site to run ads through the ad networks,” Mr. Tillinghast told Mr. Hansell. “That’s created an oversupply of space.”

On the one hand, the charge is literally true: Standardization of anything — the ASCII character-encoding scheme, the North American 15A/125V ungrounded electrical plug and socket, the IEEE/ANSI Performance Criteria for Alarming Personal Radiation Detectors for Homeland Security — turns it into a commodity, “an article of commerce or a product that can be used for commerce.” There are many types of commodities characterized by natural or artificial standards — coal, oil, currencies and, of course, pork bellies, to name a few.

On the other hand, the charge, in relation to advertising, is historically jejune. Blaming Internet banner standards for commoditization is no different than attributing television advertising pricing fluctuations to standardization of the 30-second spot, or faulting the magazine page for the pressures on magazine advertising.

Indeed, the accusation ignores the very reason IAB members — including such historic beneficiaries of advertising standards as The New York Times and CBS — developed the ad standards in the first place: to reduce the complexity and transaction costs associated with interactive advertising, and allow the medium to scale. “The Internet is taking an important step in its evolution as an ad medium by moving in this direction of standard ad sizes,” Richy Glassberg, then the Vice President and General Manager of Interactive Sales for Turner Broadcasting, said when the first IAB banner standards were introduced in 1996. “This will make it easier for agencies and advertisers to develop advertising and will further establish the Web as a viable mass medium.”

Endorsing those standards, Mike Donahue of the American Association of Advertising Agencies, said, “The proliferation of banners has created a massive problem for advertisers and their agencies, which sometimes have to create their ads in 50 or more sizes. These voluntary guidelines will greatly streamline the advertising production and placement process and contribute to the overall growth of Internet advertising.”
Supply vs. Demand

Mr. Tillinghast (who has built MSNBC.com into a national and global news powerhouse) is also wrong in attributing the “oversupply of space” to standardization. The disequilibrium in the supply and demand for advertising inventory has a more fundamental cause: technology itself. As I noted in my first presentation to the IAB Board of Directors, using research we conducted at the consulting firm Booz & Co. in the early 2000’s on behalf of the Association of National Advertisers and some media clients, it is now possible for a 14-year-old to create a global television network with the applications that come built into her laptop computer. That means that, for perhaps the first time in any industry, new product — in our case, content and advertising inventory — can be created and distributed seamlessly, without friction, and largely without marginal cost.

To prove the point, just look at another industry standard that’s helped a commodity proliferate in recent years: ICANN’s Web site naming conventions. Thanks to it (and that other contributing standard, Internet Protocol), there are now approximately 160 million Web sites in the world — some 1.2 million of which sell advertising.

This isn’t to deny that oversupply is a problem. It is. But short of a shutdown of the Internet itself — a ban against new domain names, an ICANN moratorium, or mass public revulsion against a medium that is now the world’s most popular — new supply will always be entering this marketplace.

Yet in the very notion of commoditization lies the salvation for interactive advertising. For as in all other commodity markets, the products can be shaped and modified in ways that add enormous value to them. Raw diamonds can be polished to perfection. Cotton balls can be woven into couture dresses. Pork bellies can be sauteed into haute cuisine.

And advertising inventory can be written, designed, and produced by immensely talented creative people into communications that drive the fortunes of great companies.

Direct Response Culture

Can be… But for the most part isn’t. Given the remarkable creative potential in interactivity, online media should present a cornucopia of fabulous, affecting and effective advertising. Take the great concepting and design that went into Doyle Dane’s “Think Small” ad for Volkswagen, spoon in the equivalently brilliant production simplicity of Chiat/Day’s “Human Cartoons” campaign for the Nynex Yellow Pages, throw in the remarkable production values that for two generations characterized BBDO’s work for Pepsi, sprinkle over it the captivating long copy Ogilvy wrote for Rolls-Royce — and then add the potential for mass viral video distribution, one-to-one validation, social media engagement, blog conversation, customization on premium news and entertainment sites, and segmented reach through online networks. The marketing mind boggles.

