Animated GIFs: More Expensive Than Rich Media?

Yes, that’s right. Rich media is much cheaper than animated GIFs. Skeptical? Let me explain…

An agency tries to deliver the best results to its customers, often at the least cost. So, let’s compare the cost and result of two hypothetical banner campaigns: one animated GIF, and one rich media.

In each campaign, we produce a single banner and place it for $100,000 at $10 CPM, which buys us ten million impressions. The goal of the campaign is direct response, and the agency will be judged by how many site visitors it can drive; therefore, the click result is what we’ll measure.

First, let’s consider the animated GIF campaign:

GIF Production Cost:	$2,000
Media Buy:	$100,000
Total Campaign Cost:	$102,000
Total Impressions:	10,000,000
Click-Through Rate:	0.4%
Results:	40,000 clicks
Efficiency:	0.39 clicks per dollar

Now, the rich media campaign: (Conservatively assuming that the rich media treatment doubles the GIF click-through rate.)

Rich Media Production Cost:	$10,000
Media Buy:	$100,000
Total Campaign Cost:	$110,000
Total Impressions:	10,000,000
Click-Through Rate:	0.8%
Results:	80,000 clicks
Efficiency:	0.73 clicks per dollar

The rich media campaign doubles the results of the animated GIF campaign. Rich media garners 80,000 clicks versus 40,000, yet costs only 8 percent more. To achieve the rich media results in the animated GIF campaign, we would need to spend $100,000 on additional placements, yielding a $202,000 total GIF cost versus a $110,000 total rich media cost. If we choose, we could spend only $50,000 on rich media placement and achieve the same results as the $100,000 animated GIF placement.

Amazing? Yes. Unexpected? Not really. The great results derive from two simple facts:

• Media costs typically dwarf rich media production costs.
  We have seen that average clients will spend at least ten times more on media than they do on production.
• Rich media banners significantly outperform animated GIFs.
  In our example, we assumed that rich media yields double the industry GIF click-through rate; in fact, double is about the worst we have seen. Often, performance has been ten times that of similar animated GIFs. In such cases, a $100,000 GIF media buy would have a real value of $1,000,000 when spent on a rich media placement.

Thus, we can vastly improve the value of our media buy by spending a relatively small additional amount on rich media production.

Indeed, returning to our original premise, when we consider the total cost effectiveness of a campaign, rich media is much cheaper than animated GIFs. This conclusion begs a question: Since rich media produces better results at a lower cost, why don’t more agencies use it? We’ll discuss this topic in next week’s column, when we dispel some of the common myths of rich media.