Originally published and prepared for Sparrow clients - since this was such a great show we're making it public for everyone. Enjoy!
We recently attended the IAB Annual Leadership Meeting in sunny Palm Desert, CA -- for many years now this has been the must-attend conference for senior execs across adtech & (increasing parts of) martech. While the main audience tended to skew more towards publishers and tech companies/platforms in previous years, the IAB has consciously been expanding and proactively reaching out to brands to involve them in this and other relevant industry conversation that the organization facilitates. Last year at the same venue, P&G’s Marc Pritchard issued his industry-rallying call on transparency and ushered in some major changes that his organization was putting in play immediately (and, of course, anything that someone who commands the size/spend of a P&G does has instant ramifications of the rest of the advertising and marketing worlds). Since this conference tends to set the main areas of focus for the industry for the remainder of the year, here are the most important takeaways we had:
- The overarching theme of the conference was that 21st century brands look, feel, communicate and operate differently than ‘traditional’ brands -- what’s a good blanket name for not-digitally-native brands here? Traditional? Legacy? Pre-digital? The jury will probably stay out on that terminology note for a while. We’re leaning towards legacy as it implies an approach to people, process, and technology that is less-than-ideally-suited to the new realities of getting products to market and telling customers about them. To that end the IAB has come up with the useful timeline of the industrial revolution (and we’re currently in its 4th stage).
- Unsurprisingly, many of the key tenets of a 21st century brand favor direct-to-consumer relationships. It’s no longer enough to talk at the customer and have them talk back with their credit cards; the expectation is that this is now a two-way conversation & a relationship that extends beyond transactions (one of the reasons why D2C brands emphasize their missions, views of the world, inclusivity, etc). What really differentiates these brands is velocity: whether of supply chain (from design through product production to delivering to consumers) or of advertising (quick test digital campaigns, continuous optimization and improvements). Jeffrey Cole, Director - Center for the Digital Future on The Transformation of the Media at the USC Annenberg School for Communication and Journalism - had a spectacularly entertaining and spot-on keynote (with no slides): the crux of his presentation was that change happens so quickly now that, if you’re trying to catch up, you can’t build for today - by the time you build it all out it will already be obsolete. Which opens up another interesting consideration: if everyone uses the same short-term fixes (and header bidding may be the perfect example here) does that really generate a significant-enough competitive advantage except in the short term?
- The IAB, in partnership with Dun & Bradstreet, compiled and released an index of 250 Direct brands to watch. This is a tremendous asset as it can be hard to grasp just how big the D2C space is unless you’ve been on the receiving end of a challenger brand directly coming for your share of market. I imagine this will be a great target list for many a tech vendor sales teams. There’s another interesting aspect of market maturity to ponder here: most of these brands predominantly market themselves through digital channels. As they hit certain scale, they inevitably begin to need a more holistic, multi-channel marketing mix. This presents an opportunity for savvy consultancies to cater to this currently somewhat unique use case. It reminds me of the early wild west days of digital when that was the new channel on the block; in this case it’s almost the reverse -- how do you best leverage traditional channels like TV, OOH, radio, direct mail to maximize impact on a digital-first customer. Cool and potentially quite lucrative problems to solve.
- An interesting observation that Randall Rothenberg made during his excellent keynote was that the majority of the highlighted D2C brands (certainly the bulk of the Top 250 in IAB’s index) had founders who were women or came from other under-represented backgrounds. If we think of legacy brands as gatekeeprs, then D2C brands are here to democratize what gets to market and by whom; it’s only natural that it would overindex in founders and leaders that have been traditionally underrepresented or marginalized. We’ve seen this movie before in other industries like publishing, and (at a risk of making a double pun) film and television. By lessening the amount of upfront investment needed to launch a product we’re opening up possibilities for, to borrow a concept from software development, lean brands: those that operate a much smaller footprint in terms of physical stores, factories, employees, etc. than legacy brands but are able to command outsized share of voice of a consumer’s wallet.
- Speaking of women, kudos to AppNexus for continuing to invest in the Women’s Leadership Breakfast series at ALM. This year we’ve graduated from an invite-only conference suite to a ballroom and the main conference agenda. If your eyes glaze over at the mention of such initiatives think of them from an investment perspective: women have been so routinely and systematically paid less and passed over for promotions that you’re guaranteed to get some truly spectacularly capable talent. Who wants to be mediocre?
- The GDPR go-live date is fast approaching and it’s encouraging that the GDPR-themed town hall was standing room only. Possibly thanks to the ‘boy who cried wolf’ rollout of EU’s privacy/cookie law of 2011, there doesn’t seem to be enough urgency about GDPR stateside. It’s a wildly different animal and really not just an issue of formal regulation and big penalties - although the EU is certainly leading the way here. Direct-to-consumer brands really need to be mindful of being good custodians of consumer data. A proactive consumer rights framework would be a good and necessary start in other geographies, too, especially as consumers become increasingly interested in the tradeoffs of personal data for services (and high-profile hacks and leaks are only helping accelerate this).
There you have it: some big topics and trends that are coming to a head in 2018. In a nutshell it’s all about adaptability and agility: those that can make quick decisions backed up by data and who don’t over-invest in specific point solutions but rather prepare for a more fluid, on-demand operation will be the likely winners both short- and long-term. If legacy brands don’t adapt quickly then the logo slide of the world’s most cherished brands in 5 years time will look very different than it does today.