La Próxima Revolución

DigitalRandall Rothenberg

President & CEO, IAB !

IAB Colombia Annual Congress Bogota, Colombia

April 2, 2014

About the IAB

2

‹Nº›

Commerce

Social

Video

Search

Display

Data

MobileAudio

IAB: Digital Advertising’s Largest & Most Active Trade Body

The Industry’s Biggest Tent

4

600+ leading media companies responsible for selling 86% of US online advertising.

Global + Local: 43 National IABs

5

Europe Europe Regional

Africa Asia Pacific

South America

North America

• IAB Austria • IAB Belgium • IAB Bulgaria • IAB Croatia

(INAMA) • IAB Denmark

(FDIM) • IAB Finland

• IAB France • IAB Germany

(BVDW) • IAB Greece • IAB Hungary • IAB Ireland • IAB Italy

• IAB Macedonia • IAB

Netherlands • Norway (INMA) • IAB Poland • IAB Romania • IAB Russia

• IAB Serbia • IAB Slovakia • IAB Spain • IAB Sweden • IAB Switzerland • IAB Turkey • IAB UK

• IAB Europe !

• IAB South Africa

• IAB Australia • IAB China

(IIACC) • IAB New

Zealand • IAB

Singapore • IAB Vietnam

• IAB Argentina

• IAB Brazil • IAB Chile • IAB

Colombia • IAB Ecuador • IAB Peru • IAB Uruguay

• IAB (United States)

• IAB Puerto Rico

• IAB Canada • IAB Mexico

25 1 1 5 7 4

‹Nº›

Our Mission is Growth

Removing FrictionPromoting Digital Making It Safe

IAB Invented the Modern Digital Ad Industry

7

IAB UK launched first international

IAB

First XMOS Study

IAB Universal Ad Package Updated

IAB MIXX Awards Celebrate Digital

Creativity

Video Ad Creative Guidelines Published

Digital Video Measurement

Guidelines ReleasedFirst Industry

Ts and Cs

IAB Long Tail Alliance Formed

Video Ad Serving Template Released

First Internet Ad Revenue

Report

First Universal Ad Standard Portfolio

Released

IAB Defines the “Impression”

First IAB Privacy Guidelines Issued

Impression Measurement

Standards Released

IAB Launches Training Program

Public Policy Office Opened

IAB Publishes Mobile Buyers

Guide

Privacy Matters, first Ever Consumer Privacy

Campaign Released

Ad Ops Council releases QAG

Creation of MMCOE (Mobile Marketing Center

of Excellence

MRAID, or “Mobile Rich

Media Ad Interface

Definitions” is released

3MS initiative launch

First Digital Media Sales Certificant

Creation of Ad

Technology Council

Quarterly Revenue Growth Trends, in Billions 1996–2012

1996 1997 1998 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

IAB Rising Stars

launch

IAB Oversees Digital Content

NewFronts

SafeFrame Release

‹Nº›

Digital’s Thought Leadership Center

Members Are LeadersIAB Committees and Councils are comprised of some of the brightest minds in their space, and help drive the industry forward by developing standards, guidelines, best practices, whitepapers, buyer’s guides, and other services

• Audio Committee • B2B Committee • Digital Video Committee • Games Committee • Interactive Television Committee • Local Committee • Mobile Advertising Committee • Networks and Exchanges Committee • Performance Committee • Social Media Committee • Tablet Committee

Committees• Ad Ops Council • Ad Technology Council • CFO Council • Data Council • Legal Affairs Council • Multicultural Council • Public Policy Council • Research Council • Sales Executive Council

Councils

9

The Digital Moment

10

Colombia: Enormous Digital Growth Potential

11 Sources: IAB Colombia Study, IAB Colombia, November 2013; Futoro Digital Colombia, Comscore, Aug 2013; Fuente: EGM 2 Ola 2013; Flurry Analytics, Jan 2012-Jan 2013, countries with at least 500,00 active devices Jan 2012

