The industry’s real challenge: The productivity frontier (Column)

IAB Canada chair outlines the association's top 3 priorities

The global advertising business is on the cusp of fundamental change. This is not about programmatic or cord-cutting or time-shifting or the economics of GRPs and CPMs. It is not about digital vs television. It is not about any one thing versus any one other thing.

It is about a basic principle of market competition. Every industry has a productivity frontier where cost and value are optimally balanced. The productivity frontier is where businesses succeed, so companies in all industries will persistently pursue those tools and technologies that get them there.

This is what is driving the wave of technology-driven automation in advertising today, and why it will impact every part of the $600 billion global advertising market, not just digital. With programmatic advertising commanding nearly $40 billion globally, more than 90% of the change is yet to come.

It’s against this back drop that industry associations in media and advertising are grappling with how their historically siloed models add value through this wave of automation.

In the early days of digital advertising, the IAB was instrumental in helping unleash the industries potential by championing industry standards that created ease of trade.

The impact of standardized ad formats and measurement, stakeholder education as well as industry standard terms and conditions all created a canvas on which marketers, agencies, and publishers have built a thriving medium. That medium now commands the majority of advertising investment.

In the same way, there are obstacles today which need an industry unifying voice to tackle; and our ability to reach the potential of the efficiency frontier will be a function of our success in addressing these issues. The three most fundamental challenges today are:

1. Integrity of the digital supply chain: tackling non-human traffic and brand-safety
2. Advocacy: helping shape the public policy against which the industry will have to comply
3. Making Measurement Make Sense: connecting disparate media measurement currencies across platforms.
JoeStrolz
Solving these three challenges is the mission of the IAB. They will define the value we add to our membership (marketers, agencies, publishers, technology providers alike), they will serve as our pivot to add value to other industry associations with whom we will increasingly partner to drive the productivity frontier, and they will represent the keys to the growth and evolution of advertising overall.

Joe Strolz is IAB Canada Chair and general manager of AOL Canada

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