So with all that potential, why is that so few people can name even two great, recent interactive advertising campaigns — so few people in our own industry? (For those tempted to respond, “Hey, wait a minute, what about ‘Subservient Chicken?’”, I feel compelled to point out that this breakthrough effort by Crispin Porter Bogusky for Burger King is five years old.)

Culprit no. 1, I believe, is the direct-marketing culture that is part of interactive advertising’s DNA. Lord knows, we should and do revere direct response advertising and most of what it’s bequeathed to the interactive industry. From the DR industry we’ve derived our attention to accountability — an obligation honored only in the breach through the history of mainstream media and agencies. From direct marketing we have learned that data and its management are central to everything we do. Many of the growth areas for interactive publishers, including lead generation and customer relationship management, are based on direct marketing innovations.

But direct marketers are almost defiantly disinterested in the aesthetics of communications — and the long-term impact aesthetics has on brand value and company activities. Notwithstanding such legendary direct marketing efforts as American Express’s — where every element of the brand is supported through all channels, from main media to direct — even direct mailers will say that creativity, designed to build and reinforce such well-established, long-term brand-uplifting effects as “likeability,” is not native to the direct response business. Attention to beauty is more the exception than the rule in a marketing-services segment that prizes today’s response to today’s offer over long-term brand lift.

This isn’t a criticism, but a reflection of the way the marketing mix is supposed to work, and has worked for decades. When I first visited the fabled Publisher’s Clearing House in Port Washington, Long Island 20 years ago, I was shocked at the contrast between their clinical understanding of the “what” and their utter detachment from the “why.” PCH’s 12 writers and four art directors were involved continuously in developing new mailing “involvement devices” — pre-Internet instigators of what we today call “consumer engagement” — and, through rigorous testing, could tell down to fractions of a percentage point the lift to gross revenues each would provide.

But how such devices as the “television tag” and the “Jaguar stamp” worked to influence consumers, and what the implications were for the magazines that used PCH to boost subscriptions — that the direct marketers could not say.

“Don’t Know Why”

”If you use a manila envelope, people respond more than they do to a white envelope, but we don’t know why,” Lee Epstein, president of Mailmen Inc., a Long Island company that inserts materials in direct-mail envelopes, told me at the time. ”The postage-paid stamp in the upper-right-hand corner - someone once made a mistake and tilted it. It increased response, but we don’t know why.”

Almost everyone in magazine publishing can relate a horror story about how direct marketing’s ingrained disdain for beauty and branding sundered a property — how a circulation department for an elegant fashion or furnishings periodical, intent on meeting a mailing response target, flooded low-income neighborhoods with cheap come-ons, driving the publication’s demographics downward and turning off the very advertisers the magazine was supposed to attract. “Most direct-mail letters, they said, don’t use good writing; don’t worry if you split an infinitive,” Frank H. Johnson, a direct mail pioneer who began his career at Time Inc. in the 1930’s, once told me. “And you’re never supposed to be funny.”

Bill Jayme, one of the greatest direct mail writers of the past century, agreed. ”The general attitude in direct mail is to talk down, assume people are stupid and repeat everything,” he told me nearly 20 years ago. The late Mr. Jayme was a rare exception. “I haven’t had any qualms about using a word like ‘peregrinations.’ If the context is right, the reader’ll understand and will feel flattered.”

But this notion that your consumer was part of a community of interest with the brand marketer, not a “target” to turn into a “conquest” at any cost, was and is rare in direct marketing. The late, great magazine journalist Clay Felker once related to me the struggles he, Harold Hayes, and others charged with reinventing Esquire magazine in the early 1960’s had persuading the publication’s proprietors to abandon the “damn it letter” — the long-time direct mail control missive that opened with those words and chortled over pinup girls. However damaging this legacy of Esquire’s earlier girlie magazine days was to the rebranding effort the newcomers were charged with spearheading, the publisher was reluctant to change it, because it brought in subscribers. Mr. Felker succeeded in his effort only when he retained Mr. Jayme, who wrote an intelligent letter that finally outperformed the debilitating “damn it letter.”

