As the Internet matures, online content has become more dynamic, and consumers and advertisers alike are taking notice. According to several recent Internet studies and other market indicators, a bright branding future awaits marketers and producers of multimedia for the Web. But don’t trade your TV budget for a streaming one just yet. The broadband wait isn’t over. The good news is that a study released last month by New York-based Arbitron and Edison Media Research in Somerville, N.J., shows a rise in streaming media consumption, an increase that goes hand-in-hand with a jump in broadband connections in the home.
The report says these so-called streamies—users who watch or listen to Webcasts online—now represent 44 percent of all Internet users and 27 percent of Americans overall.
Similarly, Nielsen//NetRatings purports that the number of users with high-speed connections at home reached 12 million in December 2000, up 148 percent from December ’99. As well, streaming media is a chief incentive for consumers who sign up. (Nielsen// NetRatings is owned by SHOOT’s parent company, VNU.)
Further, New York-based Web research firm Media Metrix reports that 99 percent of U.S. home computers have a streaming media player such as the RealPlayer or Apple’s QuickTime. Despite this ubiquity, Media Metrix executive VP Steve Coffey says, "growth of consumers’ usage is flattening. To close the gap between what people can do and what they actually do, the industry must continue to develop content and better delivery systems."
Demographically, streamies are just what marketers are looking for. Compared to their non-streaming counterparts, streamies spend more time online and are twice as likely to make online purchases. They also are more likely to be employed in an upper-income bracket, as well as to be well educated.
The rise in streamies comes even despite a dip in the overall amount of time people spend online. The Arbitron report—the latest installment in a series issued every six months—attributes the plateau in Web usage to a decrease in TV advertising by dot-coms. In this climate of e-casualties, gone are such stunts as Outpost.com’s high-velocity hamsters, seen in the high-profile ad "Cannon," out of Cliff Freeman and Partners, New York, and directed by John O’Hagan of bicoastal/ international hungry man. Those types of spots, which may not have defined a brand, did, for the past two years, propel people from couch to computer.
Other highlights of the study include the finding that one-third of Americans would sacrifice their televisions if forced to choose between the ‘Net and the Tube.
Meanwhile, another study released last week polled 100 senior ad agency executives and found them optimistic about the future potential of streaming media ads. The Advertising Agency Streaming Media Awareness Study, conducted by the Yankee Group, Boston, and Portland, Ore.-based MeasureCast, found that nearly two-thirds of responding agencies have recommended streaming media to their clients in the last year, and are likely to do so again in the next 12 months.
"The most interesting thing," says Bill Piwonka, VP of marketing at MeasureCast, "is it shows that streaming media is on the agency agenda."
In fact, the study shows that the primary obstacle in adopting streaming advertising is client perception that costs are too high. Just what is the going rate for streaming spot time, exactly? "I don’t know," says Piwonka. "I’ve heard everything, but my gut says that it’s between twenty and forty CPMs [between twenty dollars and forty dollars per thousand users]."
The timing of the study couldn’t be better, as a dismal average click-through rate (CTR) of less than one-half of one percent industry wide hints that banner ads are past their prime. Moreover, Piwonka says, banners and buttons don’t convey branding messages. "People have taught themselves to ignore the periphery of the screen," he notes. "But with audio and video you know you have the consumer’s attention."
In spite of the lackluster performance of banner ads, Seattle-based AdRelevance, which tracks Web ad trends, says Internet advertiser spending in the first quarter of ’01 is up 28 percent from the same period a year ago. And USA Today reports that the online ad industry saw a 52 percent rise in revenue, to $2.9 billion, last year.
But the potential of streaming ads could be a bit premature in terms of its relevance to the spotmaking business. While Web audio has been embraced by the masses—the wars over music-sharing service Napster evidence that—streaming video hasn’t made as much noise. According to the Arbitron report, video streamies represent 20 percent of those online, or less than half of all streamies. It’s easy to see why. Digital music files are comparable in quality to a CD. But, really, how compelling is the blurry, post card-sized video stream most users receive?
The Yankee Group study doesn’t differentiate between audio and video streams, so it’s unclear just how relevant broadcast-style Web ads are in the minds of agency execs, compared to audio ads. And Piwonka admits that audio has taken an early online lead. But he also believes the TV-type Web spot will catch up; it’s merely a question of time and bandwidth.
At least one company, Seattle-based RealNetworks, is convinced of this—and one would hope so, given that the firm is a leading provider of streaming software. Back in November the company claimed "stellar" results for its month-long streaming ad campaign, which had an average CTR of more than five percent. The RealFlash enhanced ads were created in-house and were delivered, tracked and optimized with Seattle-headquartered Avenue A’s Atlas digital marketing technology suite. According to Shelley Morrison, VP of media and distribution sales at RealNetworks, "Streaming media ads combine the best of TV brand advertising with the best aspect of the Web: direct response."
