At IAB Annual Meeting, Talk of New Money for Digital Ads

Carlsbad, CA– The still-shaky state of the online ad economy didn’t dampen the mood at the IAB’s Annual Leadership Meeting Ecosystem 2.0 conference yesterday. Speakers touted the increasing changes wrought by technology on the relationship between brands and consumers, and pointed to ongoing investor support for the space.

During his keynote speech before 650 industry executives at the La Costa Resort & Spa, Frank Cooper, PepsiCo Americas chief consumer engagement officer, suggested that while the advertising industry is in the middle of a brand marketing crisis, digital will be the pathway to better interactions with consumers.

“Consumers’ lives, needs and values have evolved but brand marketing has essentially stayed the same,” he explained. “The current brand marketing model is failing in its basic mission of adding value to people’s lives.”

Part of the problem, Cooper added, was that far too many brands end up talking down to their target audience, “instead of pulling people onto the pedestal with us by using technology to facilitate experiences.”

PepsiCo has put its marketing dollars where its mouth is, inviting consumers to help create the latest version of Mountain Dew and publicly dropping its perennial slot on the Super Bowl telecast in favor of a digital strategy.

Cooper noted the Super Bowl decision created some consternation, especially among PepsiCo bottlers, but added, “We wanted to build deeper relationships with consumers who love our brands.” He said the key to that in 2010 will be the Pepsi Refresh project, which he described as “an online forum where consumers submit ideas on how they want to move the world forward, with the audience voting on the best ideas and PepsiCo agreeing to commit $20 million in funding to make those ideas a reality.”

Cooper also urged attendees to embrace technology revolutions. “You need to have an insurgent mindset, even if you’re at the top of your game,” he said.

Others at the conference took comfort from the uninterrupted flow of investment money to the interactive advertising/media space, even as the overall economy continues to struggle to regain its momentum.

Tolman Geffs, co-president of The Jordan, Edmiston Group, cited numerous deals, including Google’s acquisition of the mobile ad firm AdMob last year, as proof that M&A activity in digital media and marketing is beginning to recover after plunging from its highs of a few years ago. “I can tell you that in early 2010 the market is very, very busy with a ton of conversations going on,” he added.

Geffs predicted growth in the audience selling market – served by data vendors such as BlueKai – will outpace growth in the site selling market. “Brand advertising is not dead, but it is changing dramatically and one of the ways that it is changing is in the increased use of targeting,” he said.

He also predicted more investment interest, noting “There are lots of new acquirers entering the space so we don’t need Google and Microsoft to buy everything.”

The IAB and American Association of Advertising Agencies (4As) used the summit to announce the finalization of version 3.0 of the 4A’s/IAB Standard Terms & Conditions. The two organizations touted this first update to the voluntary standard advertising contract since 2002 as a major step that will streamline the negotiations between buyers and sellers of interactive ads. The document addresses data usage, third party ad serving, editorial adjacencies, and late creative, among other matters.

The IAB also opened a comment period for its Networks & Exchanges Quality Assurance Guidelines, which outline a framework for buying and selling ads in networks and exchanges. The IAB noted these new guidelines will allow for transparency of inventory sources, publisher relationships, content levels and ad placement details.

“Networks and ad exchanges have transformed how advertisers can deliver targeted messaging to consumers and these guidelines further secure the promise of this extraordinary marketing resource,” said David Moore, IAB chairman and founder of 24/7 Real Media.

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