Why Creativity Matters

Agency founder David Ogilvy revered direct marketing, yet also was the ad industry’s leading apostle of brand imagery. In his marvelous new biography of Ogilvy, The King of Madison Avenue, former Ogilvy & Mather Chairman and Chief Executive Kenneth Roman relates how, for years, Ogilvy (shown at left) struggled to reconcile these “two schools of advertising” that “were diametrically opposed to each other.”

By the time Ogilvy founded his agency in 1948, he had succeeded. As committed as he was to the principle that advertising must sell, Ogilvy also understood the risks posed by a fixation on immediacy and accountability — primarily the brand marketer’s loss of public esteem and the ability it bestowed to maintain pricing power. In remarks made 50 years ago that seem eerily prescient today, Ogilvy told the author Martin Mayer:

“Most brands that need help today were given sleazy, bargain-basement brand images in the thirties, when money was scarce and it was a great help to seem cheap. They’ve suffered from it. When I first came into this country Packard was one of the great quality cars. Then they began getting tough, going after the middle-priced market. What do you think they would give today to get back their old image?’

To marketers and others who complained that brand-image advertising “is unmeasurable, it’s all a lot of airy-fairy nonsense,” Ogilvy had a simple response: “Well, is it?”

Ogilvy was one of the last century’s great salesmen. In his book, Mr. Roman spins wonderful yarns about the hours “DO” spent as an apprentice chef in the kitchen of the Majestic Hotel, one of Paris’s best restaurants, and the years he spent peddling Aga cookers, a premium stove, door to door across Scotland, in the 1930’s. What Ogilvy learned from these experiences is that successful selling is at root about one thing: faith — your ability to provide to others a dream with infinite horizens. The exquisitely designed plate of cuisine classique — ah yes, you are living the good life! This remarkable stove — why, your home will be akin to the finest restaurant!

Creating Faith

In taking this lesson to his agency, Ogilvy also understood that creating faith in customers was not a distant exercise; he would not succeed solely by delivering creatively constructed messages across pages or airwaves to a faceless mass of consumers. There was always a more immediate, more present customer: the clients themselves.

This is perhaps the most important reason advertising creativity matters. It inspires the marketer. It encourages the sales force. It provides them, and all the other constituencies in and around the company and the brand, the faith that they will be able to sell the product in to the retailer, close the sales on the dealer’s lot, win new commissions, and better their own lives. Great advertising is their rallying cry, the flag they march under. The mouseclick must be matched by their heartbeat.

This is the reason no major new advertising campaign ever debuts de novo on broadcast network television, but rather is premiered at the franchisees’ convention, the national dealers’ conference, and the annual sales meeting. The campaign, the ads, are the gospels — the stories that excite and unite the tribes, that spur them to go out and do battle for a higher cause. Done right, an advertising campaign transforms the advertiser itself into an army of true believers. For how can you expect to win new converts, if you, yourself, are not a true believer?

The notion that a narrative could be used to drive people toward higher goals is as old as philosophy itself. As Socrates says in concluding the myth of the cave in Plato’s Republic: “Without having seen the Form of Good and having fixed his eye upon it, one will not be able to act wisely, either in public affairs or in private life.”

Jerry Della Femina described this cultural power — this corporate cultural power — of great advertising more profanely but no less profoundly in his famous book, From Those Wonderful Folks Who Brought You Pearl Harbor. “The client is standing up there waiting at the train station for the New Haven to take him into New York and he’s dying to be stopped by his buddies,” Mr. Della Femina wrote in his classic memoir. “He is dying for them to compliment him on his new campaign.”

“‘Boy, you’ve got a hell of an ad there.’ That’s what the client wants to hear.”

