• by June 13, 2002

StreamingThe Killer App for Ads? by Adam Bernard, MediaPost Staff Writer From advertising to entertainment, streaming media is currently being used and experimented with in quite a lot of ways. A recent study conducted by Market Decisions Corp. showed that one in four companies defined as “large enterprise businesses in the United States” are currently using streaming media in their organizations in some way. The study also showed that streaming usage has doubled in the past 18 months. Statistics like that are bound to make streaming media companies optimistic. “I think streaming on the web is growing, and getting stronger and stronger,” says Blair Lyon, President of TMXinteractive, a rich-media email company. But it’s important not to overestimate that strength. Jay Stevens, Director of Marketing for Radical Communication, points out, “I think it’s really just beginning. People are beginning to adopt rich media.” Stevens said Radical Communication, whose flagship RadicalMail allows for streaming audio, video, and animation, is seeing a significant increase in the level of activity quarter to quarter. John Vincent, CEO of EyeWonder, feels that most of the technology and ad industry’s current involvement with streaming is more exploratory than business-oriented. He says that 25% of the demand is actually placing business, while 75% is “aggressively trying to understand how to leverage the technology.”

So what’s the best use of streaming right now? Opinions vary. Scott Bennett, Senior VP of Sales and Marketing for IT Network, says, “I don’t know if there is a killer application. It’s a matter of hitting a bunch of singles.” Bennett does admit, however, that 80% of the content requests his company receives are in the entertainment sector. Radical Communication’s Stevens agrees, saying, “The best use depends on the audience, and the application. People are still trying to figure out what works, just like in the early days of television, when people would read from paper like radio announcers. It took a while to see what worked.” TMXinteractive’s Lyon notes, “The future will need more improvement in the hardware area and bandwidth, and be more in a leisure-type format. It needs to hit a critical mass, a combination of culture, hardware, bandwidth, and learning how people act.” Stevens expects the entertainment side of things to really get big in a few years, but says that will probably be in 2003–2004, when the technology gets better.

What role does advertising play in all of this? Streaming media ads have been shown to deliver five times the click-through rate of a traditional static banner ad, according to a recent Measurecast/Yankee Group study. Furthermore, 65% of agencies that have tried steaming media report that they will recommend it to their clients in the next 12 months. Vincent openly says that advertising will be the best use for streaming in 2001–2002, and Stevens feels that email will migrate to HTML, making it easier to use targeted streaming ads. Stevens’ company, Radical Communication, has just entered into a partnership with DoubleClick to deliver rich media and interactive email.

Despite saying advertising is where the money will be in the future, Bennett sees a potential problem arising, saying, “I see consumers paying a premium to be ad-free.” Products like AdSubtract filter out ads, and some websites are offering their members subscription services that allow access to an ad-free version of the site. Recently, Salon.com came out with an ad-free service (for a charge), and other sites are considering the option. 1Wrestling.com recently posted a letter to readers apologizing for the number of ads, and asked if a paid service for an ad-free site would be something the readers would go for. How much of a threat this young concept actually is will be revealed over time. If streaming is to become advertising’s killer app, the door to success will almost certainly hinge on how intrusive these ads are. Vincent feels mute-ability is a concept that should be incorporated into every streaming ad, saying “you can mute your TV, so you should allow a consumer to mute your ad.” He realizes this is a disadvantage, but something ads need to have.

WirelessIndustry Waiting to Serve by Adam Bernard, MediaPost Staff Writer Wireless has long been promoted as the next big thing in advertising. But is it really? Since Nostradamus isn’t available, going straight to the source is the only way to find an answer to the burning question of “what will the wireless future bring, and when?” After speaking with four of the top advertising companies, the only coherent answer is “eventually.” Although many companies are doing wireless advertising today, America is still lagging far behind many foreign markets. Scott Ferber, CEO of Advertising.com, notes that this is because the U.S. needs some standards when it comes to wireless. “It takes time. We need all the groups to agree on a standard.” Ferber adds, “It will take five years for a decent-enough-sized penetration to say ‘wow, wireless is here.’”

Jamie Byrne, director of strategic development for DoubleClick, would agree with this statement, as he says DoubleClick is going to focus on building the technology for when the wireless market develops. So when there is a demand, DoubleClick will be able to serve. SkyGo is another company that agrees that America is still very young in its wireless life. Daren Tsui, CEO of SkyGo, noted that while other countries are already at 70% wireless penetration, America is only at 35–40%. America is also still mostly analog, with only 4–5 million cell phones actually having Internet accessibility. Ferber adds that another problem with wireless in America is that Americans don’t see small-screen surfing as useful. Until a realization that one can actually navigate the web on a small screen, there isn’t going to be a whole lot of use advertising on one.

That being said, there are still companies that are making a huge push into the world of wireless advertising today. WindWire, for example, launched their wireless advertising service in October of 2000, deeming it “First to Wireless.” Most recently, WindWire worked with the Carolina Hurricanes of the NHL (the team formerly known as the Hartford Whalers) on a ticket-sales campaign. David Wilson, executive VP of marketing and business development for WindWire, says that campaign, which was done in Virginia and the Carolinas, netted a 15% call-through rate and a 910% return on investment. ESPN.com and Chevy trucks just recently teamed up with AT&T to do an NCAA Tournament promotion, and ShareSpan, a provider of outsource wireless messaging services, recently reached the 250 affiliate partner mark, doubling their customer base in only 90 days. This shows wireless advertising has started, but it still has a long way to go before it reaches the lofty goals set for it by 2005. Jupiter has already said that they expect to see 95 million web-enabled cell phones by that year. That’s a jump of over 90 million from the number of web-enabled cell phones in America today.

