In this video interview with Beet.TV, IAB CEO Randall Rothenberg says he sees an “explosive opportunity for television networks” – the growth in direct-to-consumer brands, many of them wholly digital – which need to gain consumer awareness outside of the hyper-competitive digital environment.

“It’s a very competitive marketplace, they need to break through,”Rothenberg says. “They’ve been very successful in their launch phases, marketing using social networks and some other things.

“But now, in order to be even more competitive, they need to move into main media. And so we’re seeing that over and over and over again. These companies, at a certain point in time (generally, we think it’s around three to five years into their life span), they’re looking at TV and radio, and they’re achieving a lot of success as a result.”

Last year, IAB worked with Dun & Bradstreet to produce research illustrating the trend.

The pair’s IAB 250 Direct Brands To Watch showed two things – first, the extent to which many new brands are foregoing intermediary retail going direct to consumers; second, the extent of competition within that set.

This is a different world because, unlike those which use retailers as intermediaries, brands which have first-party ecommerce data on their own consumers and prospects can take it in to advertising environments.

“That’s one of the interesting hurdles for the television industry in attracting direct brands … first-party relationships realized through first-party data are the core asset of the enterprise,” Rothenberg adds. “So, the challenge (also the opportunity, frankly) for television, for radio, for print is to:

1. “Show how they can help the direct brands scale by doing effective storytelling to very large audiences that they can also segment very, very finely.”
2. “Show how that ability to scale transcends whatever gaps they might have in the ability to gather data.”

Rothenberg’s observation was echoed by Video Advertising Bureau, whose own research last year identified 80 new brands – largely, digital and direct-to-consumer – which are now spending $2.6 billion in US TV ads.

To capitalize, IAB’s Rothenberg says television companies must more fully integrate their cable and digital assets, analytic abilities, strategic abilities, understanding of consumers and marketplaces and their expertise at storytelling.

This video is part of Beet.TV coverage of CES 2019.   The series is sponsored by NBCUniversal.  For more coverage, please visit this page. 

“There’s no question that lots of folks in the marketing and media world would like more alternatives to Google and Facebook, and AT&T by bringing a lot of extraordinary assets is the latest to present a credible assembly of important capabilities,” Rothenberg says.

One of the many invitation-only attendees of the Xandr Relevance Conference, The IAB chief was scheduled to moderate a panel discussion titled Consumers’ Choice: The DTC Revolution. It was based in part on the IAB’s “Rise Of The 21st Century Brand Economy” study.

“I think the elite attendance here at The Relevance Conference is an example of the interest, the hunger for an entity that can do what AT&T is promising to do,” Rothenberg says.

That’s based on what he considers to be AT&T’s “world class” assets encompassing entertainment, news, distribution, data, privacy and a “great embedded understanding of data security.”

Add them all together and “you’ve got a company that puts together a lot of remarkable capabilities that can be brought to bear on behalf of both consumers and businesses at the same time.”

Rothenberg has words of praise for AT&T management in the walkup to the Xandr unveil this week. “I think the fact that they’ve spent a good solid year planning and building before coming out with public announcements was incredibly smart.”

He expresses a special affinity for Xandr CEO Brian Lesser and CMO Kirk McDonald, both “colleagues” and in McDonald’s case a former IAB board member.

“I think everybody here wishes them well and expects that they will do extraordinarily well to help build not just a new media entity, but a new media communications and advertising industry in the United States and elsewhere,” Rothenberg says.

This video is part of a series leading up to, and covering the Xandr Relevance Conference in Santa Barbara. For more videos from the series, please visit this page. This Beet.TV program is sponsored by Xandr, a unit of AT&T.

“Companies can not afford to breach the trust of their consumers. That’s why we say brand safety is not optional,” IAB CEO Randall Rothenberg says in this interview with Beet.TV at the outset of the 2018 Digital Content NewFronts in Manhattan.

Rothenberg observes that “massive changes” have taken place in the way supply chains create value and the way value is extracted from those supply chains.

“It’s now possible for companies to be created, for brands to be created, out of nothing in an instant out of the supply chain functions that are available in the cloud,” he says.

The common theme is that newer companies are directly connected to their end consumers—connections that yield “enormous amounts” of first-party data that inform the rest of what the enterprise does.

