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January 18, 2008
Jim Spanfeller, IAB’s Outgoing Chairman

Outgoing chairman of the Board of the IAB, Jim Spanfeller, Forbes.com President and CEO

On the eve of stepping down as Chairman of the Board of the IAB, Jim Spanfeller, Forbes.com president and CEO, sat with IAB marketing communications director Marla Nitke to share his thoughts on the enormous changes in the interactive advertising industry, and give marketers, agencies and publishers his highlights on how  to engage consumers in the digital age. Jim will continue to serve on the Board and Wenda Harris Millard, President, Media Martha Stuart Living, Omnimedia has been elected the new Board Chair.

Marla Nitke (MN):  You’ve been Chairman of the IAB during one of the most exciting times in interactive media—it was as if all it once, the entire world “looked out the window” and saw that everything had changed.  What stands out most to you from this period?  

Jim Spanfeller (JS):  Obviously one of the biggest changes is the size of the revenues in the interactive space and the size of the user base—the growth has been extraordinary. That is perhaps the major change.  I would say the other is the attention that interactive is getting by elected officials. The web has matured from a new medium into an established medium and a critical piece of communications programs.

MN:  What are some of the most significant contributions the IAB has made to interactive advertising that you are most proud of?

JS:  First I would say our lobbying efforts in Washington, D.C. were a major initiative. I’m very encouraged by the speed with which we’ve managed to have an impact—though we are still in the embryonic stages. Next I would say that the ongoing adherence, development and promotion of common metrics and definitions around web advertising was one of my critical mandates. The IAB has been unbelievably instrumental in its ability to provide a more compelling and easy platform in which to operate. And no less important are the metrics of audience measurement, accreditation and overall transparency.

I would also add that people go online to get content —defined broadly as information, entertainment and services. Without it, there would be no audience to speak of. We have begun to celebrate the best practices here, and we need to focus more attention around the core benefits of web use.

All of these  are very important, not so much for advertiser to publisher relationships but for how the web is looked at against other competing media.

MN: From a web publisher perspective, what is your outlook for 2008?

JS: It will be a good year. I think it’s going to be a tougher year than we’ve come to expect, given where the economy is. You can argue that because of the accountability that online advertising offers, the overall amount of dollars in our slice of the advertising pie will still increase. When we review the numbers, there is still a disconnect between the amount of time people actually spend online and what is actually spent. We really need to start to close that gap. At the same time you have an increase in usage on the web so I think it will still be a good year for us.

MN: What are some of the biggest areas of growth from an ad dollars perspective? 

JS: The writer’s strike could be a watershed event for the web because there could be fragmented use of television as a result. Therefore we could see ad dollars dwindle to TV. If the TV upfront is a bust this year because of the writers strike, it could be positive for online advertising. I also think we’ll see more aggressive investment by CPG and financial services.

MN: What is the “next big thing” in interactive advertising that marketers should be aware of?

JS: There is so much that we’ve only scratched the service on. Targeting—it’s been a media mantra forever, but the idea of subdividing your message is a key area of growth for us. To do this effectively though there will have to be a re-evaluation of the agency model as it exists today.
The traditional agency business model is set up to offer high production value on fewer creative executions which is why it will be difficult to go from 1 to 400 executions—as online advertising allows. One way to fix this could be a change in agency fees, which will be a hard pill to swallow.

MN: What are the most important milestones the industry has reached with regard to audience measurement? What’s next?

JS:  I would never say I know the next way forward.  The general direction needs to be more transparency and a better understanding of the use of the web and individual websites and its use as it relates to other media.  We must have a much tighter difference between internal log files and other numbers.  We can go around all the issues about why the differences exist, and there is some truth on both sides but we need to find clarity, truth and then agreement which starts by defining the terms.  Let’s define the unique and then how we measure the unique. It’s not easy but not incredibly difficult, either.  There needs to be an opening of mindsets. Everyone is protecting their turf and we will come out of this stronger if we take the right steps to get clarity.  It would be very shortsighted if the lack of commitment and the lack of effort results in the industry taking a different path.

MN: What is the best way for agencies, marketers and publishers to collaborate more effectively to the benefit of the consumer?

JS: The web is clearly the most effective advertising mechanism ever and we’ve only scratched the surface of the type of marketing communications programs that can be enacted. I personally feel there is going to have to continue to be a very real commitment to levels of privacy and control around personal information.  This is where publishers, networks, portals and advertisers need to come together and reach a consensus on what those should be and then promote that consensus as the real alternative to regulation. It is incumbent upon web publishers to make that happen. We understand the end user best. There are times when some bad actors stepped over the line and we have to be clear and not allow ourselves to step over it.

MN: What is the single most important thing a marketer can do to reach consumers more effectively in the digital age?

JS:  Focusing on accountability that is directly related to the activity you are trying to elicit from the consumer.  All too often for all sorts of good reasons the metrics that have been used in media planning have been proxy metrics. Not exactly against the activity but I get nervous when there is too much focus on the time spent metric. We have much better metrics than that to utilize online. We can actually measure effectiveness of a campaign in a way that you can’t elsewhere—and that’s what marketers should be focusing on.

MN:  The interactive world has changed dramatically since you took the helm of Forbes.com.  Much has changed.  What has remained the same?  

JS:  More has remained the same then people give credit for. The question of targeting by behavior, by demographic, or by context and which is better. One could argue for each but at the end of the day it is the ideal that you can get to a prospective buyer of your product in an environment where they are self directed to be thinking about it. That’s why online advertising is so effective.  Now you can take all the targeting of direct mail and apply sight, sound and motion. On one hand you still want to have emotion about your communication and be as targeted as you possibly can, but now we can combine the two which is how the world has changed. Impressions and reach however continue to be important metrics which I believe we’ll continue to utilize.

MN:  Though you’re stepping down as Chairman, you will continue to be an integral member of the Board. What are some of the areas you hope to focus on in your continued participation with the IAB?

JS:  We have only just begun in D.C. and we’ve got lots of work to do in balancing the focus there on issues of regulation. Make the metrics easier—this is critical to our industry.  We must make it easier to buy plan and account for interactive media.  As an industry/ecosystem we need to work with agencies and marketers to make it less onerous, more transparent and even more efficient.  The IAB has just begun to get that going.  Our work will help everyone as all advertising becomes digital.