The Big Production

If a picture is worth a thousand words, what’s the value of a picture that moves? Specifically, a web-delivered picture that moves at the direction of an online shopper? The latter is a loose definition of the kind of experience being served up to online consumers via fast-proliferating rich media technology, and the former is a question that online marketers are just now attempting to settle for themselves.

To demonstrate products in a way that static images cannot, in a bid for bigger sales, or simply to keep up with the competition, marketers are supplementing standard text and image in online displays with rich media. These features let the user zoom in on a product image or rotate it for a 3-D view; add to, subtract from, or otherwise alter elements of an image or graphic; sample audio clips and view streamed video right off a marketer’s web site. Rich media technology goes beyond the ability to click a button that just swaps one product photo for another to show a closer view or a different angle to support a more dynamic interactive customer experience.

From a technology perspective, drawing a tight circle around what constitutes rich media and what doesn’t is something of a debate. “The easy definition of rich media is that it allows user interaction or that it contains audio or video,” says Jupiter Research analyst Nate Elliott. That definition excludes gif and jpeg files, typically the format of static online product images. Although rich media generally provides the user with a file such as an image that he can manipulate, that’s not always the case. “You can’t define rich media simply as what the user sees or how rich that experience is. A feature that allows no user interaction whatsoever, but is created in Flash (a popular animation tool for web developers requiring a plug-in viewer that has near-ubiquitous penetration among web users) would have to be considered rich media,” says Elliott.

Such considerations make estimating the market size for rich media technology and applications a moving target. Jupiter estimates that last year, 11% of online ad spending was for ads delivered in a rich media or streaming format versus traditional online ad formats such as static gif and jpeg files or text. Statistics on the number of online marketers using rich media as content on their sites are harder to come by, though it’s a number that’s increasing as the drivers of rich media use trend upward.

One of those drivers is an increase in computer processor power. “As time goes on, the user’s computer becomes more powerful,” says Matthew Summers, president of Provis Media Group, an interactive agency based in Wilmington, N.C. “Five years ago, users’ machines could not handle this kind of content.” Though concerns about connection speed at the user end have held some online marketers back from adding rich media features best accessed through a high-speed connection, that concern is lessening as broadband penetration into U.S. households creeps up. Already, broadband Internet access is in 38% of American households, according to researchers Nielsen/NetRatings. Among Internet buyers, according to BizRate.com Inc., broadband penetration is even higher, about two-thirds.

Beyond the Wow!

In addition, the breakthrough that Intel Corp. announced last month may make consumers’ PCs virtually moving bazaars. Intel has developed a technology that communicates through optics rather than electrical impulses, promising to increase bandwidth capacity tenfold, the company reported at its Intel Developer Forum last month. It said its technology could deliver information at speeds 50 times faster than previous records, opening up a whole new market for rich media on the Internet.

But even without breakthroughs in bandwidths and speed, another driver pushing rich media into wider use among online marketers is the enthusiasm of the web development community. “Rich media is currently being defined by web developers,” Summers says. “Programmers decide to try this or that, and once people see what’s been done, they add to their own definition of rich media. They are defining what rich media is every day by building these applications.”

While there’s an undeniable “Wow” factor at the richer end of rich media—try configuring a car at one of the car manufacturer sites—marketers who believe this element alone is enough to drive real benefit from putting rich media on their site should think again, experts say.

“The Internet is a task-oriented medium. People are online because they are looking to do something—buy a car, get a date, find a product,” says Forrester Research Inc. analyst Chris Charron, who follows the use of rich media in advertising. “Any marketer who thinks consumers will be interested in watching rich media advertising like they watch TV is mistaken.”

While that may be true for rich media ads that pop up in the user’s browser in a way that the user does not control, athletic shoe manufacturer Reebok International Ltd. has found that consumers will voluntarily flock to a site—and register—if the rich media offering is entertaining enough. Reebok.com has previously streamed its TV commercials on the site, but last year’s Super Bowl marked the first time the site was tightly integrated into Reebok’s marketing efforts. That’s when a 60-second spot that ran during the game introduced Reebok’s “Terry Tate, office linebacker.” The TV spot drove viewers to Reebok.com to view a 4-minute streamed video on the same character. To see the video, site visitors had to register.