“So what that means is, and here’s where you see a bit of the tension and the contradiction, you have to have direct relationships with your end consumers. It’s the only way your company can survive,” Rothenberg adds.

To be able to first initiate and then maintain those direct relationships, brands must establish trust. “And so that’s where you have the tension around data generally and big data specifically.”

This video is part of Beet.TV’s coverage of the Digital Content NewFronts 2018. The series a co-presentation of Beet.TV and the IAB. Please see additional videos from the series on this page.

It’s against this backdrop that Troy Young, Global President, Hearst Digital Media, views the ever-evolving role of the Interactive Advertising Bureau during a time of what he calls “incredible” change.

“I’m an advocate of the IAB because I think it plays an important role in the community, in education, our relationship with government,” Young says in this interview with Beet.TV at the organization’s Annual Leadership Meeting. Trying to figure out what comes next “is really complicated because marketing is so complicated right now.”

He refers to remarks by IAB President & CEO Randall Rothenberg about how “direct brands” have forged a new path, veering away from what Young describes as “industrialized communication through marketer to agency to publisher to consumer.” Now a new generation of companies is “empowered by the cloud and everything on demand to create direct relationships with consumers and sell products that people value,” he says.

“Everybody’s a content marketer right now and everybody needs close proximity to data. For a company like ours, how does that change us?”

Not that long ago, owning Hearst titles like Cosmopolitan, Country Living, ELLE and Esquire and housing them under the same roof as Rodale’s Bicycling, Men’s Health, Prevention, and Runner’s World would have meant more than adequate clout in the market. Now it’s more about speed, ease of use for advertisers and being as powerful as logging into the Facebook interface to buy ads.

“We have to react to that reality as a publisher. We define trends and understand consumers and create audiences. But we have to refactor our ad offering, essentially our market offering, to deal with the new realities,” Young says.

Hearst continues to enhance its programmatic capabilities while mapping user buyer behaviors and help brands produce content, which takes time and investment.

“We really have to listen to our customers and figure out how we can make selling a complex product much easier, because if you’re buying on Instagram it’s really easy today and I think that’s the reality we have to compete with.”

Buyers “still love our brands,” Young adds. “The buy-side loves our sophistication in creating content. “What we’re really focused on is how do we help marketers around the idea of actions. There’s no doubt that the entire market is becoming more performance oriented.”

It helps to “eat our own dog food” by creating content that “sells product and we make money doing that. We’re keenly aware of what leads to a transaction and it’s that insight that we create by doing it ourselves that we sell to marketers.”

This video is part of a series covering the IAB Annual Leadership Meeting. The series is sponsored by AppNexus. Please visit this page for more coverage.

Other industry semantics need to be updated as well, IAB President & CEO Randall Rothenberg says in this interview with Beet.TV. The Annual Leadership Meeting takes place Feb. 11-13 at the JW Marriott Desert Springs Resort & Spa, Palm Desert, CA.

“The time has come to get rid of this notion of sell-side and buy-side. It is deficient and it actually harms everybody because it makes it seem as if brands and their partner organizations are in kind of commander service relationships,” says Rothenberg.

IAB research shows that in the Direct Brand Economy, buyers and sellers come together in “vital integrated supply chain relationships that the brands cannot live without and nor obviously can publishers and others live without.” Thus buy-side, sell-side linguistics constitutes “awful language and ought to be banished for all time.”

The same research casts new light on the notion of “brand safety” in digital advertising environments, according to Rothenberg. Among other things, the research proves it has nothing to do with that “soft thing” called brand reputation but everything to do with unfettered access to first-party data.

Data fuels every function of the brand enterprise, from new-product development to figuring out what to charge individual customers. It’s all done increasingly in real time with decisions made on feedback loops.

“Companies need continuous access to first-party data, which means that it requires the complete trust of its consumer base. No trust equals no data equals no company,” Rothenberg says.

Therefore, brand safety isn’t optional. “It is essential to the future of a brand.”

