Digital Dignitaries Debate Display’s Death

Luma's Kawaja: Give up on brand dollars

Display advertising is largely ineffective. Brands aren’t interested, and they’re not likely to get on board anytime soon. No, the brands are coming online soon—just wait.

Those were two competing visions presented at Federated Media’s Conversation Marketing Summit in New York by several top Web luminaries. On the "display ain’t cutting it" side were Fred Wilson, managing partner at Union Square Ventures, and Terry Kawaja, founder and CEO of Luma Partners, the man behind the infamous slides that serve as the encyclopedia of ad tech.

On the brand side was a perhaps a surprising advocate, Neal Mohan, vp of display advertising of Google, a direct response ad factory if there ever was one.

During a particularly lively keynote, Kawaja urged the industry to get used to fragmentation, to embrace data and to acknowledge that the consumer isn’t in control. He playfully knocked the IAB’s attempt to produce a brand centric alternative to his slide, pointing out that it actually left out a key constituency: consumers.

But for the most part, Kawaja urged the industry to give up on brand dollars and interruptive ads and embrace its commerce-facilitating identity.

“When we talk about brand advertising on the Web, we’re not taking into account consumer modalities,” he said. “An interruptive media is not native to the Web. Bigger ads are not the solution.”

Instead, advertisers need to facilitate “what people are trying to do in the first place,” Kawaja urged—particularly in mobile, where he said full-screen takeover ads are “intolerable.”

“The big publishers need to migrate,” he said.

Not necessarily, according to Mohan, who used his keynote interview with Federated CEO John Battelle to showcase Google’s new oversized display unit The Lightbox, which can stream live content. He actually demonstrated an ad that streamed their interview, nearly in real time.

But when Battelle asked Mohan about Wilson and Kawaja’s contentions that display ads had become “unworkable and on the decline,” Mohan pushed back.

“We as consumers are living in a 24/7 digital world. And our message to brands is that if you’re not focused on that, you’re missing out,” Mohan said. “You’re going to be left behind.”

Getting more brand dollars to the Web “is our top priority of the year,” he added. How’s that going to happen? Mohan identified three key trends: richer ad canvases on the Web, targeting that goes past just basic demographics and better ad effectiveness numbers for upper-funnel measures like awareness and purchase intent.

In other highlights from the Internet Week event:

-Kawaja revealed that from 2010 to 2012 Luma Partners recorded 53 out of 204 companies getting acquired. “That’s 25 percent consolidation,” he said. Yet 74 new companies were added. “That's Lumascape whack-a-mole.”

-Mohan said, “if you are building specifically for mobile, you are building for the past."

-Kawaja called Facebook Home a “Trojan horse for data.”

-Wilson lamented Twitter’s position in the identity space as a distant third: "I don't know how many identity providers we need on the Internet."

-Wilson was more bullish on the growth of native ads, like on Tumblr and other platforms: "It’s inevitable that people are going to build APIs into these native ad systems."