'Silos' preclude digital progress, IAB asserts

The structure of advertising agencies and marketing departments is holding back interactive advertising.

New research, backed by the European Commission and the Internet Advertising Bureau, calls for a restructuring of the advertising process to encourage growth and opportunities for advertisers in digital media.

The study, The Active Ad Project, involved 1,200 advertisers, advertising agencies and media owners across Europe, and says interactivity should be used as part of an overall advertising campaign but is too often used as standalone activity. The findings encourage "real business partnerships between an agency and advertiser at the highest possible level".

It argues that interactive marketing is too often put into a silo, separate from other campaign activity, and that agencies should adopt new models. Danny Meadows-Klue, the chairman and chief executive of the IAB, said: "The feedback about agency structures was surprising. It fits with what happened in the direct marketing industry, when people realised the idea of silos that work separately was the old model and the new one is with a brand team in the middle and a group of experts around it."

The report also highlights some advertisers' lack of knowledge. It says: "The Active Ad investigation has demonstrated that the majority of advertisers are ignorant of the technologies, techniques and methodologies of interactive advertising, the internet, interactive television and mobile wireless communications."

A key finding of the report suggests that, because they can invest greater amounts in training, the growth of interactive will benefit the larger advertising and media agencies rather than the smaller specialists. Its summary says: "Larger ad agencies and media buying agencies are likely to be the ultimate winners. However, those organisations must develop a strategy for the development of their core skills."

The IAB will use the findings to influence its education programmes and plans for the future growth of the industry. Meadows-Klue said: "This is an academic piece of research that shows us how the industry views itself. We will work out how to use it in accelerating the growth of the medium, which can grow more quickly than it is now."

Findings show that advertisers and agencies recognise that click-through rates are not an effective measure of the contribution of interactive advertising to sales or response to interactive activity. It draws attention to the potential of interactive advertising as a branding medium.

The report reflects concerns that agency staff must develop more generalised marketing and business skills to maximise the effect of interactive activity for advertisers. Interactive media will need agencies to work closer with clients and, in some cases, set up a permanent presence in the office of the advertiser.


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