A History Lesson

When it comes to business models, rich media technology vendors have always faced a chicken and egg problem. In most cases, at least some form of integration is required on the site side. This integration is fairly straightforward (a line of javascript code built into the page that will house the rich media ad) but it can be more extensive and does require testing. Without the pressure of a real campaign on hand, few ad operations technicians were interested in incorporating and testing new lines of code on their sites in hopes that an eventual campaign would materialize.

Media buyers on the other hand are wary of recommending technologies unless there is a significant reach of the technology already in place. They also balk at paying extra CPM fees to technology vendors, fees that sometimes amount to more than the media itself. So what’s a technology vendor to do?

The first model that many vendors tried was to partner with publishers to “resell” the technology. Vendors could leverage the large sales force available to the media seller and sellers could mark up this cool new technology as added service to their advertisers. Unfortunately, this model was a dismal failure. Media sellers were not trained in selling “rich media” and media buyers still balked at paying extra fees for something that seemed expensive and of dubious value. Sellers went back to selling standard banners, and all of these great rich media partnerships languished at the bottom of the rate card. These partnerships made great press releases but resulted in few sales.



Then around 1999/2000, one vendor developed a successful working business model that has been replicated, with little alteration, by every rich media vendor since.

Partnering with a select group of publishers in strict verticals, the company got out of the chicken and egg problem by actively promoting their technology and the publishers that integrated it directly to agencies and advertisers. Instead of the publisher selling the technology, the vendor sold the publisher. And instead of tacking on a special fee for the rich media, the vendor charged the publisher a CPM charge every time a campaign was sold instead of the agency (a subtle difference since the effective CPM charged to the agencies was the same in either case, but an important one since the fee was now one media cost instead of two: one for media and one for “rich media”).

A number of results resulted from this shift. For one, the rich media market stabilized and consolidated (a process which is still ongoing). Those vendors who had the resources to take this approach began to dominate the scene. Rich media became easier to use, more reliable, and began generating case studies that proved its effectiveness. But there was a downside. For one, as the market consolidated, fewer types of rich media ad platforms became available: gone were the Comet Cursor, Sticky Networks, Epod, V-banners, and Thinking Media ad types.

The other major downside was that a power shift occurred, which put more power in the hands of the vendors, and less in the hands of the publishers. As agencies began to demand that publishers support a handful of rich media types (and since vendors oftentimes controlled the relationship at the agency level) some publishers began to feel a loss of control. For many publishers, what began as a partnership now seemed an obligation and a burden. In addition to the CPM charges, they were often charged setup fees that could not be charged back to the agency. And more importantly, as rich media took off, many publishers felt less and less in the creative loop with their agencies, having relinquished a creative partnership role to the vendors. Having made their deal with the devil, some publishers began to look for a loophole.

Recently, a few new vendors have appeared on the horizon with technology that is aimed directly at this problem and the need that many publishers feel. These new technologies are, in effect, toolsets that are designed to allow publishers to develop their own rich media solutions and take back control of a relationship they had relinquished. These new toolsets hope that they will allow publishers to go beyond the limitations of rich media ad types available while at the same time maintain stability, consistency of service, and help publishers lower the cost to support rich media.

Two of the major players in this space are Checkm8 and AdInterax. Both companies offer unique services and a plethora of rich media types that can be mixed and matched by the publisher and controlled and managed by the agency. Next week, we'll dive into Checkm8 and the week after focus on AdInterax to see how these technologies work, the services they offer, and how publishers and agencies are hoping to use them to their advantage.

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