• 25mm total unique internet users • 70% of the population connected to

the internet in past three months • 43% Colombian users are 15-24

years old vs. LatAm average 32% • 89% connected to the internet at

home • 68% recall seeing online advertising

and can name various formats • Colombians lag Latin America in

online time spent (17.2 hours average vs. 24.6 hours average)

Colombia: A Growing Mobile Powerhouse

12

• Fourth largest mobile market in LatAm: 24mm unique subs

• Will move into “fast grower” mobile broadband segment by late 2015

• Highest 3G coverage in LatAm – 96%

• The fastest growing global smartphone market: devices grew 278% in 2013

• 91% of mobile users access internet via their phones

Sources: IAB Colombia Study, IAB Colombia, November 2013; Futoro Digital Colombia, Comscore, Aug 2013; Fuente: EGM 2 Ola 2013; GSMA, Mobile Economy Latin America 2013

Digital Is Now the U.S.’s Second Largest Ad Medium

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Broadcast Television *

Internet

Cable Television **

Magazines ***

Newspaper

Radio

Out of Home

Video Games

Cinema $700.0

$800.0

$7,500.0

$16,100.0

$19,400.0

$22,800.0

$32,500.0

$36,600.0

$39,600.0

Advertising spend† of key media in 2012 (in Billions)

† The total U.S. advertising market includes other segments not charted here.

* Broadcast Television includes Network, Syndicated and Spot television advertising revenue.

** Cable Television includes National Cable Networks and Local Cable television advertising revenue.

*** Magazine includes Consumer and Trade magazines.

Source: IAB Internet Advertising Revenue Report 2012, produced by PWC

‹Nº›MMA & IAB Overview

Digital Advertising: Growing 13x Faster Than U.S. Economy

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CAGR*: 19.7%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$36,570.0

$31,735.0

$26,041.0

$22,661.0$23,448.0

$21,206.0

$16,879.0

$12,542.0

$9,626.0

$7,267.0

• Digital advertising grew 15.2% in 2012

• 2012 annual revenues increased on a year-over-year percentage and dollar basis.

• The 19.7% CAGR* has far outpaced U.S. real GDP growth of 1.5%** over the same 10-year period.

Source: IAB Internet Advertising Revenue Report 2012, produced by PWC

‹Nº›MMA & IAB Overview

Internet Ad Growth Outpaced All Media Over Past 8 Years

15

$0

$12,500

$25,000

$37,500

$50,000

2005 2006 2007 2008 2009 2010 2011 2012

Broadcast Television * Internet Cable Television **Newspaper Radio

Advertising revenue market share by media, 2005-2012 ($ billions)

• Two forms of media have positive compound annual growth rates (CAGR) between 2005 through 2011: Cable Television at 4.6% and Internet at 16.5%.

• In every year since 2005, the annual growth rates of Internet advertising have exceeded those of other advertising media.

• Internet advertising has experienced double-digit annual growth in every year except 2009; no other media has experienced double-digit growth in any year.

*Broadcast Television includes Network, Syndicated and Spot television advertising revenue. **Cable Television includes National Cable Networks and Local Cable television advertising revenue.

Source: IAB Internet Advertising Revenue Report 2012, produced by PWC

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Mobile: + 111%

-40%

0%

40%

80%

120%

$ - 0

$ 4,500

$ 9,000

$ 13,500

$ 18,000

Search Lead Generation Mobile Ad Banners / Display Ads Rich Media

2012 Revenue2012 vs. 2011 % Growth

-15%-25%

13%

29%

111%

-27%

11%

-6%

15%

$1,113.0$845.0

$7,721.0

$2,330.0$3,370.0

$156.0$1,689.0$2,430.0

$16,916.0

15%

-6%

11%

-27%

111%

29%

13%

-25%-15%

IAB 2014

Industry Challenges

17

IAB 201418

Fraudulent Traffic Has Reached Crisis Proportions

• At least 22% of digital display advertising traffic worldwide is driven by bots*

