OBSTACLES, FEARS SLOW ADOPTION OF RICH MEDIA; THE ISSUES: WARY SITES AWAIT IMPROVED PERFORMANCE TRACKING, FEWER FORMATS AND EASIER TESTING

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Tempy evans-munoz, marketing manager at Deja News, was demonstrating new audio banner ads she had helped create when it happened. The wrong audio message began playing when she clicked on one of the banners.

Meanwhile, at agency Euro RSCG DSW Partners, San Francisco, interactive banners designed to capture registrations for a client newsletter didn't work right. Group Media Director Courtenay Martin says she has no idea how many names and e-mail addresses were lost.

GLITCHES

Those glitches aren't stopping DSW or Deja News from using rich media, however.

Some 80% of the online advertising DSW creates for clients such as Intel Corp. involve some form of interactivity, audio or video, Ms. Martin says. And Ms. Evans-Munoz is bullish on rich media because the audio banners generate much higher click-through rates than other ads.

It's clear that rich media present real benefits for advertisers. As of December, 348 sites accepted Java banners, one of the most common forms of rich-media advertising, up 90% from the previous year, according to AdKnowledge.

Major ad-serving companies all support several formats of rich media, including audio, video, Shockwave and Enliven by Narrative Communications.

'THE LAST THING WE WANT'

"The last thing we want to do is turn away ad revenue because we can't handle a type of creative," says Geoff Judge, VP-affiliate relations with ad network 24/7 Media.

Despite their readiness to deliver, ad-serving companies MatchLogic, AdForce and DoubleClick all say no more than 10% of the ads they serve are rich media (24/7 and Flycast say their figures are closer to 20%, while NetGravity's is 5%).

So what's holding rich media back? Advertisers and agencies that don't have the creative firepower yet, and sites that fear the glitches that result from ads that take too long to load, don't work properly or don't load at all.

STARTING FROM SCRATCH

"The last thing we can afford to do is not deliver the news on a timely basis," says Mike Stoeckel, director of business development for interactive ad systems at CNN Internet Technologies. "We're starting from scratch every time we have rich media on our Web site."

CNN takes up to two weeks to test a rich-media ad and, to avoid problems with outside ad servers, won't accept the format on its home pages for CNN, CNN/SI or CNNfn unless it serves the ad itself. Other sites, including Yahoo! and AltaVista, have similar restrictive policies.

Ad-serving companies, agencies and site publishers say rich media won't take off until several issues are resolved, including fewer ad formats, better methods of tracking the performance of rich-media advertising, and better and easier testing of the ads.

FEWER FORMATS WOULD HELP

Much of rich-media advertising uses proprietary technology that makes it difficult for advertisers to repurpose creative. There's Narrative's Enliven banners, Thinking Media's Active Ads, RealNetworks' RealAudio and RealVideo ads, and more.

All sides agree that fewer formats -- or a few formats that are widely used -- would help.

"Each site is getting comfortable with what it wants an ad to do," says Michael Tanne, VP-business development at AdForce. But there's a big difference between comfort and consistency, he says.

NEW INTERNET GUIDELINES

Those concerns are at the heart of new Internet advertising guidelines being issued today by FAST. The online advertising advocacy group believes its guidelines specifying four general ad formats along with lowest-common denominator recommendations for performance will make it easier to deploy rich media (see accompanying story).

The guidelines purposely don't recommend specific rich-media technology vendors or ad types.

Not everyone agrees the guidelines are a good thing. Aside from the usual concerns about imposing standards on a new medium, several ad-serving companies say the bigger issue is finding standard ways to measure response to rich-media advertising.

THIRD PARTIES COMPLICATE COUNT

Such advertising gets even more complicated to measure when a third-party ad-serving company gets involved. Each entity that handles part of the ad creates its own set of statistics, such as measuring click-throughs. No one entity has control of the process.

"There are no standards for counting an impression or counting a click in enhanced creative," says Christopher Saridakis, general manager of DoubleClick's DART service. "We would have to communicate [with a third-party ad-serving company] every time someone clicked."

So ad-serving companies are racing to develop software add-ons and alliances to make the process smoother. NetGravity and MatchLogic teamed up to create what they hope will become industry-standard ways of tagging and counting rich-media ads.

TESTING EATS TIME

Testing the creative is a big time eater. No one wants to deliver a bad user experience, such as a crashed browser or an ad that doesn't play. So the technology company will test the ad, the agency will test the ad, the ad-serving company will test it and so will the publisher. And still, ads fail.

Agencies chafe at sites that insist on retesting ads and adding time to the process. "We don't have two weeks to do a whole rigmarole of testing," says Thomas Hespos, media director with K2 Design, New York.

Ad-serving companies are similarly unhappy with the time and money it takes to debug an ad. MatchLogic routinely takes up to eight hours to test an ad, says Russell Yanda, co-founder and director of rich media.

'EVERYBODY'S FEELING THE PAIN'

One solution would be creating a centralized Internet advertising testing facility, akin to the cable TV industry's CableLabs. It's something Rich LeFurgy, chairman of FAST and the Internet Advertising Bureau, says he's hoping the industry will implement.

"Everybody's feeling the pain" of testing ads, Mr. LeFurgy says. While the industry is generally in favor of such an idea, no one's figured out how it would be funded.

Solving these problems could make rich media a slam dunk for advertisers like Deja News and agencies like DSW. Says DSW's Ms. Martin, "In our perfect world,

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