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Rich Media Takes Hold, But Past E-Business Lessons Won't Be Forgotten

Monday, December 20, 2004

Jim Nash- InformationWeek
(Original publication: December 20, 2004)

A growing array of applications and business needs are driving acceptance of rich media, but companies once burned by the dot-com bust will cast a more skeptical eye on investments that don't directly deliver business benefits.

Growing acceptance of rich-media online advertising and content is convincing a growing number of companies--and, more important, consumers--that the static Web page will soon be as relevant as spats.

Boosters of sites brimming with full-motion video, audio, and animation have for years talked about bandwidth as the one factor holding rich media back. This year, by most accounts, broadband connections for Internet connectivity became a minimum standard for a critical mass of businesses and consumers.

So, is it time to invest in rich media? Yes.

Within companies' firewalls, training videos are being delivered to desktops without the long load times and the hiccups and freezes. Companies are marketing goods online with slick animation that adds coolness to already hot products. Membership organizations are sending newsletters with links to full-motion video of presentations. And sites such as ESPN.com and CNN.com give visitors multiple viewing options in a format that some say presages the end of broadcast television as we know it.

David Hallerman, a senior analyst at research aggregator eMarketer, says that businesses spent 37% more this year on rich media than they did last year. And while spending increases are expected to drift back to 28% next year, Hallerman says, they are expected to maintain that level through 2010. Paid-search ad revenue, by the way, once enjoyed triple-digit spending increases and next year's growth rate will have declined to just 19% over this year. He arrives at those assumptions by aggregating analyses from many research firms.

"More [execs] are finding they need to add online to their ad campaigns," Hallerman says. "There are banner ads, but, eh. So, they're turning to rich media."

Rich media's another tactic for grabbing people's attention, according to Ellis Booker, editor in chief of BtoB, a monthly marketing magazine.

"It's not a fad, but it's also not an end point, either," Booker says. One of the examples of rich media that he likes can be found on Motorola's site, where the company is selling its new Razr V3 mobile phone.

For Angelo Rossetti, president of business-networking firm Contact Advocate, rich media is a way to keep his dispersed membership interested and active. Contact Advocate's mission is to introduce businessowners to each other so they can form short-term or long-term strategic relationships.

Among the business activities Rossetti sponsors are live events with speakers and conventional networking sessions. But he also has execs form two facing lines. Everyone gets a few moments to meet the person across from him and then everyone moves to repeat this with a new stranger.

Maintaining that immediacy is important when members aren't in the same room, he builds rich-media content into the newsletters he sends to members. For example, it might be a link to video of a presentation.

Rossetti says the use of rich media helps him maintain the newsletter's average 30% to 40% open rate. It's also helped him build his company's brand. Rich media in E-mail to potential sponsors for a golf event helped him land larger sponsors than he thought he could get. It gave the relatively small Contact Advocate the feel of a larger, more-established firm, he says.

Starpulse.com, one of Contact Advocate's members, uses full-motion video on its site full of celebrity information. Rossetti cites Starpulse.com as an outfit in a crowded field using rich media to differentiate itself. He also points to Cendant Mobility, which uses video to train employees via its intranet.

Of course, not everyone thinks the market has reached its tipping point. Jeffrey Cohen, president of ImageWorks LLC, builds custom Web sites and apps for businesses and he says the majority of his midsize clients don't need rich media to build their brand or to make their sites sticky.

"I meet with executives who want a big intro when visitors come to their site. I ask them: When you come to a site with a big intro, do you click on 'skip intro?' Always, they say yeah. And this translates different for your customers how?" Cohen asks.

Too many execs, he says, already have forgotten the lesson of the bust: Invest only in what the business needs. Companies catering to kids can almost always justify rich media. A B-to-B materials vendor should probably find a better use for the money at this point.

The key words in that sentence for Accenture partner David Wolf might be "at this point."

"I don't get excited about rich media. It's what can I do with it," says Wolf, who is part of Accenture's media and entertainment practice. He points out that rich media isn't new. Movies are rich media and they've been around since about the turn of the last century.

Rich media is nothing without the infrastructure to let people view the content when and how they want to. Apple Computer's iPod and iTunes service make rich media (digital music) available and portable, he says.

Delivery technology, including better compression algorithms, is improving rapidly, Wolf says. Those gains will fuel widespread use of rich media as companies try to stay up with market expectations.

Asked hypothetically about when people might be watching sports on their mobile phones, Wolf didn't even pause: Video-to-phones is crude and rare now, but there are companies with business plans in place, ready for some funding.





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