Missing Reputational Currency

The gap between the mouseclick and the heartbeat is nowhere more evident than in many of our digital advertising agencies. To illustrate, allow me to pose an admittedly trick question: What’s the biggest difference between a traditional creative agency and a new-age digital agency?

Answer: Traditional creative agencies are named after human beings. Digital agencies are named after inanimate objects or nonsense words.

Check out the winners of the 2008 IAB MIXX Awards — the industry’s premier showcase for creativity and effectiveness. Winner, Best in Show: Tequila. Winner, Brand Positioning: Digitas. Winner, In-Game Advertising: Jogo. Silver Award, Brand Positioning: Blockdot. Silver Award, Digital Video: Tribal DDB.

Look, we love these agencie. And to be fair to them, the depersonalization of advertising predated the digital revolution. But it’s a particular tragedy in the digital arena, because it has robbed the industry of its most potent fuel: reputation capital.

From their inception in the 19th Century, advertising agencies, like law and accounting firms, represented their origins and duties as client service businesses in their names. “N. W. Ayer & Son,” “Batten, Barton, Durstine & Osborne,” “Young & Rubicam” — all implied a sense of personal responsibility on the part of founders to their customers.

Not incidentally, they also conveyed a sense of opportunity to their ambitious employees. Advertising was always a low-barrier-to-entry business. If success depended solely on the ability “to render service and make money,” as Lord & Thomas leader Albert Lasker once put it, why, anyone could try it!

And they did — at no time more prolifically than during the Creative Revolution of the 1960’s. The concurrent post-war Baby Boom, suburbanization of America, and spread of network television put a special premium on quality advertising content; more products and more communications channels meant more ads, and more need to cut through the growing clutter to engage audiences. Writers and graphic designers determined that they, too, might have value — perhaps more value than account handlers. So writers like David Ogilvy and Bill Bernbach (shown right) and graphic designers like George Lois took the plunge and founded agencies.

Cultural recognition and financial growth rapidly came their way, emboldening other creatives to believe they could trade the personal reputations they had won using little more than their pens and palettes into successful agencies. The “swinging agencies,” Jerry Della Femina called them: Wells, Rich, Greene; Delehanty, Kurnit & Geller; Smith/Greenland; Daniel & Charles. Many were spawned directly from the creative department of Doyle Dane Bernbach. Between January and July 1969 alone, more than 100 ad shops were launched, most in New York, all of them gassed up with reputational capital.

Agency Road Map

The calculation was clear and direct: Get known as the creator of great, successful campaigns, and you, too, could start your own business, bring some clients along, and make an awful lot of money on little capital investment. And to this day, that remains the road map for success in the agency business. If you want to understand why the Cannes Lions International Advertising Festival has become the largest destination gathering of advertising professionals in the world — “more than 10,000 delegates from 85 countries… inspired by the 28,000 pieces of work on display,” as its Web site says — that’s all you need to know.

And that’s the reason to mourn, and perhaps war against, the depersonalization of the agency business. Sure, there are several valid explanations for it: to scale, advertising had to globalize and industrialize; and increasingly, one could maintain that successful client service is about the team, not the individual.

But if, as I have argued, great advertising not only stimulates consumers but galvanizes that team to build and sustain strong companies and brands, then we must recognize that its creation requires both collaboration and individual achievement. Advertising, in this regard, is no different from any other form of communication that seeks after broad, material, cultural impact — no different than film, or theatre, or journalism: If stardom is not rewarded, there is little incentive toward superiority. Worse, perhaps, if mediocrity is not penalized, there is little deterrence to decline.

There’s good news lurking beneath the surface. The rising category of digital advertising award winners — agencies making the hearts beat and the mice click — are the great creative agencies of the past two decades: Hill Holliday, Goodby Silverstein, McKinney, BBDO, TBWA Chiat/Day — companies whose names (or, well, acronyms) have meaning.

But we must unleash and laud by name the next generation of stars. Interactive advertising, I suspect, will only take its place in the cathedrals of cultural significance when we start to recognize and reward the creative individuals who make greatness happen.

