Streaming Media Hits Critical Mass

In a prior life as an agency president, I not so fondly remember playing referee in a pitched battle over a phone number. At issue was the toll-free number at the end of our Sprint commercials and how long it lingered on the screen.

The creatives screamed that the story was paramount, while the client insisted on making the phone ring. I felt like the guy between Mike Tyson and Lennox Lewis at their recent press conference. In addition to walking away bruised, no one came away happy.

In the world of television, the marketer needs to choose between creating a brand-building message or a direct response spot. By superimposing a toll-free number or URL at the end of the spot, an advertiser can try to achieve both objectives, but it remains an unsatisfying outcome. So how can the brand marketer have its cake and eat it too? The answer is streaming media on the computer. It could save hundreds of agency presidents from losing their hair.

Today, 70 million people have access to broadband either from their home, office or school. More than half of the office worker population has streamed media from their desks. More than 3 billion streams of content were launched last year — an increase of more than 250 percent from 2000. Traditional packaged goods television advertisers such as Coca-Cola, Procter & Gamble and Kraft are aggressively moving to this media and have joined the automotive, entertainment and financial advertisers that were the first to this space. As a result, the Interactive Advertising Bureau has recognized the value of streaming media to marketers and has formed a committee to further educate agencies and advertisers about this powerful medium.

For some time, marketers dreamed that interactive television was the answer to the brand/response dilemma. With ITV, marketers hoped they would not have to compromise any longer. But ITV remains an early stage idea with far more potential than actual installed homes. Streaming usage, meanwhile, is exploding.

The events of Sept. 11 were a stunning catalyst for moving streaming media to the mainstream. Millions of people were compelled to stay connected to breaking news and office workers turned to their computers in droves. Video streams on news sites like, and The FeedRoom Network tripled in September. New streaming viewers realized what the millions of music, film and news junkies had already discovered. Streaming media works pretty darn well now thanks to advances in computing power and bandwidth (particularly in offices). And this new mainstream audience has returned even after the initial crisis has passed.

In any media advertisers follow a viewing audience, which in this case means they need to follow them to the computer and the streaming sites. According to Arbitron, New York, people who have streamed media on their computer spend nearly the same amount of time online each day (two hours, 11 minutes) as they do watching television (two hours, 16 minutes). For certain hard-to-reach segments like affluent, educated young men, those numbers are even more heavily skewed toward the Internet. To reach this audience with their television advertisements, marketers now have to consider streaming media as part of their broadcast plans.

For advertisers, there is a lot to like. Streaming provides the brand-action environment that advertisers have craved since the discovery of the toll-free number. Advertisements that run in a streaming environment are the sole focus of attention when they are running (you have to watch them to get to the content), they tell a story (spots typically run for 10 to 15 seconds), and they are often accompanied with support visuals and copy.

A study by Millward Brown, Naperville, IL, reported that streaming ads are five times more likely to build brand awareness than banners. “Site, sound and motion” is powerful stuff (the same “site, sound and motion” still drives a $60 billion industry called television advertising).

But the streaming environment also promotes interaction in ways that television ads never could. The viewer is just one click away from getting more information, signing up for a promotion or making a purchase. Since people who stream tend to be more sophisticated Web users, they are twice as likely to make a purchase online than their nonstreaming counterparts (according to a recent Arbitron study).

Most streaming ads are clickable or have a call to action surrounding them in the video player to suggest further interaction with the brand. From our experience, click-through rates are running at 10 times the industry average. With the right promotion in the message, we have seen rates as high as 14 percent on some campaigns. Advertisers are having their cake and gorging on it too. They even know how many pounds they are putting on, because unlike television, they know exactly how their campaign performed.

Like any new media, streaming has its doubters. Pundits question the penetration levels, complain about the occasional choppiness of streams, and contend that online publishers have not made it easy yet for advertisers to buy this medium.

The newly minted IAB Streaming Media Committee was formed to address these issues head on. The committee is now defining the scope of the streaming opportunity so media professionals can better understand the streaming universe. The group will then standardize the language, creative formats and metrics in the streaming space. Finally, it will do what the cable industry did so well in the early 1980s — educate the industry about streaming and share best practices — and give advertisers what agencies and publishers have always wanted to give them — everything.

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