Piwonka also underscores that best-of-both-worlds advantage. "Unless you’re McDonald’s and it’s nine a.m. and you can guess that people will drive by on their way to work, there’s little opportunity for direct response in traditional media," he observes. "The number one advantage for streaming is branding opportunities, but you can’t forget the opportunities for direct response that come along with it."
Timing is another advantage, as the Web is very much an office medium. "It’s the guys in ties" who access streaming content between nine and five, Piwonka says—a window that’s generally closed to TV and radio advertisers, at least for that demographic.
The bottom line is that opportunity is knocking. The question is: When will the door swing open wide? Despite the encouraging signs, T.S. Kelly, director of Internet media strategies at Nielsen// NetRatings, cautions, "Improvements in quality … must continue if streaming consumption is going to become as commonplace as broadcast or cable television." Likewise, an August ’00 study conducted by MeasureCast found that only seven percent of the online population accessed streaming media on a daily basis. In that regard, television has the Web beat, for now. c
Other highlights of the study include the finding that one-third of Americans would sacrifice their televisions if forced to choose between the ‘Net and the Tube.
e-Ads
Meanwhile, another study released last week polled 100 senior ad agency executives and found them optimistic about the future potential of streaming media ads. The Advertising Agency Streaming Media Awareness Study, conducted by the Yankee Group, Boston, and Portland, Ore.-based MeasureCast, found that nearly two-thirds of responding agencies have recommended streaming media to their clients in the last year, and are likely to do so again in the next 12 months.
"The most interesting thing," says Bill Piwonka, VP of marketing at MeasureCast, "is it shows that streaming media is on the agency agenda."
In fact, the study shows that the primary obstacle in adopting streaming advertising is client perception that costs are too high. Just what is the going rate for streaming spot time, exactly? "I don’t know," says Piwonka. "I’ve heard everything, but my gut says that it’s between twenty and forty CPMs [between twenty dollars and forty dollars per thousand users]."
The timing of the study couldn’t be better, as a dismal average click-through rate (CTR) of less than one-half of one percent industry-wide hints that banner ads are past their prime. Moreover, Piwonka says, banners and buttons don’t convey branding messages. "People have taught themselves to ignore the periphery of the screen," he notes. "But with audio and video you know you have the consumer’s attention."
In spite of the lackluster performance of banner ads, Seattle-based AdRelevance, which tracks Web ad trends, says Internet advertiser spending in the first quarter of ’01 is up 28 percent from the same period a year ago. And USA Today reports that the online ad industry saw a 52 percent rise in revenue, to $2.9 billion, last year.
But the potential of streaming ads could be a bit premature in terms of its relevance to the spotmaking business. While Web audio has been embraced by the masses—the wars over music-sharing service Napster evidence that—streaming video hasn’t made as much noise. According to the Arbitron report, video streamies represent 20 percent of those online, or less than half of all streamies. It’s easy to see why. Digital music files are comparable in quality to a CD. But, really, how compelling is the blurry, post card-sized video stream most users receive?
The Yankee Group study doesn’t differentiate between audio and video streams, so it’s unclear just how relevant broadcast-style Web ads are in the minds of agency execs, compared to audio ads. And Piwonka admits that audio has taken an early online lead. But he also believes the TV-type Web spot will catch up; it’s merely a question of time and bandwidth.
At least one company, Seattle-based RealNetworks, is convinced of this—and one would hope so, given that the firm is a leading provider of streaming software. Back in November the company claimed "stellar" results for its month-long streaming ad campaign, which had an average CTR of more than five percent. The RealFlash enhanced ads were created in-house and were delivered, tracked and optimized with Seattle-headquartered Avenue A’s Atlas digital marketing technology suite. According to Shelley Morrison, VP of media and distribution sales at RealNetworks, "Streaming media ads combine the best of TV brand advertising with the best aspect of the Web: direct response."
Piwonka also underscores that best-of-both-worlds advantage. "Unless you’re McDonald’s and it’s nine a.m. and you can guess that people will drive by on their way to work, there’s little opportunity for direct response in traditional media," he observes. "The number one advantage for streaming is branding opportunities, but you can’t forget the opportunities for direct response that come along with it."
Timing is another advantage, as the Web is very much an office medium. "It’s the guys in ties" who access streaming content between nine and five, Piwonka says—a window that’s generally closed to TV and radio advertisers, at least for that demographic.
The bottom line is that opportunity is knocking. The question is: When will the door swing open wide? Despite the encouraging signs, T.S. Kelly, director of Internet media strategies at Neilsen//NetRatings, cautions, "Improvements in quality … must continue if streaming consumption is going to become as commonplace as broadcast or cable television." Likewise, an August ’00 study conducted by MeasureCast found that only seven percent of the online population accessed streaming media on a daily basis.
In that regard, television has the Web beat, for now.
