Rich Media’s Uncertain Value

The numbers of those who do expand the ads or actually click-through simply aren’t growing. Although rich-media ads accounted for 18 percent of global impressions in 2010, up over 9 percent in 2009, ad-expansion rates have been sliding, from a high of 4.08 percent in January 2009 to 1.32 percent in October 2010, after a slight uptick in September. Interaction rates have remained relatively flat. CTR rates have hovered at .09 percent, with automotive ads standing out at .12 percent.

According to Ari Paparo, svp of product planning for AppNexus, who has referred to rich media ads as a “tech hairball,” the trouble lies at the heart of the rich-media industry itself. Companies are investing significant portions of their budgets in an industry with uncertain and often indefinable ROI.

“At heart, the key issue that holds the rich-media sector back is that the technical foundation of these ads remains immature and fragmented, causing inefficiencies and complexities throughout the value chain,” Paparo wrote on his blog. “Rich media was invented by EyeBlaster and Unicast over 10 years ago, yet virtually no standards have emerged to govern the delivery, reporting, or effectiveness of these creatives.”

Paparo believes that because of a general lack of standards in how the effectiveness of a rich-media ad is determined, it’s easy for advertisers to be seduced by the glamour of rich media when it is difficult to find a standardized methodology of judging interaction rates, and by extension, ROI. Unlike impressions and clicks, there are no standard IAB definitions for rich-media metrics, Paparo points out.  “As a result, the interactivity rate for a PointRoll creative will be different from the same rate on a DoubleClick creative, even if all other variables are the same.”

“Building on the lack of standard metrics for rich media, very little research has been done to prove that these expensive, highly customized ads are actually more effective than simpler Flash creatives,” wrote Paparo. “However, for such a large portion of the display spend, it’s astounding to me how little justification has been done.”

Paparo sees a bright spot in the in-stream video space. “In contrast, the in-stream video world has gone from inception to widespread adoption of the VAST and VPAID standards in less than five years.” Parparo believes that when standards are established, understanding exactly which kind of rich media works best will be easier for advertisers.

According to Boaz Ram, senior manager for product planning for MediaMind, one of rich media’s biggest attractions is its ability to create innovative in-stream video ads that allow for targeting while using offline data. Brands will be able to combine the richness of TV ads with the targeting capabilities of online ads and deliver the right message to the right user at the right time, in video, with very little production hassle.” Video, Ram claims, will become a “safe harbor” for brands looking to allocate rich-media spend to a format that has established measurement standards.