UPDATE: Rich and streaming media are on an ever-upward path, but they're still dogged by the same old problems.
Advertisers plan to put significantly more money into rich and streaming media in the next year, but concerns about return on investment and high costs are still stumbling blocks, a recent survey found.
Jupiter Research, a unit of internetnews.com's parent company, came up with the results by interviewing 579 U.S. advertising executives in August.
Asked what percentage of their online ad budgets they expect to spend on rich and streaming media in the next year, 42 percent of advertisers said spending would fall between 1 to 19 percent. Only 36 percent said last year's spending was in that range.
Additionally, 17 percent of advertisers said they would spend between 20 and 39 percent of their online ad budgets on rich media. Only 12 percent said last year's spending was that high.
The biggest jump, however, was in the number of advertisers that planned to use rich media for the first time in the next year. Forty-six percent of advertisers said they'd spent nothing on rich media in the last 12 months, but only 28 percent said they planned no rich media spending over the next year.
Those spending levels will lead to rich media accounting for 11 percent of online ad spending in 2004, and streaming making up 4 percent, according to Jupiter. In 2005, rich media will represent 15 percent of online ad spending, and streaming will account for 6 percent.
"These numbers back up what most sites are reporting -- that rich media usage is on the rise," said Jupiter Research's associate ad analyst, Nate Elliott. "But sites and rich media vendors still need to work together to make it easier to implement rich media ads, and to prove the effectiveness of those rich media campaigns."
Among the different types of rich and streaming advertising, pre-roll video, which appears before streaming content begins, will grow the fastest over the next year, the study found. Only 9 percent of advertisers said they used the format in the past 12 months, but 17 percent said they planned to use it over the next 12.
The most high-profile instance of pre-roll video ads is on ESPN.com, which started offering ESPN Motion spots in April. Since then, nearly 2 million users have installed the proprietary application, and ESPN.com has run ad campaigns for the likes of Gatorade, Lexus and Intel.
The most popular format, though, will remain on-page rich media. Fifty-six percent of advertisers said they'd used it in the past year, but 67 percent expect on-page rich media to be part of their ad plans over the next year.
Although the category is growing steadily, the obstacles in its way are still significant. Advertisers cited unclear ROI and high production, labor and deployment costs as the two most significant obstacles to increased rich media spending. Next came fear of interrupting user experience, bandwidth constraints and lack of targeting precision.
Interestingly, a similar study fielded in 2000 found production, labor and deployment costs at the top of the list of obstacles. Bandwidth constraints, publisher acceptance, unclear ROI and fear of interrupting user experience were also cited as problems. The results would seem to indicate that publisher acceptance is the only hurdle successfully overcome in the past three years, and new concerns about lack of targeting precision have arisen.
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Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.
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