One concept that is universally agreed upon is that everything dealing with wireless has to be permission-based. This leads to an interesting definition of advertising. Is it truly advertising if someone is asking for it? Well, yes. The kinds of ads that wireless will end up having are reward- and incentive-based messages. A common concern among these companies is how to define wireless. Byrne feels there should be a segmentation of wireless, due to the differences in devices. According to Byrne, PDAs (such as Palm devices), phones, and pagers should all be treated differently, and companies should have a different response to each segment.

iTV‘Walled Gardens’ Worth Watching by David Cotriss, Contributing Writer TV advertising is changing, slowly but surely. As the media world becomes increasingly fragmented, media buyers and planners must find new and innovative ways to give their clients more bang for their buck. Interactive TV (iTV) will likely play a role in this. Major advertisers including Nike and American Airlines are already using the technology to enhance their ads. Product information, samples, coupons, and sweepstakes entries are but a few of the possibilities, not to mention the ability to track response rates quantitatively. According to recent figures by Jupiter Media Metrix, households signed up for iTV services will grow at an annual rate of 83 percent through 2005, and by next year 17 percent of U.S. TV viewers are expected to adopt iTV services. Media professionals will want to keep an eye on these “walled gardens” in the years to come, which are shaping the nature of interactive content and marketing. In a manner similar to the AOL model, viewers see a certain screen when turning on their TVs, and the destinations available to them on the screen are made available through partnership and advertising deals. Placement on such TV portals will likely be a primary way to reach iTV viewers.

Three major players—Wink, RespondTV, and CommerceTV —along with a host of other firms and ad agencies, are leading the charge. La Quinta, CA-based Thane Inc., a leading direct-response and retail-marketing firm whose products are sold in over 80 countries, announced an agreement with Wink Communications, by which Wink interactive television enhancements will be added to direct response short-form and long-form advertisements for many of the products marketed by Thane. Wink’s enhancements will create a call to action and allow viewers to immediately request additional information or order products by simply pressing a button on their remote control. Leading business news provider CNBC also announced an extension of its agreement with Wink to provide on-demand interactive enhancements for both programming and advertising on the network. Viewers are able to watch CNBC Business News live while simultaneously accessing on-demand customized financial information and stock quotes, and they can purchase merchandise or request information through interactive ads. Wink’s technology is currently available to nearly 2.5 million satellite and cable households in North America.

RespondTV has forged relationships with Hewlett-Packard and Catalina Marketing to expand upon the unique functionality of iTV for direct marketers, advertisers, and programmers. As a result of RespondTV’s work with HP, viewers can print information, such as a recipe or how-to instructions associated with the interactive advertisement or program, directly from their television sets. Catalina and RespondTV will provide a targeted iTV advertising and paperless couponing system. TV viewers can use their remote controls to receive product discounts using their local grocery store loyalty cards.

EmailRich Media to the Rescue by Susan Breslow Sardone, Contributing Writer While many major marketers have switched from sending text to HTML email to engage customers and prospects, “The big trend is the increased usage of rich-media email,” says Ben Isaacson, executive director of the Association for Interactive Media, a subsidiary of the DMA. It’s arrived just in time, as responses to standard email missives are declining. The Industry Standard notes: “Over the past year, the average click-through rate on an email ad has dropped by half, to around 5 percent.” “There is more email in the mailbox,” Isaacson admits. “But response rates for rich media are increasing. Up to five times [the average rate] in some cases. Of course, it varies from campaign to campaign and reflects permission levels.” And talk about viral: “I’ve heard forwarding rates of up to 75 percent.

“There are four or five big players in the development game, and more companies are popping up every day,” Isaacson continues. “The leader is Radical Mail in Los Angeles, which uses technology to send what looks like a 30-second TV spot.” Clients that have deemed the company right for their marketing and communications efforts include Microsoft, Nickelodeon, and the Republican National Committee. Saks Fifth Avenue recently treated its opt-in list to an exceptional rich-media email: a virtual Mother’s Day Gift Guide. San Mateo-based Digital Impact, which Isaacson identifies as an innovator, was behind the effort for the specialty store. Extending Saks’ “Live a Little” campaign theme, it embedded audio, animation, and a Flash movie. A viewer desiring any of the lingerie, fragrances, or other Mother’s Day gifts displayed in the email could click through to its transaction page on the Saks website. Another Isaacson pick, Pennsylvania-based TMX Interactive, has its own celebrity spokesperson touting the company’s rich-media email advertising products: Shannon Sharpe, from the Superbowl-winning Baltimore Ravens. Under the agreement, Sharpe wears TMXInteractive logo apparel during his TV and personal appearances. TMX Interactive clients include Bobbi Brown Cosmetics, Calvin Klein, and Armani Exchange.

Gizmoz rich-media emails are scoring points on their own. The New York City company helps clients create messages that can hold a variety of media—real audio and video, MP3, Shockwave, QuickTime—inside a Java applet only 14k in size. When a Gizmo arrives, it creates a smart envelope for itself, called Gizmoz Collector, on the recipient’s desktop. The Collector’s eyeball icon blinks to indicate the arrival of subsequent material. Particularly viral, Gizmoz can be re-sent via email, through ICQ, and copied onto websites. In May, Toyota dispatched 250,000 Gizmoz to a prospect database that had opted-in for SUV information. The Flash presentation compared Toyota’s 2001 models, and featured 360-degree tours and links to local dealers and finance information. In June, new Gizmoz were launched for Eonline! and CBS Sportsline, whose units will update baseball news and scores. To help media planners stay at the top of their game, the Gizmoz account management center enables clients to track campaign performance through in-depth data and comparative metrics.