The IAB has been a major proponent of the need for greater transparency on digital advertising platforms. Rothenberg says 2017 was probably the best year ever in terms of the progress that has been achieved. He points to comments by Marc Pritchard, Chief Brand Officer at Procter & Gamble, in an interview with Digiday in which Pritchard says the drive for a more transparent digital ecosystem is “80 percent complete.”

This video is part of a series covering the IAB Annual Leadership Meeting. The series is sponsored by AppNexus. Please visit this page for more coverage.

In this interview with Beet.TV, IAB President & CEO Randall Rothenberg explains why incumbent brands that have been dominant for more than a century need to be more directly connected with their customers and the role publishers play in that interaction. The Annual Leadership Meeting takes place Feb. 11-13 at the JW Marriott Desert Springs Resort & Spa, Palm Desert, CA.

“The center of gravity is changing,” says Rothenberg.

Brands have traditionally created value by erecting high barriers to entry for competitors and by relying on capital-intensive, owned-and-operated supply chains. Today’s direct brands create value with low barriers, are capital flexible and avail themselves of leased or rented supply chains.

Moreover, indirect brands extract value “not through this very cumbersome, indirect process of working through multiple third parties. Advertising agencies, publishers and retailers. But they extract value increasingly through the direct relationship between the company and the consumer,” says Rothenberg.

Direct-connections with consumers go far beyond being able to interact with them on, say, Twitter, according to Rothenberg. Direct connections generate reams of first-party data.

“And at a modest degree of scale, that first-party data fuels every other function of the enterprise. Product development, service development, customer value analysis, pricing, pricing mechanics. These are the things that modern companies need to compete.”

Not all legacy marketers are lagging on this competition curve. Rothenberg cites Nike as “a perfect example” with its projected 2X increase in direct-to-consumer revenue “in just the next three years.” Procter & Gamble is behind in this regard but is actively “orienting some of their strategy in this direction,” he adds.

Asked about the role of publishers in the modern marketing mix, Rothenberg points to the necessity to “step outside the impressions-based economy” and work to create direct relationships.

“Clearly, publishers always have and will continue to play a role in helping all brands acquire new customers. It’s just happening in many different ways than it used to happen before.”

One reason why popular brands like Madison Reed in hair coloring and Warby Parker in eyeglasses need content marketing to differentiate themselves is that they cannot simply blast out billions of ad impressions.

“Because these companies are drawing promiscuously from the same set of available supply chain resources, they are as subject to and potentially more subject to commoditization perceptions as offline companies,” Rothenberg says. “That makes it very difficult for them to differentiate on the basis of price or function. It needs to be on lifestyle, psychographics and demographics.”

This video is part of a series covering the IAB Annual Leadership Meeting. The series is sponsored by AppNexus. Please visit this page for more coverage.

“It’s a completely different way of thinking about marketing,” Randall Rothenberg says in this interview with Beet.TV at the Mobile World Congress 2017. “All marketers are kind of overwhelmed.”

With some two-thirds of U.S. consumers’ time spent on mobile devices, the biggest overall opportunity is “truly a one-to-one connection,” Rothenberg explains.

He offers an anecdotal observation about the extent of change in the mobile marketing world by noting that one of the MWC participants, Leonid Sudakov, used to be Chief Marketing Officer for the Mars pet care brands. “Now he’s President of Connected Solutions. That transition alone speaks volumes,” Rothenberg says.

In addition to figuring out the one-to-one consumer interface, brands and publishers are grappling with the question of how to integrate mobile media with preexisting media, according to Rothenberg. For example, how do Nielsen ratings for traditional television viewing mix with one-to-one metrics in the mobile environment?

On the publishing side, the classic advertising model continues to move to “some kind of post-advertising model.” Gone are the days of strictly thinking of advertising units as consisting of “boxes and time slots.”

For one thing, you just can’t fit enough of the boxes and time slots into the mobile space to make up for the volume of revenue that publishers enjoyed in the pre-mobile world. “The actual value that’s being created is through this one-to-one connection with the end user,” Rothenberg says.

Citing Turner Sports, CNN and Cartoon Network, Rothenberg notes that people will always want sports, news and entertainment content. These are “the kinds of things that publishing companies have specialized in since before the dawn of print,” he adds.

While the mobile train clearly has left the station, its potential has yet to be fully unleashed.