• Estimated $6-10 billion is lost to advertising fraud alone each year.* • Bot Traffic on pace to waste $9.5 Billion in 2013 on advertising***

*Source: Adometry, October 20, 2010, Internet Retailer, January 26, 20133 **Source: InfoSecurity, February 15, 2012

***Solve Media’s quarterly Bot Traffic Market Advisory update, Q2 2013 (based on 230M human verifications across 6500 publishers)

13% of US homes and up to

9% of workplaces are

infected with bots**

IAB 2014

Consistent methodology across media

Real-time measures for optimization

Ability to understand competitive landscape

Integration with proprietary platforms/process

Ability to use as currency for buying/selling

Availability in key international markets 23

47

59

69

69

73

10

20

21

28

37

32Very critical Extremely critical Total

13%

41%

32%

Total

20%

49.3%20162013

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Source: 2013 ANA/Nielsen Integrated Multi-Screen Survey

Multi-Screen Buys Expected to Grow

What is the single biggest issue

regarding multi-screen advertising that keeps

you up at night? Measurement!

41%

38%

27%

13%

Base: Total = 212; Client-Side=86; Agencies=55; Media Sellers=67

How critical is each of these to you for integrated multi-screen measurement?

13%

Brands Require – But Media Lack – a Common Currency

IAB 2014

0%

18%

35%

53%

70%

2005 2006 2007 2008 2009 2010 2011 2012 1H 2013

13%

5% 4% 4% 4% 5% 4% 2% 2%

41%47%

51%57% 59%

62%65% 66% 65%

46% 48% 45%39% 37%

33% 31% 32% 33%

CPM Performance Hybrid

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Persistent Pressure on Publisher Revenues

Source: 1st Half 2013 IAB/PWC Digital Ad Revenue Report!*Source: AOL / Ad Exchanger 2013!CPM Data Courtesy of SQAD

CPM Buys Declining

41%

13%

Programmatic Solutions Further Reduce Ad Revenue*

13%

95

97

100

102

104

January April July October

97.655196.844196.749

95.69895.444595.4083

96.498596.429196.562797.158797.136

96.220196.211196.294896.470696.568796.553696.5883Composite 2010 Composite 2011Composite 2012 Composite 2013

CPMs Flat to Declining

IAB 201421

Digital Still Not Considered a Brand-Building Medium

Retail

Financial Services

Telecom

Auto

Computing Products

Leisure Travel

Consumer Packaged Goods

Pharma & Healthcare

Media

Entertainment 4%

5%

6%

7%

9%

8%

12%

11%

13%

20%

4%

5%

5%

6%

8%

9%

11%

12%

13%

22%

20112012

Internet ad revenues by major industry category*, 2011 vs. 2012

• Retail advertisers, despite an overall decline, continue to represent the largest category of internet ad spending, accounting for 20% of revenues in 2012, down from the 22% reported in FY 2011.

• Automotive advertisers accounted for 12% of revenues in 2012, up from the 11% reported in FY 2011.

• Consumer Packaged Goods represented 7% in 2012, up from the 6% reported in FY 2011.

• Pharma/Healthcare accounted for 6% of revenue in 2012, up from the 5% reported in FY 2011.

Source: IAB Internet Advertising Revenue Report 2012, produced by PWC

IAB 201422

Mobile Monetization Is a Disaster

Finding Solutions

23

IAB 2014

Core Commitment #1

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Building a Trustworthy

Digital Advertising Supply Chain

IAB 2014

A War on Fraud & Piracy

25

Protecting Privacy Through Self-Regulation

26

Digital Advertising Alliance

IAB in Washington• Advertising self-regulation • Online behavioral • Children’s privacy • Blogger disclosure rules • IP piracy • Political advertising • Mobile apps and ads • Global self-regulatory harmonization

and data standards

IAB 2014

Core Commitment #2

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Making Measurement

Make

Sense

Viewability: The New Currency for Online Advertising

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Buyers and Sellers establishing new currency for digital media based on traditional media criteria

