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Phase II of Marketing & Media Ecosystem 2010

LEADING MEDIA COMPANIES EXPAND ROLES AND CAPABILITIES,

MEETING MARKETERS' EVER-GROWING DIGITAL NEEDS

Media Companies Taking on Creative Development, Behavioral Targeting, Consumer Insights, and ROI Capabilities

Lack of Standardized Measurement, Education Seen as Key Barriers to Online Growth

Phase II of Marketing & Media Ecosystem 2010 Presented at the IAB Annual Meeting

Phoenix, Arizona (February 25, 2008)- The Interactive Advertising Bureau (IAB) today announced that new research encompassing more than 100 of its members demonstrates that the strategies, investments and capabilities required to succeed in digital media have shifted dramatically. Media companies are responding by changing at an unprecedented pace, according to the Marketing & Media Ecosystem 2010 study. The study's most recent results highlight the expanded services and changing operations of media companies, as they respond to the expectations of marketers who are focused more on the potential and of digital media. Media companies are developing creative, offering behavioral targeting, generating consumer insights, and helping calculate ROI as they join marketers and agencies in re-tooling their agenda to drive growth and connect to the consumer in an increasingly complex media environment .

Marketing & Media Ecosystem 2010(MME 2010) identifies the priorities, capabilities and partnerships required across the marketer - agency - media value chain to optimize now and prepare for the future. The first cross-industry partnership of its kind, MME 2010 is a joint study between the IAB, ANA (Association of National Advertisers), AAAA (American Association of Advertising Agencies) and management consulting firm Booz Allen Hamilton. The media company research, representing the second phase of this multi-year study, was recently completed by the IAB and Booz Allen and was unveiled on February 25 at Ecosystem 2.0-Driving Growth in Digital Marketing, the IAB Annual Meeting now taking place in Phoenix, Arizona.

ANA members can access Phase 1 of the study here.

"As online advertising grows in importance, media companies are playing a much broader and more strategic role in the marketer's agenda," said Christopher Vollmer, Vice President at Booz Allen Hamilton. "Media companies are expanding well beyond traditional advertising sales roles into areas such as campaign development, creative services and consumer insight."

"Media companies are establishing closer relationships than ever before with marketers and are providing them with a suite of strategic communications solutions that are far beyond anything we've seen before," said Randall Rothenberg, President and CEO of the IAB. "At the same time, media executives recognize the critical role that advertising agencies play and will continue to play in the media landscape."

Based on media company responses, the report spotlighted five behaviors that shape the emerging agenda for digital leadership:

1. Invest in ongoing marketer education: Fully 87% of media companies find the need for their ad sales team to educate marketers and agencies "important" or "very important". As a result, 70% plan to increase their investment in education capabilities by 2010.

2. Provide consultative services to key clients: Almost all digital leaders already provide agency-like services to many of their marketer clients.

3. Focus on the metrics that matter most: Leaders understand what marketers want to measure-including reach, engagement, action, and ROI-and they are improving their ability to collect and analyze consumer data. Leaders are more likely to provide performance marketing services and lead generation.

4. Translate media value into marketer ROI: Leaders are more likely to have ROI metrics than other media companies. Most have the ability to tie media behavior to sales.

5. Know what drives consumer behavior: Digital leaders are developing the ability to incorporate consumer insights into marketer's predictive models at a faster pace than non-leaders.

Additionally, key themes emerged from Phase II of the Marketing & Media Ecosystem 2010 study:

1. Evolving digital media "DNA": Digital media is redefining the services offered by media companies. The majority of media companies surveyed currently offer contextual and behavioral targeting services, as well as some marketing capabilities. While 73% are focused on capturing growth from existing clients, a huge opportunity exists for the industry to generate online revenue from the top 50 national advertisers by expanding their existing marketing capabilities.The education and metrics imperative: Ninety-eight percent of media executives recognize that a lack of standardization in digital media metrics is inhibiting marketer spending today and are thus planning to expand their capabilities to educate clients by 2010. For marketers, media's insufficient ability to measure effectiveness was the most cited barrier to online spending (62%).

2. Managing digital complexity: The changing media landscape is making management of digital media inventory more crucial and more complex for media companies.

3. The ecosystem redefined: Media companies are responding to marketers' expectations to increase their direct partnerships with them by providing traditional agency services, including campaign development, audience targeting, and creative services. However, the majority of media executives continue to believe that the responsibility for creative functions, communications and media planning, still lie with the agency of record, with behavioral targeting being largely the role of media partners.

4. Value through consumer insights: Marketers indicate that the ability to deliver consumer insights such as behavioral patterns and needs will become increasingly important.

 

In 2007, a quantitative study of marketers was fielded by the ANA and presented at its Annual Conference. An additional study of agencies will be conducted by AAAA and presented later this year. A comprehensive report will be written based upon the results of the three phases of market research.

The Marketing Media & Ecosystem 2010 study is based on responses from over 100 media company executives as well as in-depth interviews with over seventy-five leading marketers, agencies, and media company senior executives (CMO, CEO and VP). Participants represented 73 unique companies representing traditional media, digital media, and hybrid organizations. The study was fielded by Guideline, Inc.

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