As buzz about the TV spot peaked after the game, Reebok.com was streaming as many as 20 video views per second and gathering six to eight registrations per second. Content delivery network Akamai Technologies Inc., which Reebok already was using to deliver rich media on the site, helped Reebok.com maintain a consistent performance in delivering the video streams as traffic surged. Ultimately, the video generated about 20 million views and built a database of 1 million people who’d registered as members of “Terry’s Hit Squad” to see the clip online.

What’s the buzz

Those who registered receive information and promotions related only to the Terry Tate character. Though they’ve received offers of Terry Tate gear in e-mails from Reebok containing “news” of the fictional character and links to view new Terry Tate videos on the site, Reebok does not measure the program’s success in sales, says Marc Fireman, director of interactive marketing.

“We measured impact based on buzz, film views, time viewers spent in the site. It’s all about brand impact, and people were spending on average 15 minutes with the brand,” he says. “The first year was really a program to build buzz around Reebok to drive people back to the site, build brand recognition and get them to register so we could keep talking to them.”

This year, Reebok didn’t run a TV spot during the big game, but it did create a new 4-minute video around the Terry Tate character, which it promoted by e-mail to the “Hit Squad” database in the weeks before the game. “We wanted to see if we could use our database to drive traffic similar to last year over a certain timeframe, and so far, we have,” Fireman says. Reebok also offers its Hit Squad database and other Terry Tate fans the chance to opt into other Reebok marketing programs, and that crossover has been high, says Fireman. Of respondents to one sweepstakes targeting the Hit Squad database, for example, 40% chose to opt into another Reebok program.

Reebok’s Terry Tate program streamed video for brand building without ever focusing directly on the company’s product—athletic shoes—but at consumer electronics manufacturer Sharp Electronic Corp., rich media is used to tell the product story.

Sharp doesn’t stream videos on
SharpUSA.com, but technology from provider Exemplum Inc. powers its online presentation of the Aquos LCD flat-screen television. The company launched the high-end Aquos series in 2001, using technology from Exemplum, then called Nueweb, to deliver an interactive product demonstration online. Sharp has determined that visitors who engage the interactive demos spend four minutes longer on the site than those who don’t, a 30% increase in site stickiness, says SharpUSA director of Internet strategies and services Doug Topken.

Simple demo

“We hired Exemplum to do a very simple demonstration where people could spin, flip, and explore the product,” says Topken. Because the line seeks to differentiate itself on design and aesthetics as well as on engineering and technical performance, Sharp believed a traditional text-and-image display online would not do the product justice. “The objective was to let people see it in all its beauty rather than just as a static image, and we met that objective,” Topken says.

Since then, Sharp has worked with Exemplum to further enrich the online visitor’s experience with the use of rich media. The Aquos series interactive product demonstration has added elements such as a product comparison feature that lets the user click and drag a model number from beneath a product image to place it in a grid that instantly generates data on nearly 40 product features that can be compared, point by point, across the grid on up to three products at a time. Another feature lets the user call up more than a dozen product beauty shots incorporating the product into various room settings and environments. In addition, the site now lets visitors indicate whether they have a broadband or dial-up connection to optimize demo viewing for either.

Twice the conversions

Tracking the enhanced product demonstration over the past 18 months has shown that visitors who engage the online demo convert at twice the rate of those who don’t, Topken says. SharpUSA defines conversion as the number of visitors who engage the dealer locator tool or click directly through to the e-commerce pages of an authorized Internet retailer, as the company does not sell direct online. Including in its e-mail campaigns links to interactive product demos increases overall campaign click-through rates to nearly double the average, Topken adds.

“We’ve increased both the number of products we are doing interactive demos for and their complexity and depth,” Topken says. “We have determined qualitatively that when visitors spend more time with one of these rich media experiences, they are more likely to use the dealer locator.”

