Online Advertising’s Rich Future

When it comes to advertising, Yahoo has a reputation for being conservative, even downright crotchety. In the interest of keeping download time fast and the user experience clean, the company has resisted implementing any online advertising technologies beyond the simplest animated GIFs.

That’s why Yahoo’s Web site last Friday was such a surprise. Yahoo effectively turned over its entire home page to an advertiser for the day. The result was the most memorable bit of advertising the industry has seen in a while.

Here’s what visitors saw. The page loaded with a small banner picturing some birds below the Yahoo logo. After a few seconds, the banner came alive; the birds flew down from the page onto a larger brownish banner (with “seeds”) on the right. The birds then proceeded to peck away at that banner, gradually revealing a Ford Explorer logo.

Clicking on the ad brought a number of surprises. First, the whole browser window shook; then the entire directory of links — the heart of Yahoo’s home page — disappeared. A truck appeared in the distance and drove right onto the page, and another logo appeared. Talk about intrusive advertising…

Welcome to the future of online advertising.

While most people in the industry acknowledge that 468 x 60 banners can be effective vehicles for branding and direct response, the industry is evolving toward formats that can communicate more. To compete with other media, the Internet has to offer a larger palette to advertisers.

Because advertising-supported sites are being squeezed to make a profit, and because the online advertising market is flat, Web sites like Yahoo are starting to become less cautious about offending users with in-your-face advertising. If watching ads on TV is part of the deal, most sites feel that Internet users will accept pop-ups, interstitials, animation, and other kinds of rich media advertising in exchange for free content.

A Rich Media Primer

What exactly is rich media? It’s really a grab bag of anything that isn’t a simple GIF — but it can be classified into three different categories: vector-based, streaming, and programming-based technologies.

  • Vector-based rich media relies on plug-ins; users have to download software in order to experience it. But some of the most common technologies, like Flash, have penetration rates of 80 to 90 percent and offer great creative flexibility. Check out this great browser-shaking execution built with Flash. Another good example is the hot, new (but poorly named) Shoshkele, which also uses Flash in its execution.

  • Streaming-based rich media, like video and audio players, also offer interesting opportunities for advertisers. My favorite audio player, MUSICMATCH, has radio-like ads between songs.
  • Programming-based rich media is the most powerful and versatile kind of rich media. Ads like this one for Hewlett-Packard, built in Java by Freestyle Interactive, are an example of the incredible range it gives advertisers.

Rich Media Divide

Bill McCloskey, president of Emerging Interest (and the person who came up with the above classifications), spends his days trying to educate the industry about rich media and spur on its adoption.

Bill believes that the industry will soon witness a “rich media divide” between Web sites: those that can accommodate rich media and attract advertising dollars; and those that can’t, or won’t, and will ultimately lose out.

But there’s a divide among users, too. A few friends of mine went to the Yahoo site and couldn’t experience the ad. Until the industry adopts standards and broadband connections become more commonplace, the ability to provide immersive advertising solutions will be constrained.

Ultimately, however, the greatest divide will be between advertisers who capitalize on rich media’s power to engage, titillate, and entertain users, and those whose mentality is limited by the prospect of cheap clicks. Time will tell which side will win out, but I know who I’m putting my money on.

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