1. Assess Impact of Viewable Impression2. Establish Digital GRP

3. Create Ad Classification System4. Define Standards-Setting Structure

Traditional Media GRPs Digital Media ImpressionsBrand Metrics

(Reach and Frequency)

IAB 2014

Core Commitment #3

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Publisher Transformation

Rationalizing Programmatic Buying…

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!!● Confusion over

terminology ● Limited transparency ● Lots of middle men ● Sellers’ strategic

challenges (sales, bus model, yields)

● Lack of clear technical standards & guidelines

Significant growth Uncertainty in market

…Through Education & Standards

31

IAB Market Education

and Clarity

IAB Solving

Operational Issues

• Establish market clarity & education on programmatic !

• Thought-leadership research study to provide an effective roadmap to “programmatic” capabilities !

• Identifying and addressing mobile programmatic issues

• Digital automation – standardize common datasets for IOs, media plans & invoices !

• Open RTB - Supports development of OpenRTB specs !

• QA Guidelines reflect programmatic disclosures

IAB Digital Media Sales Certification

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A client wants to serve different creative to consumers based on their exposure to the digital advertising campaign. Which of the following solutions should be recommended?!A) Connected TVB) Keyword TargetingC) Sequential MessagingD) Demographic Targeting

Sample question

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Digital Content NewFronts

IAB 2014

Core Commitment #4

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Building Brands Digitally

Cross Screen

Rich Media

New Standard Ad Unit Portfolio

Display Mobile

70+% New

Digital Video

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Source: IAB Rising Stars Research with IPG MediaLab, Feb. 2012

Rising  Stars  vs  Standard  IAB  Units  Universal  Interac4on  Time*

0.00

4.00

8.00

12.00

16.00

Rising  Stars Standard

7.8854

15.845

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200% More Interaction for Rising Stars

*Universal Interaction Time is defined as the average length of a time that a user’s mouse enters frame of ad and is active (not parked) for 0.5 seconds or longer and ends when the mouse leaves the ad frame, or 60 seconds, whichever happens first.

Users Spend 2x More Time With Rising Stars Ads

37

IAB 2014

Core Commitment #5

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Moving Mobile Mainstream

Mobile Marketing Center of Excellence

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Creative: Mobile Rising Stars: Driving Adoption Mobile Ad Creators’ Guide Tablet Ad Sizes

Promote Multi-Screen Advertising IAB Mobile Center Agenda

Measurement:Mobile and Cross-Media Audience Measurement Town Hall Mobile Engagement Metrics Definitions

Public Policy/ Regulation:Self-Regulatory Program Lobbying DC Fly-In Event

Operations: Mobile Discrepancies Industry Round Table Future of the Cookie/Identifiers Driving MRAID Adoption

Education and EvangelizationMobile Cross-Media Ad Effectiveness Research

Mobile Video Agency Day

Mobile and Industry Verticals (fast food, financial, CPT, auto, etc.)

Local Search White Paper

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IAB International Membership Program

• Participate in our 20 Committees and Councils!!

• Help establish critical technical standards and operating best practices!!

• Bring IAB Sales Certification training and accreditation to your markets!!

• Partner on market-making research and thought-leadership publishing!!

• Market your successes through the new, curated IAB Global Website and App!!

• Assert leadership through an enlarged IAB International Steering Committee!!

• Build your events businesses with programming and support from the IAB Events team

These Benefits Are Free for !IABs & Your

Most Involved Members

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1. Adopt the IAB Viewability StandardFive First Steps for You

2. Adopt IAB Rising Stars ad formats

3. Protect consumers with privacy self-regulation

4. Take the IAB Digital Certification Exam

5. Join & create best practices with IAB International

Gracias!

Randall@iab.net