Exemplum in February introduced a rich media analytics suite that allows sites using its technology to collect detailed data about the behavior of site visitors when they engage an interactive product demo—where they spend time, the path they took and which features they interact with. Exemplum CEO Brian Leitten says such data have so far been missing from the equation, and that the analytics tools will provide site operators with an inside view of how customers learn about a product, with the idea that the data will yield actionable insights to improve the customer experience and ultimately sales.

But will such data shed light on whether rich media translates directly into more sales than a static display? When site operators are looking at spending from $5,000 for basic interactive functionality to $100,000 and more for a fully interactive and extensive exploration of a product online, figuring out exactly what the technology will do to increase sales would seem no small consideration. Yet Leitten says site operators who deploy Exemplum’s technology for interactive product demonstrations don’t generally grill him on the likely direct impact on sales. “There’s already a baseline understanding that static messages don’t work any more,” he says. “It’s early in the lifecycle of adoption of this technology, and people who are adopting now are believers. As time goes on, there will be more and more answers.”

Seeing is believing

Similarly, Provis Media Group’s Summers finds that for many of the online marketers who are his clients and prospects, seeing is believing. “Most can just see the value in a more detailed rich media environment versus a non-dynamic environment,” he says. Others are finding an answer to the question of value by simply looking over their shoulder. “Building a better user experience than the competition leads to increased revenues,” says Summers. “If company A is going to beat company B, it has to display its product better. The way to do that is with some of these rich media features.”

It was in part competitive considerations that got Restoration Hardware e-commerce director Stephanie Garcia interested in using rich media on RestorationHardware.com. The web site of the home accent and hardware retailer already was using dynamic imaging technology from provider Scene7 to power a feature that lets online shoppers view different fabric samples on its upholstered furniture when it went live with a Flash-powered online catalog in late December.

“Our competitors are starting to offer this functionality and we want to remain competitive,” Garcia says. Scene7 hosts the online catalog and handles targeting the items on each digital page, to ensure each product shown on a catalog page is linked to the right product detail page.

With just a few weeks of data, the online catalog is producing conversions at a rate double those among web site visitors who don’t use the catalog feature. While Garcia grants the online catalog users at this early stage represent a very small pool of shoppers, the conversion rate has been so strong that Restoration Hardware will seek to increase that pool by promoting the feature more actively.

IRCE 2008 Conference Multi-Media CD-ROM

Garcia plans an e-mail A/B test that will promote the catalog and offer some customers a link and others no link. At some point this year, she envisions using paper catalog real estate to promote the online catalog as well as other web features.

While Garcia won’t reveal data on percentage of customers who reach RestorationHardware.com by high-speed versus low-speed connections, she didn’t let concerns about the longer catalog loading time for customers on dial-up hold her back from using rich media on the site. If the issue should surface, she will work through a solution with the IT department, she says. “Web shoppers come in through a variety of means—MACs, PCs, modems and T1 lines. It’s hard to control that. If we didn’t move forward and not worry so much that one customer might not be able to see, we really wouldn’t be able to do a lot. There will always be somebody who has an issue with seeing or using part of the site. That’s just part of the web now,” she says.

Bandwidth for serving up its new online catalog was a concern when men’s apparel retailer Jos. A. Bank Clothiers Inc. went live with its first online catalog last year, but with the decision to host the catalog outside, speed hasn’t proven to be an issue, says Pete Zophy, divisional vice-president of e-commerce. RichFX hosts the Flash-powered catalog and formats the digital catalog pages supplied by Bank for proper online delivery.

But how about different connection speeds at the user end? “On dial-up it is slower, but not so slow you can’t use it,” says Zophy. “This was a fairly low-risk way to introduce rich media to our site. As long as connection speeds aren’t inconvenient for consumers, and as long as it enhances the consumer experience, you are going to see more and more of this. And it really does enhance the consumer experience because it’s a better presentation.”

The low-risk approach

The online catalog is a replica of Bank’s paper catalog that allows viewers to flip through its pages. Added functionality from RichFX allows online shoppers to select a close-up view providing greater product detail, thumbnails that show multiple page views on one screen or page views whose size falls in between.

While Zophy has yet to compile data on the length of time online catalog users stay on the site versus those who don’t use it, he speculates that catalog shoppers stay longer and that it’s a factor in higher average sales among this group. “These customers are probably spending more time shopping and flipping pages. They are just spending more time browsing, and it might be easier for them to find merchandise through the online catalog so they are adding more to their carts,” he says.

