Did Adam Smith have the Internet ad sales market in mind when he penned his famous quote about how customers rarely benefit when competitors get cosy? A fortnight ago, the Internet Advertising Group (IAG) was formed, and 30 of the world’s largest traditional and new media publishers agreed to pay to join what had previously been an informal breakfast and lunching club.
It’s not everyday that envoys from News International break croissants with the Mirror Group, or Microsoft passes the Perrier to CompuServe.
So, is it only a matter of time before the Web is rigged and media buyers are asked to pay extortionate rates for Web space? I doubt it.
When this eclectic bunch first met in the summer of 1996 to discuss the formation of a UK Internet advertising saleshouse, one media owner had a ratecard offering advertising at four times the rate now generally sold.
Sixteen months later, Web advertising is better value, more cleanly bought (normally on a cost-per-thousand basis), and the “industry” is far more accountable. What’s more, the establishment of an electronic version of the Audit Bureau of Circulations was given a leg-up at a United News & Media breakfast, when demand from the publishers present allowed the nascent venture to secure funding from its parent organisation.
Can the IAG continue the good work, or will the establishment of a formal structure and a membership fee degenerate into an ineffectual talking shop or evil cartel?
Early indications suggest that the good work will continue. It’s important to note that the IAG’s activities will be boosted through links with the Internet Advertising Bureau (IAB) in the US, which has invited a subset of IAG’s members to join its European committee.
Together, the IAG, IAB and other European sister groups aim to do for Web advertising internationally what the Radio Advertising Bureau (RAB) has done for commercial radio in the UK. Few doubt the role the RAB has played in bringing a “two per cent” medium into the mainstream.
The IAB has already shown the way in the US by producing case studies, research, and marketing activities to boost demand for Web advertising in its key North American market. But these initiatives cannot simply be US-led. The feisty types on the IAG are serious players in the UK market – unlikely to be subsumed by the agenda of their US cousins.
So would Adam Smith approve? I’d like to think so. Perhaps he had more mature industries in mind when warning of the dangers to customers when competitive suppliers meet. The competitors’ club in the UK new media ad industry has so far proved to be a boon to the buyer – long may that continue.