“You know you that you’ve got to start changing the wheels on the train but how you do it, what the new wheels are, what the time frame is to put the new wheels on is difficult to discern,” says Rothenberg.

This video was produced in Barcelona at the Mobile World Congress 2017. The series is sponsored by Turner. Please visit this page for additional segments from MWC.

That view – you may see the explosion in ad tech vendors as indicative of a boom. In fact, it may only be hurting the business.

“There is too much money – especially venture capital – looking for a home,” Rothenberg tells Beet.TV in this video interview. “It alights on too much minuscule segment innovation

“Rather than creating step-change advances in the way our industry moves forward … it tends to create more chaos.”

Case in point – the explosion in ad tech operators measuring the “viewability” of online ad inventory, following recently-agreed standards on that metric. You may think that is a good thing. But Rothenberg sees a down side.

“There are 17 accredited viewability vendors in the field and at least a dozen more in the pipeline to be accredited by the MRC,” he says. “This proliferation of vendors has been an utter obstacle, they’ve just confused everybody. It is frustrating that you have a vent cap industry that would finance so many companies of so little importance in the grand scheme of things”

Rothenberg should know. He spent 10 years reporting media and marketing for Advertising Age and six years as technology and Sunday magazine politics editor at The New York Times before becoming senior director of intellectual capital with the consultancy Booz Allen Hamilton.

It was in 2007 he was tapped by the IAB to lead its operations, bringing his independent industry eye to the online ad sector’s trade body, which defines ad standards.

Data from CBI Insights reveals $518 million in venture capital was poured into ad networks and exchanges between 2013 and 2014.

But with his experience, Rotheberg thinks the many, many VC-fuelled ad tech firms vying for customers are merely “features, not companies”.

“What venture capital has done is essentially financed the outsourcing of the R&D function,” he argues. “This makes a lot of sense – why should a company take on all the costs on its own… ?

“The problem is … each one of these little features … has to turn itself in to a company. That’s a lot of redundant expenditure on unnecessary functions. It creates a lot of inefficiency.”

This is segment is part of Beet.TV’s “Media Revolutionaries,” a 50-part series of interviews with key innovators and leaders in the media, technology and advertising industries, sponsored by Xaxis and Microsoft. Xaxis is a unit of WPP.

Rothenberg was interviewed for Beet.TV by David J. Moore, Chairman of Xaxis and President of WPP Digital. The interview took place at the New York offices of the IAB.

“The NewFronts are expanding to almost two full weeks,” says IAB president and CEO Randall Rothenberg, whose organization stages the event. “There is more interest than we can contain in the time that we have.

“We are going to see more smaller innovative companies in the NewFronts this year… in the MCN world and other worlds, showcasing new styles of content in addition to these big players.

“We’ll also begin to see more format innovation. The past couple of years, we’ve been seeing a lot of things that look like television. Now we are going to start seeing new forms and formats…

“It’s a great time to be a marketer who gets to take advantage of this affinity between consumers and the new world of video creativity.”

He says that there are disparities of 30-40 percent between tech companies.  He says the industry has to work together to make sure that disparity between companies is no more that 10 percent.

On the topic of ad fraud, he is optimistic that the problem will be solved.  But he notes that the “holes” in the supply chain need to be plugged.

Viewabilty was widely discussed  and reported from the recent IAB Annual Leadership.   Please find Beet.TV coverage of the event here.

He expects that the two weeks of digital video presentations, called the Digital Content NewFronts, will result in a range of business deals between content creators,  publishers and advertising agencies.

We spoke with him earlier today, the first day of the NewFronts, at the MediaLink kick-off breakfast.   The IAB is the organization managing the presentation series.

This will be the second year the NewFronts will be managed by the IAB.  The showcase was first launched in 2008 by Digitas.

We spoke with Rothenberg this week at the IAB’s Annual Leadership Meeting.

We spoke with him on Wednesday at the BrightRoll video conference where he was the closing speaker.

We spoke with him at Cannes Lions, after a roof-top panel discussion of the heads of the trading desks of the major holding companies.  The event was organized by the Rubicon Project.  Here is an article  in USA Today by Michael Wolff who was on hand to cover.

We spoke with him on Tuesday at the AOL NewFront event.