The IAB’s Make-or-Break Moment

After five years at the helm of the Interactive Advertising Bureau (IAB), Greg Stuart, president and CEO of the organization, announced this week he would step down from his post at the end of the year. As the organization looks for a new leader, now’s a good time to think about where the IAB has been and where it might go in the future.

When Stuart took the reins of the organization in late 2001 (initially as an interim chief), the IAB was in a shoddy state. Its disarray reflected the industry it represented. At the time, interactive advertising was in a rapid downward spiral. Annual online ad revenues were plunging. The sector was beginning to look just a little bit doomed. The IAB’s membership consisted of some 35 companies.

By last year, according to the IAB’s own figures (together with PricewaterhouseCoopers), revenues had nearly doubled to $12.5 billion. And as the industry picked up, the IAB replenished its ranks. Currently, the organization now numbers some 250 member companies.

Stuart has gotten a great deal of credit for the IAB’s growth, and certainly its membership roster reflects the blue-chip names in the business: Google, Yahoo, MSN, Disney, Fox, CBS, AOL, “The New York Times,” “The Wall Street Journal,” Knight Ridder, Forbes, and Time Inc. are just a few randomly selected names. Pulling together a roster such as this is no mean feat. Stuart certainly gets much of the credit for convincing these companies to join.

Now, I don’t mean to be a wet blanket, but it’s important to note here that as grows the industry, so grows the industry association. It’s also important to acknowledge much of this growth was inevitable, given the shift in media consumption patterns, the subsequent shift in media spend, and an overall recovery in the online, media, and advertising sectors.

Guidelines, Guidelines, and More Guidelines

The IAB has conducted a fair amount of economic and ad effectiveness research, but if Greg Stuart has a lasting legacy, it will be as the IAB’s Guidelines Guy. Since he took the helm, the organization has charged one task force after another with cranking out guidelines to standardize and establish best practices in interactive advertising.

One of the first announcements out of the IAB after Stuart’s entrance was the introduction of e-mail guidelines and an ethics pledge for marketers bowed under the increasing burden of spam.

Yet two years later, in 2004, with all eyes (industry and otherwise) focused on the FTC, Congress, and pending CAN-SPAM legislation, the IAB was one of the few, if not the only, major industry organization that failed to join in lobbying efforts or even to bother to officially comment on proposed legislation. At the time, Stuart said the failure to comment stemmed from a board decision to avoid public policy issues due to limited resources. But he expressed hope the IAB would soon include public policy in its initiatives. “It’s certainly something trade organizations ordinarily do,” Stuart told ClickZ.

By then, the IAB’s resources were far less limited than before. Membership had begun to swell. By 2003, the body had staff, office space, research and events programs, and a $5.8 million “acceleration program” interest-free loan from 11 member companies. Over the past few years, the guidelines have kept on coming. There are now IAB guidelines for the Universal Ad Package, ad impressions, rich media, in-stream video ads, and pop-ups (issued just as pop-ups were popping out, although they’re still used on the IAB’s own Web site).

Stuart seemed to be tiring of all these standards. He gave the body’s broadband video guidelines a backhanded introduction in May of this year. “If you can’t sleep at night,” he told an audience at an IAB event, “you should read them, and you will sleep instantly.”

Perhaps Stuart’s decision to move on is underpinned by guideline ennui. More guidelines are on the way. As evidenced by the two-year gestation period for the second version of the body’s rich media guidelines, waits can be long — if not interminable.

In March of last year, the IAB launched an initiative to address cookie deletion and other cookie-related issues. This as policy matters heated up on the federal level as Congress became concerned over privacy issues — often confusing legitimate marketing tactics with truly malicious ones.

Yet it’s over a year later and nothing’s emerged.

This week, the newly formed Web Analytics Association (WAA) took up the charge and announced plans to launch an educational initiative.

Just prior to its cookie initiative, the IAB announced it planned to launch a policy drive. Valuable as standards may be, this move was to many the most welcome initiative to date. The IAB board mandated putting infrastructure in place to educate and to lobby around legislation affecting online advertising.

Alas, that initiative too has come to naught, other than a help-wanted ad for a policy director languishing on the IAB Web site.

Granted, pulling these efforts together isn’t easy. But the nonprofit IAB meanwhile has dedicated a lot of money and resources to events and other “profit-center” (the organization’s term, from another job ad) activities. In 2004, about half the IAB’s expenses were ploughed into events, putting it close to $500,000 in the red for that year (a 2005 tax return isn’t yet available).

Yes, research and guidelines are important. So too are trade shows, road shows, and award shows. But what really matters is the prospect of the courts and of Washington, even less well-versed in the intricacies of the medium, undertaking regulatory measures that could kill the goose laying so many golden eggs: e-mail, cookies, and Net neutrality, just for starters.

Other industry trade organizations have girded for action. Major players like Google are hiring full-time lobbyists.

That’s why I want to see the IAB’s next leader, with the full support of its board, tackle these issues head on. I want the IAB to forge stronger alliances with other bodies: the American Association of Advertising Agencies (AAAA), the Online Publishers Association (OPA), the WAA, and the Email Sender and Provider Coalition (ESPC), to name a few — to demonstrate more strength and unity.

With a new infusion of members, cash, and caché, the IAB has never been stronger than it is today. It has a duty to maintain that strength by committing to maintaining the industry it’s built on.

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