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IMedia Summit Buzzes Over Broadband, Rich Media

Mainstream Marketers Sharply Increase Online Ad Spending This Year

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BONITA SPRINGS, Fla. (AdAge.com) -- Much of the buzz at the iMedia brand summit has been about the rapid growth of broadband and rich media and what this means for marketers.

The iMedia Summit took place at the Hyatt Coconut Point Resort.

Many participants at this Gulf Coast conclave shared off-the-record remarks that their online ad expenditures are increasing substantially this year. Most said they expected to invest more of that spending on rich media formats and branding campaigns. That's because 51% of the online population now has broadband, according to Nielsen/NetRatings, and marketers are acutely aware of that fact.

25% annual growth rate
The result is that rich media -- a method of communication that incorporates animation, sound, video and/or interactivity -- is going to overtake search marketing as the dominant form of Web advertising by the end of the decade, according to online market research firm eMarketer. Rich media accounts for $1 billion in ad spending and is growing at a rate of 25% a year.

"Rich media is becoming the standard ad vehicle on the Internet," said consultant Neil Perry of Neil Perry Associates Inc., who gave conference attendees a sneak peak into a broadband study commissioned by iMedia. Rich media gets five times more clicks than static banner ads.

Rich media works best when used for branding campaigns, he said. "But rich media can work as well with direct response combined with branding," Mr. Perry told an iMedia session. For instance, a TV ad might drive users to a Web site, where they could click on a product video or directly purchase a product.

Online video is popular
Rich media is also effective because broadband users view a lot of rich media online, including video ads. According to the Online Publishers Association, 70% of 27,000 consumers surveyed have seen video ads, and 86% watch online videos in their entirety. "While that's good news for marketers producing video ads, too much of a good thing can kill a golden goose," Mr. Perry cautioned.

Putting a cap on the frequency of rich media use is critical to its success on the Internet, he said. Web users appreciate their newfound control over this new media and will not put up with seeing the same ad again and again as they do on TV. Brands are not yet heeding this intelligence, however. Only 16% of ads are capped, yet 43% of the ads online are rich media, Mr. Perry said.

Broadband-enabled video viewers are savvy consumers, he said. "They are not interested in 30-second spots [like on TV]," he said. The message and how its delivered should suit the medium.

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