You Can Get There From Here

In recent days, several readers have asked me to explain what exactly online marketing is and what part rich media plays in it.

The questions made me realize that online marketers can’t assume that industry terms and acronyms like CPM, CTR, ROI, ROMO, and various others will be instantly understood by whoever hears them. The reality of the online marketing world is that there are too few of us who know (or think we know) what is going on and many more still trying to get up to speed on what rich media marketing is and how it can benefit them.

Today, for the benefit of those who are now just arriving, I am going to try to describe the fundamentals of online advertising and hopefully shed a little light.

A General Definition

Unless you’ve been living in a cave recently, you’ve encountered technologies such as Macromedia Flash and Java. These are tools for creating content that offers the Web user greater impact and value and the opportunity to interact with the ad. However, they can also be used to create ads that require no user involvement at all. But the one factor that I would include as being paramount to any “true” rich media format is that it needs to be interactive.

To begin with, rich media isn’t really a what. It’s more like a how. There are many tools available now for the creation of rich media content. These range from design and art tools to audio and video elements to the back-end technology that allows the rich media to be presented to the world. From my perspective, rich media is the online evolution of multimedia, which is also an umbrella term covering many different types of interactive technology and development approaches.

A Quick Review of the Process

Rich media ads are created by ad agencies or by production teams at rich media providers such as Enliven and Unicast. As with any successful advertising, the goal is to communicate an ad’s message to as many of the right people as possible.

The ad unit that a site sells to an advertiser who wants to advertise on that site is based on the concept of getting that ad in front of the user. Each time this happens, such as when a Web page loads, this is known as an “impression.” Impressions are sold to advertisers by sites and ad-hosting services generally on a “per thousand” basis.

When we mention an ad’s CPM or a site’s CPM, we are referring to the pricing of the cost per thousand (M) impressions to run that ad. Site rates differ depending on traffic and demographics, but right now, standard CPM ad pricing for online ads ranges from less than $1 to more than $10.

Rich media advertisers such as Enliven or bluestreak charge an additional CPM for the rich media ads that they serve. Why? Because they provide the added value of tracking, in real time, not only the ad impressions but also the percentage of users who saw the ad and interacted with it; the number of mouse clicks that occurred per ad; which specific items in the ad the user clicked on or interacted with; the number of collateral pieces printed out (if the ad has print functionality); the amount and type of data captured in the ad (once again, if applicable); and the number of users who clicked through to the advertiser’s Web site (click-through rate, or CTR), which rich media advertising can help avoid as a campaign success metric. This information can be measured per each site on which the ad is running, providing a very clear picture of which sites are best reaching the advertiser’s marketing goals.

For advertisers, user tracking information is also invaluable because it helps them determine if an ad reached the return-on-investment (ROI) criteria. The ROI basically indicates whether the ad was responsible for earning more money than it cost to run it. In some cases, it is hard to draw a direct correlation between what an ad cost to create and run and how much money it generated. In those cases, a more general term, such as “return on marketing objectives (ROMO),” may be more applicable. In the case of an ad whose function was to brand the users or to have users print out a coupon, then a high rate of interactivity with the ad would be a good indication if the ad successfully branded users or got them to print or not.

Essentially, advertisers are going to want to pay a CPM that gets a high CTR (if that is their goal) or interaction rate so the ad best meets their ROI or ROMO needs. Whew, you’re smarter already!

Next time, we’ll take a look at the immediate benefits that rich media ads can provide and how to design them so that they stand out from static GIF ads.

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