The IAB Annual Leadership Meeting 2016 in Review

Relevance will be paramount to hitting the next $50 billion

This year’s IAB Annual Leadership Meeting in Palm Desert, California, almost fell victim to extraordinary meteorological conditions. A significant number of attendants couldn’t make it to California because of a heavy blizzard that hit the U.S. East Coast just a day before the conference, causing most flights from New York to be canceled. Nevertheless, the folks at IAB managed to pull off an incredible event filled with presentations, breakout sessions, sponsored events and high-level meetings. Our industry’s leaders got together in a unique setting to determine the future of online marketing.

Programmatic was omnipresent. Be it programmatic video, programmatic TV, programmatic direct or programmatic guaranteed, it almost seemed as if people didn’t want to talk about anything else. In particular, ad blockers, branding strategies and mobile (who would have thought?) were largely stressed.

Regardless of which topic was discussed, it all boils down to one primary theme we need to focus on more as an industry—relevance. In order to make mobile work, achieve high ROI and steer clear of ad blockers, marketers must tailor ads to the right user. Reaching the best audience and showing highly relevant ads is what differentiates successful from unsuccessful marketing—more than that, it’s the best recipe to prevent the ongoing growth of ad blockers.

The town hall meeting, “The Next Phase of Programmatic: What’s Now and Next,” was this year’s highlight of the show. While programmatic TV—the kick off topic of this breakout session—is still doubted by many to really pick up this year, it almost seemed like everyone was just waiting for the two magic words to be said: “header bidding.”

IAB-text

Yes, as a reaction to Google’s First Look offering, everyone in the industry is trying to convert the so-called waterfall ad server into one unified auction by having programmatic exchanges compete against direct deals to maximize publisher yield. In essence, this is another step towards the death of the direct deal.

It honestly felt as though the whole room got lit up when the topic was brought up. Strangely enough, all 100+ programmatic experts present seemed to recoil at the thought of saying “Google” out loud—as if the name of the Big G itself were a curse akin to Voldemort, the player that “must not be named”—undoubtedly, the industry is in a quandary. While everyone wants the same thing, for all channels competing against each other in real-time, we cannot seem to agree just what this aspirational seamless solution will be. As it stands, publishers have three choices:

  1. Work with Google exclusively (as they discriminate against other exchanges for their solution);
  2. Overcome this temporary dilemma by submitting to great efforts required of header bidding implementation (it entails vast technical complexities and risks);
  3. Wait for a sustainable, non-discriminating solution—one which makes ad serving a truly unified auction.

The conversation was concluded with an intense debate about programmatic private marketplaces. The fact the publishers have gained more control through private auctions and preferred deals has led many to shift more premium placements into programmatic—after all, granting exclusive access to trusted and reliable buyers is what publishers are striving for, and that’s why programmatic direct is prone to grow further. No one seems to disagree. Let’s not forget that, at the end of the day, private marketplaces paved the way for programmatic to become the industry’s single biggest growth engine.

In sum, what can be concluded from the conversations at this event is that programmatic direct led publishers to trust programmatic inventory and prioritize it as much as possible, which resulted in publishers asking for a unified auction across the entire ad server. Google launched First Look, but in doing so decided to exclude any other exchange. As a result, header bidding became a hot topic, although it’s merely a far-from-perfect reaction to Google’s dominance in the industry.

No matter how we’re heading to a truly unified auction, it will happen. And then other doors—whether programmatic TV or significant advancements to ad relevance—will be opened.