IAS Needs a Clearer Vision

I wrote admiringly last week about the way Publicis’ messaging positions the company in relation to what the holdco describes as the dominant marketing and media challenge of the current era: fragmentation. Essentially, Publicis’ view of the industry and its place within it is:

1. Media has never been more fragmented, and as such, it’s never been harder to reach and measure interactions with consumers.

2. Epsilon gives Publicis the most powerful view of consumers.

3. Epsilon, paired with Publicis’ investments in emerging channels such as influencer marketing and commerce media, gives Publicis a unique ability to deliver personalized reach or interactions across channels.

4. Epsilon also allows Publicis to measure and optimize those interactions, fostering a virtuous cycle and proving impact.

What I like about this story is that it rests on an overarching vision of the dominant problem the company’s customers face, and it positions Publicis as offering cutting-edge solutions to that problem. Plus, Publicis returns to the problem of fragmentation often, consistently linking their new investments and product launches to Epsilon as well as the company’s ability to deliver and measure personalized reach.

Integral Ad Science, of which I’ve written before as an undifferentiated but smaller carbon copy of ad verification leader DoubleVerify, could benefit from the Publicis messaging playbook. If you read IAS’ Nov 12 Q3 earnings call, you’ll find a string of positive sales and product updates but no comprehensive vision of the industry that instills confidence in the company’s mid- to long-term prospects. That’s a job for messaging and positioning.

Some of the positive updates CEO Lisa Utzschneider shares include wins of former Oracle customers; the launch of misinformation detection capabilities, pre-bid optimization on social, and a curation product in partnership with Google; and new C-level leadership hires. But IAS’ leaders do not present a sweeping vision for a company whose stock is down 40% since its 2021 IPO and more than 40% since July 2023 (at which point it had recovered quite a lot from the common adtech post-2021 dip). 

This lack of vision becomes more apparent on the earnings call when analyst Brian Pitz of BMO essentially brings up a previous IAS talking point that could be the basis for such a vision:

“I know you discussed previously that advertisers continue to seek transparency and efficiency [as well as] that broader shift from insurance to performance over the long run. Can you give us an update on the discussion and feedback during your sales processes? Is this something that most accounts or only a handful are really discussing or asking for right now?”

Advertisers’ push for efficiency seems like a potential equivalent for IAS of Publicis’ fragmentation: an industry-wide issue that the company can rally around to explain why its products are urgent — and why they’re potentially becoming more urgent and differentiated. Indeed, when pushed, Utzschneider says the following about IAS’ response to advertisers’ demands for efficiency:

The advertisers are absolutely very focused on all things related to efficiency and ROI. And this is more [of] a macro digital advertising perspective: every single dollar that an advertiser invests in digital advertising, they want to get the best bang for their buck.

So with that, the fact that IAS is providing transparency, providing solutions that help the brands reach higher-quality media, offering pre-bid products, again, that drive that efficiency and higher ROI — the brands are very focused on that. I would also say at a macro level heading into the fourth quarter, efficiency is the word that we repeatedly hear from brands when it comes to advertising, so the shift from insurance — ensuring that we protect brand equity, brand reputation for the Fortune 500 brands — but equally if not more important is that we're also helping the brands drive higher ROI through the solutions and products that we're offering.

This could be crisper (and it would probably be easier for the CEO to be crisp on this point if the point were interwoven into the company’s overall messaging and thus its prepared remarks for the earnings call), but the ingredients of a compelling vision of digital advertising that places IAS closer to the forefront of the industry are here. And the ingredients get more robust later on, again in the Q&A, when Utzschneider is asked if IAS’ new pre-bid optimization tools for social platforms will create incremental demand for its products: “I would say … a type of advertiser who would lean into pre-bid and has yet to activate post-bid would be mid-market. So mid-market being more performance-based marketers,” Utzschneider says.

Here’s the direction IAS might consider:

1. In the age of AI and measurable outcomes, advertisers have never faced greater pressure to prove that every marketing dollar is being spent efficiently. We are, in other words, in the age of efficiency.

2. IAS is positioning itself at the forefront of the efficiency era by shifting the ad verification market from post-bid to pre-bid optimization across channels. This shift will help advertisers produce performance and reward the publishers who best drive it, thereby making IAS critical to efficiency, or performance, instead of relegating it to the position of an insurer. (Of course, DV already has a leg up here with SciBids, and IAS would need to prove it is capable of driving efficiency to claim that hill.)

3. Ad verification has historically been a focus for big brands and agencies. The shift from insurance to performance will, like the shift to performance TV, drastically expand the total addressable market of IAS, or ad verification, by ushering in the legions of performance marketers, especially ecommerce advertisers, who have spurred AppLovin to become the most valuable independent adtech company but who hitherto represent a mostly untapped market for IAS. 

Of course, I’m just a guy throwing peanuts from the gallery. I don’t know to what extent the above is true, and it helps if things are, well, mostly true when you use them to shape investors’ understanding of the industry as well as your position within it. To adopt this message or a different, more accurate version of it, IAS would need to interview internal leaders, product experts, and customers and synthesize their feedback to land on a message that captures the most ambitious future the company may be able to enact while remaining true to its product roadmap and its customers’ existing preferences.

However, of this we can be sure: IAS, like any other public adtech company, shouldn’t have to wait to be prompted during an earnings call Q&A to offer a sweeping vision of the industry, the change within it, and IAS’ potential position as a driver and beneficiary of that change. The CEO’s prepared remarks — and the company’s messaging in every one of its public-facing communications — should lay out that vision for customers, investors, employees, and influencers. Moreover, IAS should bring its message directly to the market on the primary channels where digital advertising professionals consume information. The company reportedly has a 70-person marketing team, and yet it’s virtually absent from LinkedIn and Twitter, which are the primary channels where it would have the opportunity to shift industry perception. Why?

Don’t let others define you, and don’t leave a vacuum. Present a bold vision. Define the industry and your position within it. Otherwise, the guy in the peanut gallery will.