It's a Down Year for Advertising, Not for Streaming

There is report after report of ad spending declines due to the sluggish economy this year, but one area of advertising is booming. "There is a tremendous growth in stream inventory," says Paul Palumbo, research director of DFC Intelligence, a San Diego research firm.

According to Palumbo, streaming advertising is booming because of the recent growth in streaming video ads. Formerly, audio streams on Internet radio were the main streaming units. "The video market has matured relatively rapidly," he says, with ads appearing on a range of sites. Among the sites he mentioned where streaming ads have appeared are CNN.com, MSNBC.com, Filmspeed.com, WWF.com and Lycos.com. He also says they have run on sites owned by cable and broadcast networks and sports, entertainment and financial publishers.

He claims the ads that are running are mostly branding ads that are part of integrated media campaigns. "It's integrated ad packages sold during a down market. It's another avail and impression opportunity that adds to the campaign," he notes.

Traditional advertisers including package goods companies are the major buyers, including Pfizer, Absolut, Coca Cola and various automotive companies. Coke's rich media banner campaign that used a TV spot on Eonline.com, Lycos.com and Espn.com was one of the biggest and most recent streaming campaigns.

Palumbo says $138 million will be spent on streaming ads this year on about 400 sites.

MediaPost spoke with a few of the sites that have begun to offer streaming ad opportunities. Last month, Iwon.com ran a streaming campaign for the Toyota Highlander. The ad, which appeared on the home page, used an existing TV commercial. It was streamed with the Eye Wonder technology. Another streaming advertiser on Iwon.com was Paramount Pictures, which ran a one-day campaign last month to promote the release of Castaway on video and DVD. The flash animation ad showed a volleyball bouncing on the page before landing back in the banner, which could be clicked to see a film clip. The Fox TV network has also used streaming ads on Iwon.com, according to CEO Bill Daugherty.

Cnn.com is racing ahead of most other news sites, offering a variety of streaming opportunities. In the past, the company had sold streaming ads that played as a viewer called up a news story. Last month, Cnn.com began offering streaming ads that play automatically on news pages, without viewer input. They are 15-second videos that play when a page opens, then cut to a gif. Both the video and the gif are clickable. CNN.com builds the ads with Eye Wonder technology, but clients are free to use other technologies, such as Bluestreak, if they like, according to Michael Stoeckel, vice president of interactive ad systems strategies. The company has signed one major deal for the fourth quarter, but Stoeckel declined to name it.

Yahoo.com has begun running streaming ads on its home page. The first was for Disney's Pearl Harbor on May 25. Last month, it streamed ads for the NBA during the final round of the playoffs.

While video streaming ads are gaining force, audio streams continue to grow. MediaAmerica is the major player, signing up advertisers and placing them on stations streamed by the major networks, including Surfernetwork and StreamAudio. In June, it sold a major campaign to the U.S. Post Office, which is promoting small business services to a Hispanic audience. The ads will run for 17 weeks on Spanish language stations. A TV commercial is used in the ad although some stations don't run videos so visual stills from the TV spot run as banners, according to Diane Williams, general manager for streaming media at MediaAmerica. The campaign will run over a half million impressions.

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