ANNUAL REPORT 2015 IAB Empowers the Media and Marketing Industries to Thrive in the Digital Economy
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ANNUAL REPORT 2015 IAB empowers the media and marketing industries to thrive in the digital economy. LETTER FROM RANDALL ROTHENBERG ANNUAL REPORT 2015 BUILDING CAPABILITIES FOR GROWTH wenty fifteen was a landmark year for our industry— technical standards and user experience so we and for IAB. Digital advertising is now a $50 billion can delight consumers while building productive sector in the U.S. It’s an astonishing achievement, businesses. and one that was not readily apparent 20 years ago Twenty fifteen was also a year of firsts for IAB and our industry, when IAB was founded. As impressive as this growth including: Tis, we cannot simply celebrate the past. The industry must look forward and ask where the next $50 billion will come from. • IAB Podcast Upfront Showcase—a successful one-day marketplace that previewed the latest digital audio podcast This is neither an idle nor a vain question. Growth in our programming from the biggest names in media industry will create new jobs in digital media and technology as well as in the other industries we support. Growth implies • “What Is an Untrustworthy Supply Chain Costing the U.S. new ways of winning people’s hearts and minds—with ads Digital Advertising Industry?”—a rigorous study conducted and entertainment, yes, but also with news, ideas, and vital by EY for IAB that shows how eliminating fraud and flaws in information. the digital supply chain in the U.S. will enable the digital ad industry to gain $8.2 billion annually Hence the IAB mission: To empower the media and marketing • Mobile Advertising Summit at Mobile World Congress—a industries to thrive in the digital economy. And helping you— full day of programming devoted to mobile advertising and our members—is how we strengthen those industries, and marketing at the world’s largest gathering for the mobile we are more capable of that today than ever. In five years, industry, Mobile World Congress in Barcelona, with partners our membership has expanded to over 600 companies. Facebook and Nasdaq Our financial state is strong. Our staff includes nearly 70 high-performing professionals. Our research, lobbying, and • IAB Programmatic Revenue Report—a much anticipated thought leadership underpin the way our members grow their study that sized U.S. programmatic ad revenues at $10.1 businesses. Our events have built a powerful reputation as the billion in 2014 convening platform for thought leadership in our industry. Even after all these successes, challenges remain. We need to continue to advance technical standards to combat fraud and IAB has made great strides in building capabilities to meet piracy, support education to ensure a healthy and diverse talent the demands of the industry for growth in the U.S. and across pipeline for our industry, and innovate an ad product portfolio the globe. In 2015 we saw significant achievements from the to keep pace with marketer and consumer expectations. IAB Technology Laboratory, the IAB Digital Video Center of Excellence, the IAB Mobile Marketing Center of Excellence, I’m exceptionally proud of everything IAB accomplished in and the IAB Education Foundation. We announced a new 2015 and grateful to the remarkable IAB team that brought it organization, the IAB Data Center of Excellence, which will all to fruition. I am also thankful for the ongoing support from bring expertise to an area critical to the health of the industry. our members and the community that has made these strides possible. By continuing to work together, we can achieve a Our progress in the Making Measurement Make Sense (3MS) prosperous 2016 and beyond. initiative is paving the way for a digital GRP that will allow our industry to plan, buy, and sell advertising across all platforms Sincerely, and media seamlessly. We responded aggressively to threats like ad blocking. Thanks to excellent engagement from industry executives on IAB boards and in our other leadership groups, we took the lead in tackling this issue domestically and abroad. The IAB Tech Lab’s LEAN Randall Rothenberg Ads Program is coalescing the entire marketing and media President and Chief Executive Officer ecosystem around principles that will guide the next phases of Interactive Advertising Bureau 1 ANNUAL REPORT 2015 TABLE OF CONTENTS 4 10 (’000) $0 $2,000 $4,000 $6,000 $8,000 DUES REVENUE 12 CASH BALANCE EVENTS REVENUE SURPLUS 14 16 24 26 28 30 34 TWITTER FACEBOOK LINKEDIN 2012 2013 2014 2015 2 TABLE OF CONTENTS 2015 FINANCIAL REVIEW ............................................. 4 IAB TECH LAB ............................................................. 6 DIGITAL VIDEO CENTER OF EXCELLENCE ....................... 10 IAB EDUCATION FOUNDATION AND CERTIFICATION ...... 