• by Ross Fadner , May 11, 2004

As ad budgets for streaming campaigns on the Internet increase, marketers' spending on TV and print will decrease--sooner rather than later, according to marketers, publishers, and digital media research professionals who gathered Tuesday at the Streaming Media East conference in New York City.

Conference attendees discussed streaming media's coming of age and the effect it will have on the way marketing dollars are allocated in the not-too-distant future. "So far, we've largely stolen from print budgets," noted Karim Sanjabi, executive vice president of creative and technology, Carat Interactive.

Hal Trencher, national sales director, sports and broadband, Yahoo!, acknowledged that "streaming broadband is only just pulling up its chair [to the media table]," but Trencher claimed that even now, "streaming is not an afterthought at all."

Added Trencher: "I think there's clearly a movement being initiated by agencies and clients to look for broadband advertising to work with traditional ad mediums [in ad campaigns]. It's just starting. It will scale as we scale."

Trencher added that money will come "first and foremost" from network TV budgets. "It's the responsibility of Yahoo! and other publishers to host these ads and show quantifiably that [broadband video] does work," he said. There is plenty of room to "tap into the $9-$10 billion television market," especially as younger generations continue to spend more time online, he stressed.

While most agreed with this assessment, Steven McBride, managing partner of interactive agency VisualMax, pointed out that according to JupiterResearch, only about 3 percent of the marketing budget is currently allocated to streaming [media]. McBride noted that low budget allocations for streaming media can be attributed, in some cases, to cost and limited publisher support of the technology.

EarthQuake Media chairman and CEO Robert Davidman added that the onus is on marketing professionals to facilitate the process of integrating streaming technologies into the marketing vernacular by eliminating the idea of traditional versus online marketing. "The mistake a lot of marketers make is they silo [different media]," he said.

VisualMax's McBride added that cross-media campaigns are becoming increasingly more prevalent. "There are no longer many web-only efforts or standalone TV campaigns," he said.

However, each of the panelists noted that in terms of streaming ads, cross-media campaigns should not simply mean the repurposing of television commercials online. "It's like taking a magazine ad and slapping it on a billboard," said Carat's Sanjabi of repurposed TV ads. He said that marketers need to take advantage of the added features afforded by broadband technologies like feedback and interactivity. Sanjabi mentioned the recent Jerry Seinfeld-Superman webisodes for American Express by Digitas and Ogilvy & Mather, and Crispin, Porter + Bogusky's, engaging subservientchicken.com site for Burger King as two good examples.

Each panelist said feedback is a crucial element to the future growth of streaming video as an ad medium. Dynamic Logic marketing director Christina Goodman highlighted a recent Dynamic Logic study on interstitials that revealed how audio and video significantly increase purchasing intent, and annoy consumers less than television commercials. EarthQuake's Davidman added that feedback has shown that people accept and enjoy good creative.

Yahoo!'s Trencher noted that feedback is crucial in guiding publishers. For example, on the Yahoo! Sports Fantasy pages, consumers were annoyed by Unicast interstitials--they said the online units detracted from their experience. As a result, Trencher said Yahoo! learned that interstitials were inappropriate for that particular category, so it stopped running them.