The Shift To Rich

Is rich media becoming the new online advertising model?

We’ve come a long way since the banner GIF defined web advertising in 1994. People clicked with curiosity, average CTRs were double-digit, and a new ad form came to life. Five years later the novelty is wearing thin, and marketers are looking for new advertising strategies.

Some of these strategies go beyond the banner to email ads, coupon and game promotions, and specialized directory listings. Others rely on one-to-one marketing personalization and database techniques, rewards, incentives and loyalty programs. There’s a decided shift toward optimizing banner campaigns with testing and targeting. But most notable is the gradual shift toward rich media interactive banners.

Forward-thinking shops are concentrating on providing interactive solutions based on the client’s business model. These new banners give the user information and action on the banner real estate, rather than taking them to another site. That’s what rich media is all about, thinking from the customer viewpoint.

Some of the leading rich media technologies include Thinking Media’s Active Ads, AtHome’s Enliven, Unicast interstitials and superstitials, Macromedia’s Shockwave and Flash, RealNetworks’ Instream Ads, Intervu’s streaming audio/video solutions, and AudioBase’s web audio delivery.

Some of these hog more bandwidth than others, some don’t sit well on firewalls, and some are limited because of plug-in requirements. But they are out there and giving better results to advertisers than animated GIF banners.

In fact, the Wired-Millward Brown study

 

found that rich media can raise both brand awareness and click-through by a factor of four, citing that Intel’s Xeon “plasma” Java banner increased its brand image by 15 percent. Jupiter predicts one-third of all ad spending will be in rich media ads by 2002, while noting that most publishers and agencies aren’t ready for rapid growth in the demand for rich media ads.

A number of interactive agencies and specialty shops have created custom Java banners with lower bandwidth. Freestyle Software and DSW Partners created the Xeon banner mentioned above, as well as the lightweight 17k Intel Doorswirl ad reviewed recently on Microscope. Karim Sanjabi of Freestyle believes well-designed rich media ads offer concrete solutions to today’s plummeting GIF click rates.

Gettheclick.com reported over 29 percent CTR with its scratch-off banner campaigns for multiple clients. Another scratch and win campaign by Prizes.com got CTRs ranging from 14 to over 30 percent. The next generation of rich media banners will offer incredibly low bandwidth with multimedia audio/video, transactions in the banner, tracking and reporting capabilities, and no plug-ins.

There’s no doubt advertisers are shifting to new ad models. A recent Jupiter Communications survey of online publishers indicates that 61 percent of online advertising inventory is in banner ads, 27 percent is in sponsorships, and 8 percent in interstitials. The other 4 percent goes into a mix of promotions. What’s more, Jupiter sees a drop in banner ads as a percentage of online advertising dollars, from 60 percent this year to 40 percent by 2003.

eMarketer sees a sharper decline in banners, predicting they will account for only one quarter (26 percent) of web ad sales, with sponsorships increasing to 58 percent of ad dollars spent by year-end 2001.

To help give rich media some direction, AdKnowledge has announced the Rich Media Advertising Standard (RichAdS), a mechanism that allows advertisers to use any rich media format for their web ads through AdKnowledge’s ad serving services. They define rich media advertising as anything that isn’t GIF-based. Rich ads can include Java-based games, audio or video clips, or provide some degree of interactivity with viewers.

So that’s the handwriting on the wall.

In addition to banners and beyond, we’ve had affiliate marketing programs, which come in all varieties since initiated by Amazon in 1996. Retailers save on advertising costs by setting up affiliate sites that get a 5 to 20 percent commission on sales driven from those sites.

The sponsorship model has been around since early TV days and is gathering momentum on the web because it allows an advertiser to attach its company name to site content on a permanent basis. Advertisers can associate their brands with quality content while building relationships with online audiences on branded sites in key niches. This model can be less intrusive than banners and gives the impression of partnership and commitment over time.

Perhaps the sleeper in ad models is direct email marketing. It hasn’t flourished because of the unfortunate association with Spam. In fact, most marketers have been using email marketing quietly, almost apologetically. At present it only gets 1 percent of the advertising dollar. Opt-in email is attractive, though, as it’s cheaper and faster than snail mail, easy to customize and use. Not to mention instant response capability and the fact that opt-in list prospects are highly qualified, have asked for the information, and are looking to buy.

The last of the ad models is web promotions. Not new by any means, these techniques are gaining momentum. The most popular are sweepstakes and contests, but retailers are also using volume incentives, coupons, general price promotions and membership programs. Promotions will increasingly play a critical role in online marketing.

The web marketing mix has plenty of ad models — the trick is to match the different capabilities to your business goals. Banners will become less dominant but more effective, and other ad vehicles will increasingly become a larger part of the marketing mix. Direct marketing efforts will increase in line with the e-commerce explosion, with emphasis shifting from branding to direct response. Online branding campaigns will be more effective as part of integrated online/offline efforts.

So will the shift to rich media last?

Maybe the high response rates are due to the novelty. But if rich media enhancement features give users what they want and provide quality information or order fulfillment satisfaction, it makes sense that it’s here to stay.

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