Enemy of the State: The IAB


The unending criticism from ad industry leadership of ad exchanges, networks and their technology is an abomination.

Cut to a scene from the movie, “Network” with Yahoo!’s Carol Bartz poised in the window instead of Peter Finch.

    Carol: “I’m as mad as hell, and I’m not going to take this anymore!”

Today – the latest salvo: Chairwoman of IAB‘s Board of Directors, Wenda Millard, goes on the offensive against technologists in an Ad Age piece by Michael Learmonth.

“Ms. Millard also criticized two high-profile appointments at two of the internet’s biggest advertising companies: Microsoft and Yahoo. Microsoft appointed former Yahoo search technologist Qi Lu to head its online services group; Silicon Valley tech exec Carol Bartz is the new CEO of Yahoo, the largest publisher on the web.

“We shouldn’t let marketing decisions be made by a technologist who has never met a CMO,” she said. (Still, it could be posited that the biggest innovation in online marketing has been paid search, invented by technologists.) “

This is an amazing quote on many levels. Think of the strides made in the executive suite by women. Bartz is an example as is Millard, who shows no mercy. Even writer Learmonth winces as he adds the parenthetical phrase at the end.

Millard has made some serious coin as a founder at DoubleClick and Yahoo! exec as we recall. Guess those days are in the past: Forget the technologist no-nothings… and oh, by the way, I’m excited about MSLO‘s partnership with Yieldex and I like being a board member of Contextweb.

In Ad Age, Millard reveals a shared mentality within the old guard of the ad industry and, consequently, the IAB – that technology is bad for business. The reason it’s bad? First, it threatens the inefficient livelihood to which they are accustomed. More importantly, they don’t own the technology.

As we all know, selling, these days, isn’t about a marketer merely talking about her brand safe site to a prospective media buyer and how great it is to be on said site. Her site’s efficiency can now be quantified through technology. Horrors.

The reality is that technology helps – not hurts – and makes the process with which the old guard has been familiar the past 50 years more efficient for all parties. Of course, some of the old guard are going to lose their jobs and their power, so now they run scared when they should be leading the charge to a brave, new advertising world.

The constant, lightning barrage of negative comments made by key members of the online advertising community are unfair, unwarranted and point to an archaic mindset that drags the advertising industry in the wrong direction.

Randall Rothenberg recently compared ad networks to “outlet malls” in a BusinessWeek written by Rob Hof who made ad networks sound like a Madoff-inspired Ponzi scheme.

Hey Rob and Randy – ad networks are the opposite of Ponzi’s core competency – they are middlemen between real buyers and sellers of online media through the use of technology. And, ad exchanges are the next step of this online advertising evolution/revolution as they provide more transparency and, consequently greater efficiency for all parties involved – a future that includes networks as super traders on the exchange.

How can Rothenberg, the leader of an industry council that includes ad networks and exchanges, treat some of his membership so poorly? (Note: The IAB is fortunate to receive the sponsorship dollars that it does from ad networks and exchanges.)

The big name ad agencies and publishers of the IAB who beat their chests – and who Rothenberg obviously favors – need to be told to take their medicine and accept technology, ad networks and exchanges as partners not pariahs.

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  1. “We shouldn’t let marketing decisions be made by a technologist who has never met a CMO.”

    Should we also not let technology decisions be influenced by marketing people? Because *every* online advertising solution is a result of a series of technology decisions, hopefully integrated with good marketing sense.

    Strong commentary, AdExchanger. I’m glad someone is standing up to these ridiculously divisive comments.

    BidPlace SB

  2. Ponzi scheme? Nothing like that was mentioned in my BusinessWeek article, whose conclusion was that ad networks are in fact evolving into what could constitute the next generation of media companies. I don’t have a problem with ad networks personally–and at least specifically in his outlet mall analogy, I don’t think Rothenberg did either. Both were created to serve real needs. It’s just that the poor economy is accelerating trends that will have impacts on both publishers and networks, which some of them will see as positive and others will view as negative. Speaking for myself, I wasn’t making a value judgment here on ad networks. I was just noting that things are changing faster than most people realize.

  3. Rob, your response is welcome and appreciated. To be clear, I never explicitly said that you called networks a ponzi scheme – I said that I thought you made it sound like one. Perhaps I was a bit too thin-skinned. But, I believe the opinions of ad networks and exchanges remain under-represented which is likely the function of the balance they must silently strike between two different customers – publishers and advertisers. As for the outlet mall comment, outlet malls do not add value – many ad networks and exchanges do with their technology and services. From here, Rothenberg and the IAB doesn’t get it. (and now I will digress.) I see certain ad networks/exchanges/platforms going down a slippery slope and decrying the large number of ad networks to ingratiate themselves with potential or current clients who struggle with their ad network and exchange strategy (see David Moore, chairman of WPP’s 24/7 Real Media in AdAge today who “worries” about ad networks who will do “irrational things to gain market share” – or Yahoo! Joanne Bradford’s comment on the IAB blog today – Feb. 24 – “What doesn’t matter? The majority of the ad networks, according to Joanne.”). The point isn’t the number of ad networks.. what’s more important to drive home is that ad networks, exchanges and technology are here to stay and are providing an important function that will continue to grow, evolve and benefit all sides of the advertising world and, ultimately, the consumer who will receive more targeted and relevant advertising.

  4. Thanks for the response, Joe. Interestingly, a number of ad networks said they liked the story because they felt in fact it highlighted their ascendance. (And I’d contend that outlet malls add a lot of value that went uncaptured before, so I don’t see that as an inaccurate or negative analogy for many ad networks.) But I agree that many publishers, agencies, and even ad networks themselves are still in denial about the implications of that ascendance. Ad networks are here to stay, though they too will have to evolve into something rather different from what most of them are today, no?

    • Thanks again, Rob. WIth all due respect, I think ad nets are going to tell you they approved … don’t you think they want a BW article?… also, that’s not what I heard in feedback about your article. Hey I’m glad you wrote it – feel better, now? 🙂 – we’re talking about interesting issues here.

      And, I absolutely agree with you about ad networks evolving into something different which is a part of the point of AdExchanger.com – they’ll evolve into traders on the ad exchange. I see them using their expertise in the buy and sell side as well as their understanding of technology to take advantage of the next evolution of advertising – the exchange model.

      This model is in its infancy right now. It’s going to move beyond remnant-only in the future, and a lot more remnant will become premium. Ultimately, the exchange brings transparency and efficiency by providing insight via technology to advertising and moves away from the black box of the network model. There’s nothing wrong with the black box in my opinion. It’s just an evolutionary step to the open transactional model of the exchange.

      To a degree, I understand the knee jerk reaction of the IAB, OPA, agencies and certain large publishers who feel like they’re losing control . Of course, none of their online businesses meaningfully existed 5 years ago so their crying seems a little weak to me, too – they now have skin in the game due to technology.

      I argue, as do a few others, that the exchange levels the playing field and gives everyone control. Yield optimization companies, targeting technology are all examples of first steps in the tools of insight of the exchange (some may call it a platform.. it’s an exchange, they just don’t like the connotation right now.). Seems to me you might agree with some of this?

  5. Yeah, I don’t think we’re disagreeing much on the reality of what’s happening.