Web giants cash in on rich media

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To hear big online properties like Yahoo!, Microsoft Corp.'s MSN and AOL Time Warner's America Online talk, the future of online advertising could be very, very rich.

Rich media isn't new; but interest in rich-media advertising-ads that dance across a computer screen or appear with full-motion video and audio-is suddenly soaring. In September 2001, less than 1% of all ad impressions on the Internet were rich media, according to Nielsen/NetRatings' AdRelevance service. By September 2002, that figure had risen to nearly 7%. (AdRelevance's data include generic Flash ads, which account for the majority of rich-media executions.) For Web publishers hungry for ad revenue, the prospect of rich media is tantalizing. Not only does it allow marketers to be more creative, but they're also willing to pay more for it than they would for tired banners and buttons. And because rich media lends itself well to branding, it has quickly become the domain of the biggest consumer brands.

"We're not selling buttons and banners for a living. We are selling marketing programs that leverage these new technologies," says Wenda Harris Millard, Yahoo!'s chief sales officer.

Rich media is often sold as part of a package including other types of online advertising such as banners. Publishers tend to charge more for rich-media executions than for straight banners. However, because the ads tend to be technically difficult and many of the rich-media formats are still being tweaked, online publishers will sometimes cover some of the production costs.


In recent months, many of the Web's biggest properties have embraced rich media. Yahoo!, which long resisted rich-media ads because it feared these executions would slow down the performance of its site, has now embraced them and hosted a creative summit for ad agencies in September. MSN has given its blessing to several rich-media formats. And AOL's latest version of its proprietary service, released last month, finally has the capability to showcase rich-media ad formats such as Eyeblaster. (Before, AOL could only run in-house created rich-media ad formats.) "We've gotten more requests [for rich media] in the last two months than the last two years combined," says Lon Otremba, AOL's exec VP-interactive marketing. "It really is that dramatic."

Marketers seem eager to test. Nearly every discussion of online advertising with clients starts with rich media, says Fred Rubin, partner and director of Interpublic Group of Cos.' iDeutsch, New York. "We are big fans" of rich media, he says.

Similarly, many of Carat Interactive's clients are experimenting with the format, including Pfizer, RadioShack Corp., Adidas USA, Viacom's UPN and Hyundai Motor America.

"The stigma of buttons and banners has affected the opinions of [major] marketers to the point where they were less inclined to put budget toward those types of units," says Sarah Fay, president of Carat Interactive, Boston, a division of Aegis Group. "We're seeing much more gravitation toward programs with multimedia.

"The creativity that's afforded right now [by rich media] is really astounding and in some ways even better than what the other media offer," she adds. For marketers, it makes online advertising "a little more sexy, fun and something to try."

Delta Air Lines didn't start working with rich-media advertising until 12 months ago, but already it's a big fan. Delta's rich-media advertising has resulted in increased brand awareness compared with static banner ads, says Rob Sherrell, manager of interactive marketing. He combines a rich-media execution with static banners on the same page to maximize branding impact.

"Using rich media, you have an opportunity to tell people more about whatever the campaign objective is right there in the context of what they're doing," says Mr. Sherrell, as opposed to sending them away to a different Web site.

Not every brand marketer is a firm believer. Hallmark Flowers, a division of Hallmark Cards, is waiting for costs to come down and for technology to become simpler.

The lack of standardized rich-media ad units is a big issue, says Jen Weiss, Hallmark Flowers marketing director. "That leads to more costs, because you need [to develop] versions that are just barely different from one another."

Rich-media pioneer Unicast is attempting to correct that; it recently began promoting its suite of products as an industry standard.

Other marketers fear the potential bottleneck from trying to shove high-bandwidth creative down a dial-up connection. Broadband penetration is rapidly rising, however. By the end of 2002, more than 20 million households are expected to have broadband Internet access, compared to 7.6 million in 2000, according to eMarketer.

"We're always sensitive to the speed of the computers people are using, and we don't want to get too far ahead in technology," says Jeff Bell, VP-marketing for DaimlerChrysler's Jeep.

The bigger problem could come from consumer backlash. Today, pop-up ads are the target. What's to say Web users won't get fed up with rich-media ads, particularly since the ads often interrupt what they're already doing online?

One iDeutsch ad, for WorldCom's MCI, begins invisibly, as several words on the iWon.com site are erased, one at a time, then are lined over in black. Then a series of rectangular ads appear over the page's content. After a few seconds, the ad disappears. An ad for Delta Air Lines from Modem Media, Norwalk, Conn., that appeared on ESPN.com, NYTimes.com and other sites, showed a batter hitting a ball, with the sound and image of a window breaking. The message: "That ball's outta here. And so are you."


They're certainly eye-catching, but some say rich-media ads don't work in some environments. "People who come into a search engine don't want to be interrupted; they want to get where they're going," says Jim Lanzone, VP-product management for Ask Jeeves. "I do not think rich media is congruent with that." He says he accepts rich-media ads only "every now and then."

EarthLink, one of the first Internet service providers to block pop-up ads, says it has the technology to block certain types of rich media and may offer it to subscribers in the future. AOL's Mr. Otremba, on the other hand, says "not one iota of evidence" shows that his consumers are turned off by rich media.

(Meanwhile, AOL has found something that irks its consumers: pop-ups. Last month, it pledged to cut back on pop-ups, which it doesn't view as related to rich-media ads.)

Bottom line, rich-media advertising, like any advertising, will succeed only if it's used in the right context, at the right time. "Rich media is the beginning of the process of healing that will have to happen before marketers allocate serious money to this medium," says Mr. Rubin.

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