A lack of technological standards is plaguing the ad form, ranging from the inability to easily run national online campaigns across multiple sites to insufficient tracking abilities.
This comes at a time when more publishers, unhappy with falling cost-per-thousand impression rates for ad banners, are under pressure to sell more expensive rich-media options. At the same time, more traditional advertisers, distressed by 0.3% and 0.4% average banner click-through rates, are experimenting with online advertising and turning to rich media options-which range from animation to audio and video-because they are the closest things to what advertisers know from offline media: TV commercials.
"I think rich media has always been difficult to deploy and to gauge effectiveness for," said Marissa Gluck, senior analyst at Jupiter Research. Many traditional advertisers "think the only way to do (online advertising) is to turn Internet ads into commercials.
"I think they're not going to see a significant return on investment," she said, adding that rich-media ads are traditionally expensive to produce, to deploy and tend not be very targeted. And because there are no set standards, "the learning curve [at sites] has to be climbed each and every time. Each unit is different." Ms. Gluck said each time a site runs a different piece of rich-media creative it must run quality assurance tests to make sure the ad won't crash the site, slow down the site or turn off too many of the site's users who are unable to access it.
One has to wonder whether this, aided by the downturn in online advertising, has had fallout among the companies providing rich-media technology.
Excite@Home recently said it would be selling its rich-media production subsidiary Enliven to focus on its core business of broadband access. An Excite@Home spokeswoman said Enliven is doing well. But if the unit were thriving, would it be up for sale?
"I don't think anyone is a making big bucks in this space," said John Bowen, VP-rich media for F.A.C/Equities, a division of First Albany Corp. "It's still too early."
While he believes the industry will continue to grow in the next few years, he said many issues like compression and bandwidth need to be addressed.
A Jupiter Research report states Enliven is the second most-utilized rich-media tool, used by 27% of those polled, tied with RealNetworks' RealAudio. Macromedia's Flash is the leader (54%); other formats include Unicast's Superstitial ad format (12%), which uses Flash, and RealNetworks' RealVideo (12%).
But some efforts are under way to establish standards. Last month, for instance, Macromedia formed the Macromedia Flash Advertising Alliance. Charter members of the alliance include AOL Time Warner, rich-media provider BlueStreak.com, CNET Networks, DoubleClick, CMGI-controlled Engage, Enliven, Goodby, Silverstein & Partners in San Francisco and Unicast. The goal of the group is to clarify how rich-media advertising (read: Flash) is created, delivered and tracked effectively.
While these are positive inroads, some industry watchers say more technological standards are needed.
"When you compare the Internet to TV, advertisers can run a 30-second commercial on any station," said Allie Shaw, VP-worldwide marketing at Unicast, while the same is far from true about the Web. "We're at risk of sending advertisers back to traditional media," she said, because they'll be so disillusioned with the cost and struggles of trying to get these online campaigns produced across multiple sites.
David Cohen, North America media director at i-shop Zentropy Partners, New York, part of Interpublic Group of Cos.' McCann-Erickson WorldGroup, agrees. He's used several forms of rich media for his clients, including Unicast.
Zentropy, which is the online-media planning and buying agency of record for Coca-Cola Co., just finished running a Classic Coke Web campaign with Unicast and is about to launch another for Diet Coke. IXL handled online creative for the campaign.
While the rich-media Superstitials from Unicast are expensive for the amount of people they're reaching compared to a banner or button, Mr. Cohen said, "they're performing tremendously well" and justify the cost.
Priced on a per impression basis, the average banner might have a $10-$15 CPM vs. Superstitials, which cost more than $30 per thousand. But banners are only getting 0.3% to 0.4% clickthroughs he said, compared to the 3% to 7% clickthroughs Zentropy and iXL have generated with Superstitials.
A bigger issue Mr. Cohen has with rich-media companies is being oversold on what their products can deliver. "The concept sounds great, the technology sounds great," he said, but "we might not be able to track them; they don't work properly; or they might work but not in the way they were sold to us."