Creative Technologists Arise

Those individuals carry at least one non-traditional title. To the advertising creative partnership that traditionally has teamed a copywriter and an art director, a third member must be added: the creative technologist.

The creative technologist is only now beginning to gain public recognition. Google the term and you’ll find hundreds of help wanted ads at agencies and publishers. But I’d never seen the phrase in the mainstream media until two weeks ago, when New York Magazine writer Emily Nussbaum published an exciting piece about the transformation of uptown rival The New York Times. “There is something exhilarating about watching web innovation finally explode at The Times,” she wrote. “… Everyone seems to have a job title like ‘creative technologist,’ giving the entire floor a mad-scientist air.”

Yet these are not mad scientists; they are essential partners in modern media, central to the craft of communication today. Creative technologists, says Mark Avnet, professor and head of a training program for them at Virginia Commonwealth University’s VCU Brandcenter, are “fluent and confident in using media technologies appropriately in the service of branding, advertising, marketing and persuasion.” VCU’s program — the world’s first at an accredited university, launched only six months ago — aims to train “leaders and members in ‘new’ creative teams, as interactive designers, creative directors, producers, directors of interactive media, members of account teams, as entrepreneurs and in emerging creative technology positions in forward-thinking agencies.”

Among contemporary agency leaders, the only one who speaks publicly about the indispensability of creative technologists is RG/A Chairman, CEO and Global Chief Creative Officer Bob Greenberg.

“There are critical creative needs that didn’t exist in the old advertising,” says Mr. Greenberg, who counts 130 technologists in his New York office. “Advertising is no longer just about the display ad or the TV commercial or the banner; it’s about creating meaningful tools and architecting user experiences. Our technology group, they can keep up to speed technically with the top people at HP or IBM. But they also understand how to work with others to create an application that will lead to community.”

Mr. Greenberg stresses that calling the creative technologist the “third member” of the creative team is, at best, metaphorical. There are several new skill sets creative agencies today must possess to attract, engage, and influence consumers — Flash video development, software design, information architecture, animation, CRM, iPhone app design, and ActionScript development among them — and no one individual will have expertise in all. The point is that the men and women with these skills must be treated as full partners in the campaign development process, contributors to “the Big Idea,” not as executional afterthoughts buried in the basement.

The Bigger Idea

This evolution of the creative partnership is as transformational a moment as was the invention of the copywriter-art director partnership exactly 60 years ago, at fledgling shop Doyle Dane Bernbach. Influenced by his former colleague, the legendary graphic designer Paul Rand, agency founder Bill Bernbach realized that effective persuasion required the full integration of words and images — and of their expert creators.

“Up until that time in agencies, the art director was a layout man,” George Lois, a Bernbach acolyte, once told me. “He may have been a very, very good layout man. He may have been a gifted layout man. But he was not a thinker. He was a layout man.” So secondary were they that they worked in different rooms, often on different floors, than the copywriters, who referred to these layout men as “wrists.”

“Before Bernbach, there were slogans, great lines, and they got laid out,” Mr. Lois said. “Well, Bernbach didn’t believe in catchy lines as much as he believed in attacking the heart and soul. So Bernbach gave the art director power.”

Significantly, this occurred at the dawn of the last information revolution — the introduction of broadcast network television, which also occurred exactly 60 years ago. The advent of the interactive revolution now heralds the empowerment of the creative technologist. Clearly, their ascent adds complexity to advertising agency and media management: Communications leaders will have to learn how to foster collaboration among larger and more diverse teams — in addition to motivating their individual stars, as I’ve suggested is necessary. But agencies and media have no choice but to add them to their capability mix.

“You can’t have an art director and a writer who go off for two weeks in a room and try to come up with a Big Idea that is rendered into a print ad or billboard, and the interactive accompaniment to that is just matched luggage,” Mr. Greenberg says. “You have to get to a bigger idea. You now may need eight people around the table.”

