A word (or two) from Einstein

Posted by Lucy Halliday On September 01, 2010 Media Releases

Article by Paul Fisher. First published in AdNews, September, 2010

As the self aggrandising and mutual back-slapping for surpassing the $2 billion annual online advertising expenditure mark fades, the question that now everybody should be asking – and trying to answer – is “what does the industry need to grow to $3 billion and beyond?”

Much of the commentary, including my own, about the $3b target has focused on the timeframe to reach it. But we should actually be addressing the infrastructure needs of this industry or we won’t get there. Or worse – we’ll get there but with the same issues and challenges we face today, only 50 percent more complex and more frustrating!

So what infrastructure do we need to address to ensure we prevent the online advertising industry in Australia from becoming the CBD traffic system nightmare of the media industry?!

Front and centre has to be standardised online measurement. In my view it’s not only audience measurement that we need to look at, but also advertising effectiveness measurement. Once we standardise online audience measurement and provide people-based metrics as well as familiar and reputable reach and frequency metrics and user interface tools, we will also be able to focus on the unique attributes of this medium to produce advertising effectiveness data.

If online measurement is our first horizon then the second is the integration – there’s that word again – of online audience measurement data with other media measurement data. This so-called ‘three screens’ measurement which will cover TV, online and mobile; print masthead/cover title, online and mobile and other cross-media measurement, will provide buyers with valuable insights into optimum media channel planning and scheduling. And an industry developed compliance program including audit will ensure agreed standards are set and met, and the credibility of online audience measurement data is beyond reproach.

The trading mechanics of buying online display media schedules also need to change. The US IAB calls this “supply chain management” and it requires a significant overhaul – a job that is underway in the US market. Essentially we need to simplify the access to multiple sellers by buyers; to create standardised (automated?) RFPs, proposals, purchase orders or insertion orders; to simplify (again) the entering of those IOs into the inventory management systems of the sellers; as well as simplifying the marrying of the creative with the bookings, the tracking and optimisation of the campaign and the reporting; and ultimately the automation of the invoice generation. It is a massive and indeed ambitious task and we’ll be watching the US experience closely because if we develop systems, processes, software and APIs to standardise the ever increasing volume and complexity of transactions, then the buying and selling of online display advertising will be truly scalable.

Of course reaching $3 billion online spend will not just be about software or technology alone. People will drive this growth and efficiencies. So we need more of them and we need them to be better trained (or retrained) in the industry and we need sustainable salary levels.

Training and development is a hotly debated issue in the online industry and I think the general consensus is that current training is inadequate, uncoordinated (between industry, state and federal governments and commercial providers) and not keeping pace with industry needs. We need structured, outcome-driven training curricula developed for schools, colleges, TAFEs and universities. We need government assistance to establish, create and grow the number of training and education providers in the private sector and we need coordination between the industry bodies to identify needs and provide attractive and affordable solutions.

The final checkpoint on my “list” is self regulation, along with industry standards, guidelines, codes and best practices to protect the interests of consumers and to create a safe, equitable and commercially sustainable marketplace for advertisers, buyers and sellers. Privacy will take centre stage in this debate and industry bodies, consumer groups, individual buyers and sellers and service providers will all be required to contribute to the framework in which we all choose to operate.

After all, if technology is to provide the “information super highway” then industry needs to agree to the road rules so that we all drive on the same side of the road, stop at red traffic lights, and indicate when turning!

As we all grapple with the enormity and complexity of these challenges, we should prepare ourselves for a period of greater complexity and difficulty before we reach calmer waters. With the continuing growth in our industry of the number of buyers, sellers, service providers, technology solutions, the impending arrival of DSPs (demand side platforms), the growth in the volume of reporting required and amount of data available, and the ever increasing array of mobile devices, content providers and aggregators, the planning, buying and reporting of online advertising is going to get more complex before it gets simpler.

In the words of Albert Einstein, a man who knew a thing or two about simplifying complexity, “everything should be made as simple as possible, but not simpler”.

Lucy Halliday