NEW YORK (AdAge.com) -- The Interactive Advertising Bureau is pegging its members' future growth on the likes of Procter & Gamble, L'Oreal, Kraft and Pepsi. The problem? Most online media companies don't know how to sell to them.
Those advertisers represent the brands that are most focused on brand-building and yet spend the least on the internet, according to a study conducted by Bain & Co. and the IAB. (Bain used percentage of spending on TV and magazines as a proxy for brand-building focus.) The idea is that while direct response has been thriving, both before and during the recession, brand advertising on the web has not, and it represents the greatest growth upside.
There is no one trick for getting those dollars; rather, the "action plan" Bain has developed for media companies is a series of mandates: improve display creative, agree on new brand-friendly metrics, refine targeting options and build industry-specialist sales and marketing teams. Oh, and make the buying process easier, too.
"You need to dramatically improve the product and the service offering with it," said John Frelinghuysen, media practice leader at Bain. "In 2007, you could go to publisher's site and it was a seller's market, $12 CPMs. But as big brands like Verizon and Charles Schwab, you name it, started understanding ad networks, it became more of a buyer's market. You weren't going got get $12 CPMs for vanilla inventory." CPM refers to the cost to the advertiser for reaching 1,000 viewers.
But, he added, "being able to attract brand dollars will be important to maintain premium pricing and value of contextual environments."
A big part of the problem is the dearth of effective and engaging online creative -- it's an industry that's beginning to reach maturity but with immature inventory that looks, in many cases, like it did years ago, Mr. Frelinghuysen said. It's full of small format, non-interactive 2D display ads on often-cluttered pages. And when marketers and agencies can't create those assets, the onus might fall on media companies.
"Agencies also have to think about how to take advantage of the medium," said Sherrill Mane, senior VP-industry services at the IAB. "If an agency isn't able to produce the creative that captivates and does more for brands, then media partners will."
Bain is also suggesting a new set of performance metrics that look more like what brands are used to in TV and other media, such as unduplicated reach and frequency, and proposes moving to new currency standards that involve engagement and brand-equity measures.
"The clear message coming out of interviews [with marketers] was 'we don't have any of the right metrics,'" Mr. Frelinghuysen said. "And the sellers are saying 'we have loads of metrics.' The people who are making these decisions of how much to allocate to online and how to think about that in relation to TV buys are people who've grown up with TV. ... They think online has digital-specialty metrics and they want metrics that speak a common language with the offline world."
Another recommendation? Sellers should realign their sales and marketing teams into industry-specific verticals that sell across multiple platforms, whether those be a combination of online video, TV, print, display or search. According to the survey, the most important qualities for marketers seeking an online ad partner are deep knowledge of the marketer and industry, effective targeting and a strong relationship with the marketer. And over the next three years, they plan to increase their spending on cross-media campaigns.
Interestingly, one reason for Bain's advice about integrated-selling approach came from marketers' own structures. It found that most use the same agency for online and offline creative and, across the board, marketers with that arrangement tended to be more satisfied with online capabilities than marketers who used separate online-offline agencies were.