Tackling the Digital Disruption

Article by Paul Fisher. First published in B&T Thursday, March 15, 2012

For 17 years the interactive advertising industry has been the new kid on the block. Going through boom, bust and now boom again, coping with enormous and erratic growth spurts and powerful forces, it has played adolescent teenager under the watchful eye of its stern parents, print and free TV.

As we enter 2012, it is clear this relationship is set to change in Australia, with interactive online advertising leapfrogging print and free TV by volume and by share. Don't scoff - it's already happened in the UK, the Netherlands and Denmark.

Driving this unstoppable juggernaut is changing consumer behaviour, which in turn is changing ad industry behaviour. As a result we are seeing ad revenue migrating from other media, but especially from print and free TV to online. In 2012 online advertising expenditure will surpass $3bn and 20% share of advertising and we predict this will grow to $4bn and 25% by 2014, and then $5bn and 30% share by 2016.

Naturally as online advertising heads into number one position in the grand old media industry, it faces new responsibilities. It's time to grow up, leave behind adolescence, and address some key issues.

The first issue is around consumer privacy, information and choice. Technology has enabled media and technology companies and consumers to interact in unprecedented ways and levels of detail. This must be allowed to continue to both fuel the benefits for consumers and business alike - it is a symbiotic relationship. Consumers get the content and services they want, when and where they want them, most often for free. In return they knowingly and willingly share anonymous, or with their consent more personal, information, which means they benefit from personally tailored advertising messages with a degree of control they have never experienced in any other media.

Last year saw Australia's first and most significant foray into understanding and managing this interchange with the formation of the Australian Digital Advertising Alliance (ADAA) and the publication of the first industry best practice guideline for online behavioural advertising (OBA) and a consumer website www.youronlinechoices.com.au.

This cross industry initiative continued the long history of media industry self regulation and importantly was driven by the advertiser side of the advertising ecosystem, championed by the Australian Association of National Advertisers.

Essentially, ADAA signatories to the guideline have committed to providing consumers with notice about third party data collection practices and then offer them the choice to turn off OBA on signatories' websites and networks with a simple single click.

Global initiatives such as adopting an OBA icon on or around OBA advertisements online are also being reviewed to further highlight consumers' awareness of OBA practices, and to enable them to make informed choices about the collection and use of their anonymous browsing behaviour for the purposes of serving to them more relevant online advertising.

The second issue that needs to be addressed is measurement. This is and has been a constant priority for all media and we're delighted that much of the previous confusion around standards, and metrics and browsers versus human beings online, has been addressed since the endorsement by IAB Australia of Nielsen online ratings hybrid online audience measurement system.

The next steps are to move the debate onto measuring advertising effectiveness, both online and cross media (online and TV, and online with print), and of course online from mobile devices. Both the IAB Measurement Council and the IAB Mobile Advertising Council (MAC) are working with the Media Federation of Australia (MFA) to define the measurement needs of media buyers, advertisers and media owners and we'll see some developments in 2012.

Finally, there is what is being described as a "renaissance" in online display advertising with an astounding $15bn spent globally each year on online display advertising. Historically, the online display spaces the creative industry has worked with to showcase their clients' brands have been small, and mostly unexciting. This is changing rapidly.

Last year IAB US's Rising Stars competition unearthed an array of new, large format, rich media and video enabled display formats and some of these are now available here in Australia. These bold, large, entertaining and engaging formats, coupled with advancing online behavioural and other relevancy filtering technologies is providing brands with TV and magazine-like opportunities. Consumers love them, creatives love them and advertisers are embracing the new formats for brand, social and direct response campaigns. It's a win all around.

So, there are some interesting milestones ahead as a new advertising order is established in Australia. Expect to see a period in which the industry adds the infrastructure, metrics, and self-regulatory rigour to its adolescent brashness, innovation and speed of change.

Related Information: