MarketingSherpa's 2005 Rich Media Ad Report: Reality Check, Annual Data, & 6 Vendor Profiles

In 2004, we introduced this report by saying, "Rich media -- such as Flash, DHTML, streamed video, audio, rollovers, and/or expands -- is one of the fastest-growing ad formats online because it's sexy, it's fun, and it also tends to get much higher response rates than old-fashioned banners. Agencies love rich media because they can be more creative (and bill more for creative). Clients love rich media because it reminds them of TV."

For 2005 it's all true still except for one thing -- rich media may *not* be one of the fastest-growing formats online.

In fact, according to our data it's pretty much holding steady. There's some growth in line with the overall growth of online ads, but nothing spectacular. Nor do we expect a sudden leap anytime soon.

Here's a quick MarketingSherpa reality check for you on rich media advertising including basics, data, and profiles of the top six vendors:

Quick rich media basics and some data

Rich media used to be anything that wasn't a static ad or perhaps an animated GIF. Some people such as still think of it that way, which is why you hear crazy huge numbers like "Rich media is 43% of all online advertising" touted in the news.

Our Metrics Editor Stefan Tornquist defines rich media as any ad that uses, "Flash or another technology to deliver audio, video, sophisticated animation or an interactive experience within an ad." That includes floating ads, but not typical pop-ups or pop-unders.

We asked him how much rich media there was online. He said, "No one is really accurately measuring it beyond their own networks, and the devil is in how you define rich media, but I'd wager it's no more than 10% of all ads served, maybe a lot less. It varies wildly between end users depending on the sites they frequent."

In fact, the dearth of data on rich media is overwhelming. For such a highly publicized tactic, there's a freakish lack of publicly-available benchmarks or metrics.

According to MarketingSherpa's annual AD:TECH attendee survey, folks who are arguably the most likely to be rich media advertisers are not terribly excited about rich media. Take a look at the self-reported data on rich media use:

--------------------------------------------Dec 2003-------Dec 2004
We do not spend on this--------------42% -------------39%
Increasing spending substantially--15% -------------11%
Got great rich media results ---------34% -------------34%
Got moderate results -----------------38% -------------48%
Disappointing results -----------------29% -------------18%

As you can see, spending looks fairly steady year over year. Creative may be improving slightly. While the percent of folks who got great results didn't budge an iota, at least far fewer said their results stank. The problem is, rich media can costs a lot more to produce, more to buy media for, and more to serve than other CPM-based ads online. It's just not worth the effort for merely "moderate results."

Why are almost 50% of results "moderate"? Three possible answers:

Worst Practice #1. Agencies getting creative

"The wonderful thing about rich media is that it allows creative to be much more creative!" one vendor CEO burbled to us delightedly. Well, creativity is great -- for artists, problem solvers, and children. It's not great for online or direct response advertising. (Remember the old saying that ad campaigns that win creative awards are rarely the ones that actually worked?)

Online success is 90% best practices, honed targeting, and tweaking based on analytics. 10% is left for creativity. So a medium that encourages the reverse probably won't get great results.

Worst Practice #2. Repurposing TV ads

Repurposing a TV ad for Web play is like having a radio announcer read your direct mail letter out loud for your drive time spot. TV and Web are two very different mediums, despite the fact that both involve staring at a screen.

For now, increased broadband penetration doesn't make a whit of difference.

The only advertisers who can get away with TV-style video are those offering extremely entertaining content, such as a minimovie. Or those whose ads stand between the viewer and free content they want so badly that they'll sit through your ad as a kind of payment (think Salon.com pre-home-pages).

Worst Practice #3. Few advertisers measure properly

Wonderful news, all of the vendors outlined below provide marvelous measurement tools. Bad news, they all told us that most advertisers don't use the tools properly, if at all. In fact, many advertisers say "Hey what should we measure? What's our goal anyway?" after they've launched the campaign.

Which is one of the reasons there are few published benchmarks for rich media. Even if you are measuring, you have little idea of what other people are measuring, what's critical to measure, or how you compare to other campaigns.

Top six vendors -- a quick Buyer's Guide for you

It's tough being a rich media vendor these days. You have to justify your existence to customers who wonder why they shouldn't just use Flash or Clipstream to whip out rich media in-house? Plus, you have to fend off "me-too" technology claims from all of the competitors (for more on that see a link to a useful article below). And you have to sooth investors who are wondering when this rich media thing is going to finally take off and make them zillionaires.

When you shop for a vendor, our advice is to ask about three critical factors:

Factor 1. How good is your customer service? How many reps do you have and how quickly do they promise to answer questions?

Factor 2. How easy is this for my creative department to learn how to use? How many hours of training does it take? Do you offer best practices based on ads that got the best measured results (vs. "fun creative")?

Factor 3. What metrics do you have on campaigns you've run in the past nine months with this technology? What results have real-life clients gotten and what benchmarks do you recommend we shoot for?

Below you'll find profiles of the top six vendors (in alpha order). These are in their own words, slightly edited by us to cut overt sales pitches.

DoubleClick http://www.doubleclick.net
Contact: Jenny Connorton jconnorton@doubleclick.net

Brief Description DoubleClick's DART Motif (TM) is a solution for creating, trafficking, deploying, and reporting on rich media ads. Created by integrating Macromedia Flash MX 2004 with DART ad management solutions, DART Motif enables users to simplify and save time at every step of the rich media process.

Price DART Motif is priced on a CPM basis. Rates vary based on volume and financial commitment.

Turnaround Time Because DART Motif is integrated into adserving, there is no need to rely on third parties to create and serve rich media ads. This makes the complete rich media process much faster.

Launch upon entry to page Flexible; allows the creation of multiple ad formats. It is possible to create an ad that launches on top of the page as soon as the page loads.

Launched into main session/pop window Pop-ups and/or pop-unders can be created any size in both a main session or pop window.

Affected by pop zapping programs N/A.

Pre-cached No; leverage Flash.

Obstruct content DART Motif is highly flexible in terms of the position control given to advertisers and publishers.

Need to customize Allows creative designers to convert almost anything they can create in Macromedia Flash into an ad.

Play ratios N/A.

File size Supports up to 500K files.

Time Flexible with no restrictions.

Video Yes, DoubleClick introduced Motif Streaming Video in October 2004.

Approx % of users that can view ads Over 98% of users that have a Flash plug-in installed.

Eyeblaster http://www.eyeblaster.com
Contact: Corey Kronengold, corey@eyeblaster.com

Brief description Eyeblaster is a single solution for advertisers and publishers to create, deliver, manage, and track all rich media through a common administrative platform. Products include:

Floating ads Expandable banners “VideoStrip” banners Commercial breaks The VideoClip Module (for in-stream advertising) Polite banners “Push-Down” banners Wallpaper ads Window ads.

Video available in all ad formats. Additional features available include:

Data Capture Viral Elements (send to a friend) User Polling Dynamic Data Behavioral-based ads Eyeblaster Brand Test powered by Dynamic Logic Bandwidth Detection Frequency Capping Browser, OS, and screen resolution detection video delivered via SmartStream progressive download or true streaming with Flash Communication Servers. Support for Flash Video, Windows Media Video, and Real Video.

Price CPM-based pricing model, ranging from $1-$5 CPM, based on ad format.

Turnaround time The Eyeblaster platform enables all parties involved in the rich media process -- media buyers, web publishers, and creative agencies -- to work concurrently within the same interface. So, unlike other rich media providers, the Eyeblaster does not "build the ads" for the clients. We also have a creative services department to help advertisers.

Launch upon entry to page Yes; ad formats can launch when a user arrives at a page. Eyeblaster's Polite technology allows a Web page to fully load before loading additional ad content, ensuring a smooth user experience.

Launched into main session/pop window Yes; they have in-banner, out-of-banner (floating) formats, as well as in-stream video ads (VideoClip) and "window" ads, which launch a separate browser window.

Affected by pop zapping programs Only formats that launch a new, independent browser window are affected by pop-up blockers.

Pre-cached Ads are stored in the computer's cache; not all of ad formats are pre-cached before playing them. Eyeblaster offers progressive downloading as well as True Streaming from a streaming server.

Obstruct content Some do depending on the format and creative.

Need to be customized for different sites Ads must meet a publisher's specific specs. Most ad formats are IAB compliant. (See link below to IAB specs.)

Play ratios 2:1-3:1 depending on ad unit, frequency capping, etc.

File size Up to 2.2 MB.

Time Flexible; they work with all specs.

Video Eyeblaster offers video in all of its ad formats. Additionally, the company offers video-specific formats including the VideoClip Module, an in-stream video advertising solution, as well as the recently introduced VideoStrip format, which delivers a complete banner with end-to-end video.

Approx % of users that can view ads Between 90%-95%. It depends on the version of Flash that the user has installed. The majority of our ads can be viewed on Flash 5 and up. Video is offered in Flash, WMV, and RealMedia formats. Eyeblaster ads cannot be viewed on MACs.

Klipmart http://www.klipmart.com
Contact: Chris Young, CEO, cyoung@klipmart.com

Brief description Klipmart is the largest provider of online video delivery and management services to publishers, agencies, and marketers offering a turnkey solution to create, deliver, and manage online video advertising.

Price $3.00 CPM includes The Full Screen Experience (TM).

Turnaround time three to five business days dependent upon receipt of all creative assets and complexity of campaign.

Launch upon entry to page Yes. KlipAds are web-based in page units the technology loads as the ad unit itself loads.

Launched into main session/pop window Preferably into page-based units; has the capability of serving via a pop window.

Affected by pop zapping programs No; served as in-page units.

Pre-cached Can be.

Obstruct content No; ads play within existing ad units.

Need to be customized for different sites Yes; each ad unit is custom.

Play ratios 1:1.

File Size Dependent upon campaign but typically a light initial load followed by the video stream.

Time Most initiatives are :10, :15, or :30 spots; additional time can be negotiated.

Video Yes. Our specialty.

Approx % of users that can view ads N/A.

PointRoll http://www.pointroll.com
Contact: Mitch Rose, VP Marketing, mrose@pointroll.com

Brief description PointRoll enables advertisers, agencies, and online publishers to measurably increase the impact of branding and direct response campaigns without disrupting the user's online experience because the technology is user-initiated.

PointRoll's proprietary technology platform delivers a suite of rich media products including:
FatBoy™ expanding ads
Tomboy™ universal 100K+
TowelBoy™ snap-back units
BadBoy™ floating ads FoldOver

The company also offers advertisers a menu of interactive features such as streaming video, data collection, dynamic data, polling, instant email, sequencing, sweepstakes, and more.

The company has a strong R&D program. In recent months PointRoll has upgraded its video platform, launched FoldOver, upgraded its AdDesigner tool to be both PC and MAC compatible, and launched new features such as Polling, Reminder, and Sequencing.

Price PointRoll's standard rate card starts at $5 CPM, which can be discounted based on volume and commitment for qualified publishers, agencies, and advertisers.

PointRoll technology is included at no additional charge on over 30 leading publisher sites including Yahoo! and AOL as part of the proprietary Included (TM) Program (subject to publisher eligibility).

Turnaround time Launch upon entry to page: PointRoll technology is page-based with a 1:1 load. FatBoy is user-initiated, TomBoy exists within any real estate on any page, TowelBoy is pre-expanded upon page entry, BadBoy floats upon page entry, and FoldOver is user-initiated.

Launched into main session/pop window Page-based only; PointRoll NEVER pops a new window.

Affected by pop zapping programs No

Pre-cached In most cases, no.

Obstruct content No.

Need to be customized for different sites No, but we do allow.

Play ratios Page-based, 1:1.

File size Not a single file, initial download is light but varies according to ad type.

Time Within two days.

Video Video is supported within all of our products. Format is technology agnostic: works with Flash, real Player, Windows Media Player, QuickTime. Also, PointRoll technology will detect up to six different users speeds and deliver the optimal video.

Approx % of users that can view ads Approx 90%.

United Virtualities http://www.unitedvirtualities.com
Contact: Natalia Scalia nscalia@unitedvirtualities.com

Brief description United Virtualities offers a variety of rich media formats that are user-friendly and require no downloads to launch and play.

The current product lineup includes: Shoshkele™ Shosh Under Shosh Banner Shosh Brake ShoshTV Ooqa Ooqa™ The branded, contextual browser ShoshTVHD™ Yachne™ The avatar-based communications tool Shvitzer™ Intelligent Highlighter Shoshmosis™ Poonkt™ Contextual search tool.

UV continues to heavily reinvest in R&D to create and rapidly deploy new online marketing solutions. 20% of the company's workforce is devoted to Quality Assurance to provide great customer service.

Prices Shoshkeles, ShoshTVHD, Shoshmosis: $2- $5 cpm Ooqa Ooqa: $12 cpm Yachne: Project-based Shvitzer: Revenue-sharing program Poonkt: Project-Based.

Turnaround time Depending on complexity of project, can be same day.

Launch upon entry to page Optional, up to the client and the site.

Launched into main session/pop window Main session by default; pop-ups can be incorporated.

Affected by pop zapping programs No.

Pre-cached Optional, up to the client and the site.

Obstruct content Optional, up to the client and the site.

Need to be customized for different sites Yes.

Play ratios Depending on the products. Shoshkele Product Suite more than 70%. Ooqa-Ooqa approximately 70%.

File size Depends on the product, the client, and the site.

Time Depends on the product, the client, and the site.

Video Yes.

Approx % of users that can view ads 95%.

Viewpoint (formerly Unicast) http://www.viewpoint.com
Contact: Allie Savarino, Marketing, asavarino@viewpoint.com

Brief Description We are committed to offering every kind of video and rich media format the market demands; making planning, execution, and measurement as simple as possible and becoming your most trusted partner. Products can be delivered in either pure Video or Flash.

Products include: Unicast Transitional Unicast In-Page and Unicast Over-the-Page.

Price Varies depending on format.

Turnaround time Quick -- in some cases less than 24 hours.

Launch upon entry to page Host- or user-initiated based on client/publisher.

Launched into main session/pop window Only Transitional Flash units are launched in a separate window. All other units are part of the main session.

Affected by pop zapping programs No.

Pre-cached Yes -- Viewpoint can pre-cache 20% up to 100% of video ads using our proprietary client-side system. Ads are accessible across publisher placements for the ultimate user experience.

Obstruct content Depends on the format.

Need to be customized for different sites No.

Play ratios 1:1 play ratio for all ads.

File Size All file sizes are IAB compliant.

Time Any standard format, or can be customized. Viewpoint recommends animation time of :15 seconds or less for Flash and :30 seconds or less for video (with user controls).

Video Can offer up to full screen without compromising quality. Offer the only clickable pre-roll/post-roll video solution supported by both Real & Windows Media Player.

Approx % of users that can view ads 97% through our unique cascading content ad serving system.

Useful links related to this article

"Attack of the Rich Media Clones" Great ClickZ article by Zachary Rodgers comparing and contrasting the various rich media vendors http://www.clickz.com/features/insight/article.php/3488841

Broadband penetration data http://www.websiteoptimization.com/bw/0503/

IAB's rich media guidelines for advertisers and publishers (revised Fall 2004) http://www.iab.net/standards/richmedia.asp