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Rich Media Ads a $1+ Billion Category in 2005

Kagan Research forecasts the rich media segment to be the fastest growing component of Internet advertising over the next 10 years, powered by a steady stream of new wrinkles.

Rich media integrates multiple elements, such as animation, sound, video and interactive games or tools in a single advertisement. Examples abound such as the screen appearing to fill with water, a moving element that floats, an element that expands, a small live video window and a flashing image.

Christian Anthony, Chairman and Co-CEO of interactive ad agency Special Ops Media, attributes the expected boom to several factors. There's more standardization of audience measurement data making rich media buys easier to justify, creatives relentlessly break new ground, and advertisers use such ads as small test labs.

Interaction rate is the percentage of audience that engages the ad. Given the tracking technology used by websites and ad servers, most consumer activity is monitored, unlike analog media such as broadcast TV where only a small audience sample is actually measured to estimate larger consumer activity.

Thus, the rich media granular detail includes how much time consumers engage an ad, engagement levels at different parts of the day, length of time spent viewing an integrated video short film and so forth. The flashy rich media ads can be used for building general brand awareness, for commerce such as couponing using the interactivity or can use both in the same ad.

Kagan forecasts that rich media -- a $1+ billion category in 2005 -- will climb at a hefty 16+ percent compound annual growth rate 2006-2015. That's tops for the eight web categories standardized by the Interactive Advertising Bureau. The second fastest growing category going forward is search ads in Google and other search engines.

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