All That Remains

If you’ve had the good fortune to spend time in RG/A’s Bauhaus-style headquarters on Manhattan’s West Side, or a block away in the offices of New York Times Digital, or across the country at Google’s campus in Mountainview, or a little bit north of that, in the AKQA agency’s HQ across from AT&T Park in San Francisco, or across the country again, in the converted tobacco factory that houses the transforming McKinney agency in Durham, NC, you’ll be struck immediately by all this creative ferment — this reinvention of the way we communicate the world and persuade consumers.

Yet that is not the conversation that dominates our ecosystem today.

Instead, we’re engaged in a war over “pork bellies.” We’re publicly complaining, on stages and in pages, about commoditization. We talk incessantly about “remnant inventory.”

I’ve got to tell you, every time I hear an interactive publishing executive use the term “remnant,” I want to take a scissors, shred the dress, and stab the salesman. How dare you, I think, deprecate your property in that way? You’re trying to sell couture at Bergdorf’s, yet you’re using the language of Seventh Avenue garmentos to describe it?

With all due respect to the IAB’s members — who are, after all, my bosses — and to the media agencies (who are among our most important customers), I’d like to suggest that our seller-buyer-driven culture is devaluing not just the pricing but the potency of our medium. We must stop acting as if we’re selling schmattes, and start acting like the makers of magic that the best of us are — and always have been.

As I’ve written and any economist would affirm, supply-demand disequilibrium, exacerbated by a recession-driven flight of marketing budgets from above-the-line functions to promotional availabilities, is the root cause of today’s pricing pressures in media. Yes, it’s bad, and yes, it will get worse before it gets better. But it’s no reason for discussions of commoditization to dominate our business — now, or at any time. Remnants may clothe you when you are needy, but they will not make you feel grand.

Interactive Advertising Grows

And that, fundamentally, is the business we are in — of providing men and women the information they need and they entertainment they want to think and feel and act in different and better ways. And therein lies the power of our medium, its unprecedented power, for it allows people to find the information, to talk back to the news, to create and share the entertainment, to shape the event. And that is the force of advertising in this medium — not the fact that in some places, at some times, it can be purchased in the bargain basement.

That is the reason why, while other media platforms contract, interactive advertising is still growing: especially during a recession, not all time and space are created equal.

That’s especially true within our industry. Some interactive publishing companies are growing bigger and better than others. There are many reasons for their relative success: the addition of sophisticated yield management capabilities, the creation of customer-facing services businesses, the development of consumer insights capabilities, the training of a more consultative sales force, the highlighting and fulfilling of creative opportunities for clients, the implementation of sophisticated market- and product-segmentation strategies, the undeniable attractiveness of quality content to men and women hungering for information and entertainment.

But these publishers’ achievements and their bright prospects all derive from their willingness to ask — and answer with actions — one fundamental question: How do I add value to my consumers’ experiences and my customers’ businesses?

In our obsession with immediacy and accountability, we have overlooked the more subtle yet more powerful ways that companies, brands, and fortunes are built through time. Our IAB Annual Leadership Meeting, Ecosystem 2.0, themed “Brands Battle Back,” will launch this needed conversation.

For digital publishers and agencies, here’s what I hope this conversation leads you to do:

  1. Motivate greatness among your best creative people, for their work inspires consumers and customers alike.
  2. Collaborate — creative agencies and publishers — with each other and within yourselves to develop outstanding advertising and communications products.
  3. Assemble writers, designers, and technologists into teams that can engage the intellect and emotions of audiences and individuals across all channels, toward the goal of creating enduring brands.
  4. Prove to your customers that causing the heart to beat quick is at least as important as making the mouse click.

Finally, and politely, let’s ask the sellers and the planners, the publishers and the senior buyers, to continue their price negotiations — but quietly, in the back room, away from the customers crowding our front counters and our home pages.

Let’s return to a time when advertising and media conversation was owned by the creatives, the editors, and the impresarios — when it was dominated by debates about the craft of persuasion, about what moves people. After all, isn’t that the reason we’re in this business?