12 MAKING MEASUREMENT MAKE SENSE ......................... 14 PUBLIC POLICY AND ADVOCACY .................................. 16 IAB MEMBERS ............................................................ 18 2015 COMMITTEES AND COUNCILS .............................. 20 IAB COMMITTEES AND COUNCILS AT WORK .................. 22 MOBILE MARKETING CENTER OF EXCELLENCE ............... 24 IAB RESEARCH ........................................................... 26 BUILDING BRANDS DIGITALLY ...................................... 28 THOUGHT LEADERSHIP: EVENTS ................................... 30 IAB INTERNATIONAL .................................................. 32 EXPANDING INFLUENCE ............................................. 34 WHO IS IAB? ............................................................. 36 2015 Executive Committee and Board of Directors ......................... 36 IAB Staff ................................................................... 37 3 ANNUAL REPORT 2015 2015 FINANCIAL REVIEW irroring the overall health of the industry it IAB Certification Programs, established just three years ago, serves, the financial state of IAB started and totaled $2.2 million in revenue, and 2015 was the program’s best ended the year strong. It is a reflection of the year yet, bringing the three-year total of candidates of certificants work we do on behalf of our members and and candidates for certification to more than 11,000 men and the confidence they place in us. women. The rapid growth of the certification programs is a validation from our members of how important certifications and MAccording to unaudited 2015 financial statements and under training are for a healthy talent pipeline for our industry. the fiscal leadership of IAB Executive Vice President and COO Patrick Dolan, IAB finished the year with topline revenue of Overall, the newly formed organizations are taking hold and $28 million, up from the record $23.2 million in 2014 and 10 delivering on the revenue projected. percent more than budgeted. The IAB Tech Lab brought in $500,000 in its first year of Membership dues revenue reached a new high of $13.7 million operation, developing tools, standards, and best practices that for 2015, up $2.6 million or 22 percent from 2014, mainly simplify and reduce costs associated with the digital advertising because of a key change to widen the criteria for full voting or and marketing supply chain. IAB also received $250,000 in General Membership to include companies that “sell, distribute, donations to the IAB Education Foundation and its iDiverse or optimize digital advertising or marketing programs.” IAB initiative in 2015, and we are already getting recommitments also saw a slight growth in events income, projected to bring for 2016 and beyond. in $7.4 million or an increase of 3 percent, largely as a result Our video efforts are also showing great progress, and the of the enormously successful IAB Annual Leadership Meeting in IAB Video Center of Excellence is projected to see $575,000 Phoenix, Arizona, in February. in revenue in 2015. Within that, IAB also saw $607,000 in IAB FINANCIAL KEY INDICATORS 2015 (IN MILLIONS) 2015 2015 VAR FROM VAR FROM PROJECTED BUDGET BUDGET $ BUDGET % DUES REVENUE $ 13,676 $ 13,500 $ 176 1% EVENTS REVENUE $ 7,434 $ 6,800 $ 634 9% CERTIFICATION & TRAINING $ 2,164 $ 1,290 $ 874 68% TECH LAB $ 500 $ 625 $ -125 -20% † VIDEO CENTER OF EXCELLENCE $ 1,182 $ 520 $ 662 127% MOBILE CENTER OF EXCELLENCE $ 1,282 $ 1,000 $ 282 28% OTHER REVENUE $ 1,764 $ 1,744 $ 20 1% TOTAL REVENUE $ 28,002 $ 25,479 $ 2,523 10% COGS EXPENSES $ 5,756 $ 5,020 $ 736 15% OPERATING EXPENSES $ 21,012 $ 20,459 $ 553 3% TOTAL EXPENSES $ 26,768 $ 25,479 $ 1,289 5% NET INCOME $ 1,234 $ 0 $ 1,234 N/A † Includes NewFronts 4 2015 FINANCIAL REVIEW revenue from the increasingly popular NewFronts. The IAB IAB MEMBERSHIP GROWTH Mobile Marketing Center of Excellence is projected to see 2010-2015 $1.3 million in revenue in 2015, which is a positive sign for the relevance and success of our mobile efforts. 2010 823 Additional ongoing revenue streams include initiatives such as sponsored research, member services, the spiders and bots list, international licensing fees, and other fundraising programs. 2011 993 In the last two quarters of 2015, IAB invested revenues received in helping member businesses excel. Funding was 2012 1,696 directed toward producing valuable third-party research for building brands in digital as well as investing in the IAB Video Center of Excellence, the newly announced IAB Data Center 2013 1,848 of Excellence, the IAB Technology Laboratory (IAB Tech Lab), the IAB Education Foundation, Making Measurement Make Sense (3MS), and the Trustworthy Accountability 2014 1,898 Group (TAG). Finally, IAB managed expenses closely in 2015, which totaled 2015 1,962 $26.8 million. IAB closed