What\u2019s the difference between \u201cdirect\u201d brands and \u201cindirect\u201d brands? The distinction is the subject of the largest research project the Internet Advertising Bureau has ever done and it will be the centerpiece of the organization\u2019s upcoming Annual Leadership Meeting.<\/p>\n
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.\u00a0The Annual Leadership Meeting<\/a> takes place Feb. 11-13 at the JW Marriott Desert Springs Resort & Spa, Palm Desert, CA.<\/p>\n \u201cThe center of gravity is changing,\u201d says Rothenberg.<\/p>\n 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\u2019s direct brands create value with low barriers, are capital flexible and avail themselves of leased or rented supply chains.<\/p>\n Moreover, indirect brands extract value \u201cnot 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,\u201d says Rothenberg<\/a>.<\/p>\n 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.<\/p>\n \u201cAnd 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.\u201d<\/p>\n Not all legacy marketers are lagging on this competition curve. Rothenberg cites Nike as \u201ca perfect example\u201d with its projected 2X increase in direct-to-consumer revenue \u201cin just the next three years.\u201d Procter & Gamble is behind in this regard but is actively \u201corienting some of their strategy in this direction,\u201d he adds.<\/p>\n Asked about the role of publishers in the modern marketing mix, Rothenberg points to the necessity to \u201cstep outside the impressions-based economy\u201d and work to create direct relationships.<\/p>\n \u201cClearly, publishers always have and will continue to play a role in helping all brands acquire new customers. It\u2019s just happening in many different ways than it used to happen before.\u201d<\/p>\n