• by Ken Liebeskind , October 2, 2002

Crowds were sparse at Streaming Media East, the three-day trade show that started yesterday in New York, with attendees saying it was half the size of last year's show and less than a quarter the size of shows a few years ago, when the Internet was peaking.

The small crowd reflects the state of streaming, which is struggling to get off the ground. "The technology has outpaced advertiser desire to push the envelope," Nick Johnson, CNN Interactive's vice president of business development, said. "The challenging environment stifles innovation."

Johnson spoke of CNN's partnership with RealNetworks, which is generating revenue by providing streaming content for Real's subscription service, but "the advertising opportunities are not that robust."

Streaming is struggling partly because of the slow economy and partly because of its own problems, such as slow broadband penetration, which was discussed at the show. Another problem is demonstrating the value of streaming advertising, with the medium still unable to generate the kind of data that convinces advertisers to devote more of their budgets to it. Matt Feinberg, senior vice president of radio at Zenith Media, says he can buy streaming impressions just like he can buy other media units, so streaming has become readily buyable. But that doesn't mean advertisers want to buy it.

Of course, there was plenty of upbeat news at the show, from streaming providers, publishers, and agency executives and media buyers who plan and buy streaming for their clients. Susan Bratton, CEO of Cendara, a rep firm, moderated two afternoon panels, the first offering an overview of streaming, the second providing a look at some successful streaming campaigns, which Bratton referred to as "eye candy."

Among the issues discussed in the first session was the rise in the streaming of TV commercials, made possible by the resolution of rights issues. With that issue cleared up, streaming video is surpassing streaming audio, according to Matt Wasserlauf, vice president of sales at The FeedRoom.

The FeedRoom doesn't just stream TV commercials, it streams infomercials, running one for a pharmaceutical client next to related health content from NBC News. "Now you can do longer interactive broadcasts," he said, suggesting they are a new form of streaming advertising.

Another issue discussed was the use of third party providers. Some sites apparently refused to use them initially, but now their use is growing with Unicast Superstitials and EyeWonder as the leading players.

Bratton was eager to know how much is being charged for streaming, and after hemming and hawing, a few of the session participants offered the numbers, with CPMs ranging from $7 to $40. Radio CPMs are the lowest, with streaming ads targeted to b2b sites the highest. There is a $5 surcharge for third party ads.

The eye candy on display in the final session included a 15 second Warner Bros. ad at atomfilms.com that prerolls a film. The ad generated a 10 to 25 percent click through. A BMW spot produced by helloNetwork started as a banner and could be clicked to a larger size that takes up about 70% of a page. It ran on 15 sites, including Wsj.com and Businessweek.com. Wasserlauf showed the Nexium infomercial he had mentioned in the previous session. John Vincent, CEO of Eyewonder, showed a Diet Coke commercial that played in a banner and could be enlarged. It ran at Yahoo! and ten other top sites for 10 days earlier this year, produced 25 million impressions, and is probably the best example of how streaming advertising can be successful.