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November 19, 2004

Can rich media overtake search before 2010?

A recent report from expects rich media could overtake search to become a dominant form of Internet advertising by the end of the decade. Although paid search continues to be the main online advertising medium, with Google's soaring stock price and SEO revenue numbers higher than expected, could rich media overtake search before 2010?

The drivers behind rich media's rise will be the swift adoption of broadband by consumers and the migration of traditional brand marketers to the Internet.

On the consumer side, eMarketer's numbers indicate that by 2005, 53% of US online households will access the Internet via broadband. On the advertiser side, Yahoo! reports that its 200 largest brand-advertising customers spent 38% more on branding ads in Q1 2004 than in 2003's corresponding quarter.

The online advertising environment is changing it is beginning to look more like traditional media every day. By presenting ads capable of swaying emotions, not just generating clicks, rich media will break down barriers and draw in large traditional advertisers.

In fact, the new eMarketer report, Rich Media predicts that rich media will overtake search to become the dominant form of Web advertising by the end of the decade.

Rich media ad spending grew by nearly 37% in 2004, and growth rates of more than 25% are projected for the next three years.

The resistance to new media is rapidly falling as advertisers learn which rich media formats work best for their goals, how to implement rich media-based campaigns and how to track the results of the online portion of their campaigns. As a result, the market is becoming increasingly valuable for advertisers, agencies and Web publishers alike.

"The single most important factor supporting rich media growth is the audience," says David Hallerman, Senior Analyst at eMarketer and author of the report. "More people are going online, they spend considerable time online and do more things there and more of them are accessing the Internet using high-speed connections that make rich media ads palatable, if not always welcome."

That the Internet is a mainstream medium, an effective place for branding-oriented advertisers to reach part of their audience, is implied in a recent Online Publishers Association report titled "Generational Media Study."

When the trade group asked 1,235 US adult Internet users to choose two, and only two, media outlets (and jettison the rest), 45.6% made the Internet their first preference. As the clear-cut second banana among the respondents, 34.6% picked TV as their first choice, with every other medium in single figures.

"While the survey reflects the fact that Internet users are making the Internet their first choice among media, it also indicates that once people get accustomed to going online, they tend to make it primary in their lives or at least secondary to television," says Mr. Hallerman.

This trend toward choosing the Internet first will continue, since more than 50% of users ages 18 to 24 made the Internet their main choice among the eight media surveyed.

Furthermore, 74% of the OPA respondents use the Internet for entertainment. That's more than for print media, and starting to approach TV levels (at 86%). The best of rich media entices its audience through being, in some way, entertaining much like television commercials.

Brand marketers not advertising on the Internet today are like their counterparts 10 years ago who failed to embrace cable television: "No thanks we find the big networks give us all the market reach we'll ever need!"

Just like you rarely hear that today about TV, most brands will soon make the Internet an integral part of their campaigns. And for brand marketers working online, the greater engagement of rich media advertising is essential.

Whether that engagement means offering entertainment, moving the audience's emotions or creating unique interactive experiences, rich media combined with targeting gives marketers tools they can't find anywhere else but online.

"Moving beyond the numbers," says Mr. Hallerman, "the implications of all this portents huge changes in online advertising, and advertising overall because the growth of online brand advertising will mean less ad dollars in other media."

Source: eMarketer

Posted by seomasters at November 19, 2004 02:35 PM | TrackBack