The online catalog has already delivered a positive ROI, producing order sizes on average up to 50% higher than those coming from traditional search and navigation on the site. And that’s with fewer than 10% of site visitors having used the online catalog. “That’s an upside, considering that we haven’t really promoted it heavily yet,” he says. “Our customers are a little more conservative, but they are accepting this Flash version of our online catalog.”

Hearing is believing

Few things can sell music like the ability to listen before buying, making rich media audio streams a top online sales tool for CDs. Buy.com—beyond the audio sampling offered on its music download sister site, Buymusic.com—offers audio samples of approximately 4 million individual CD tracks. While it makes intuitive sense that audio previews help sell, Doug Marrs, vice president of entertainment at Buy.com, also has data to prove it. “We have offered previews of tracks on some titles and then not offered previews on the same tracks for different periods of time. We have seen a three to four times improvement in sales for those items when there are tracks listed for preview,” he says.

The audio samples, averaging about 30 seconds each, are offered in both Windows Media and Real Media formats, two readily available plug-ins. “One of the criticisms early on was that we were forcing people to choose between players to hear the samples. So we opened it up to let customers pick their format,” says

The samples are from albums that represent about 70% of the 125,000 CD titles in Buy.com’s active catalog. Marrs says rights issues are one reason Buy doesn’t offer audio samples on every title; the Beatles, for instance, don’t make their catalog available for preview or download sale on the Internet. Another reason is the expense associated with encoding the files for online delivery. “It’s very labor-intensive and we’d rather outsource than try to do in-house,” says Marrs. Providers Loudeye Corp., based in Seattle, and Muze Inc., in New York City, do the encoding, as well as host the audio streams.

Marrs says the audio files occupy little bandwidth so customers’ connection speed isn’t an issue. “If you’re on a dial-up connection, you will wait for probably only 30 seconds for it to play,” he says.

But video streams are a different story. Since last year, Buy.com has streamed video trailers of movie titles available on DVD. The trailers can be viewed with Real, QuickTime or Windows Media players, but Marrs grants the viewing isn’t as clear for those on dial-up. “If you’re on a low speed connection you may see a picture that’s a bit more grainy, perhaps in a smaller widow,” he says. “But it’s still something you can download and enjoy. Faster connections will produce a view that’s cleaner and crisper.”

Buy works directly with movie studios and other providers to stream and host the videos where it can. Currently, trailers are available for about 5% of Buy.com’s 37,000-title DVD catalog. Marrs adds that Buy has so far focused on streaming trailers for marquee titles already supported by extensive marketing, which helps bring people to the site. “The trailers are something customers want to see, but people already have an awareness of these titles,” he says. Hence, their impact on conversions isn’t as strong as for audio samples. Buy’s next step will be to dig deeper into its DVD catalog to stream trailers for less-publicized movies, for which Marrs anticipates the trailers will become a more effective sales tool.

Rich media in all its formats isn’t yet mainstream but it’s moving in that direction, spurred by the development of new and better technology to deliver it, increasing broadband penetration at the user end, and a certain element of keeping up with the Joneses. Among marketers, believers are spearheading adoption, while those more cautious or constrained wait for the arrival of their own personal tipping point.

Before making the leap, they’ll have to define their objectives in using rich media so as to gauge success. Whether it’s about branding as in the case of Reebok’s streamed videos, exploring a product in detail such as SharpUSA’s interactive demonstrations, or providing an online shopping experience that mimics the offline experience more closely than ever, as do the virtual catalogs at Jos. A Bank, Restoration Hardware and others, rich media will likely serve best when it has a job to do.

And more than just the latest bells and whistles, it’s here to stay. “It will be expected that you will be able to present your product or message in this kind of way, and when enough of your competitors are doing this, you will too,” says Future Image senior analyst Tony Henning. “This will become the norm as the bar is continually raised, so I’d expect this in time to become standard. It’s not just the icing on the cake—it’s becoming the cake.”

mary@verticalwebmedia.com