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The Importance of Interactive Multimedia to Advertisers  [Mail:]

April 15, 2007

Todd Butler

The Importance of Interactive Multimedia to Advertisers
Published in Mail: The Journal of Communication Distribution
(April 2007)
Interactive multimedia is forcing the revaluation of traditional advertising mediums; the more (Internet) interactive a medium is, the more value it has for advertisers. Interactive multimedia is called rich media when delivered over the Internet. Rich media is defined as video, animation, text, graphics and sound. It can be a flash animation or an interactive TV commercial.
A marketing survey by Forrester reports that sixty-seven percent of respondents are planning to use rich media over the next twelve months in their (on line) display ads and e-mails. It’s unfortunate that only 48% of the on line consumer market has the necessary broadband connections to view rich media ads; the majority still use dial up.
The importance of multimedia to advertisers is its proven ability to lift response rates. Wharton Business School in 2002 found that multimedia (video presentations) had a 600% increase in response rates over printed brochures. Advertisers using rich media on line have seen a similar lift in click rates over on line static ads. The reason TV commercials (video) are so highly valued by advertisers is the format’s ability to elicit an emotional response from consumers. But advertisers want more than just TV commercials; they want their video to be interactive and are moving on line to get it!
While on line advertisers (Yahoo, MSN, Google) look to increase the use of interactive multimedia in their product offerings; print advertisers look to compete by adding more color choices, increased personalization and of course improved analytics. With these enhancements, print advertising hopes for survival by playing a supporting role to an inferior delivery system for an inferior product. The problem for print advertising and its distribution channel (the Postal Service) isn’t a lack of capability or functionality; it’s a lack of vision and leadership!
The conventional wisdom is that interactive multimedia can only be delivered over the Internet. But there are problems with rich media advertising. First, a majority of consumers do not have the capability to view rich media ads streamed to them from on line properties.
Advertising on line is “suck your thumb until they come”, advertising!
The second problem with the Internet is that on line advertising is a reactive medium. It requires consumers to visit a specific web page and click on an ad, opening it for more information. It’s estimated that Google has indexed 9.5 billion web pages. That’s a lot of real estate to cover for advertisers looking to beg face time from consumers.  It’s like having a million home town newspapers and trying to decide on which page of which paper to place an ad so a potential customer might find and read it. The difficult question for users of on line advertising is how to target the right page. Maybe it would be easier to skip looking for the right page and just target the right consumer?
Targeting “the right consumer” with interactive multimedia is called Multimedia Mail!
Multimedia Mail is the integration of print advertising, interactive CD/DVDs, and the Internet. Multimedia Mail is postal delivery of Internet advertising! The print advertising engages the consumer with captivating imagery immediately upon removal from the mailbox and leads them to the CD/DVD. The CD/DVD interacts with the consumer whether they are on line or not. If the consumer is on line, the CD/DVD provides one click access to specific landing pages on the Internet, providing the interactivity valued by advertisers. Market penetration? 100% of the on line market can view interactive multimedia when it’s delivered on an optical disk by the Postal Service!
But no one will play the disks!
Wharton in a 2002 study found that video presentations were viewed by 90% of recipients. The most astounding result of the study was that 89% of the presentations were passed along to family and friends. Forrester did a study of E-CDs the same year and found that 87% of recipients viewed the CDs.
July 18, 2006, DMNews reported that Wynn Casinos had used a “video-enhanced CD-Rom” in their marketing campaign to fill hotel rooms during slow months. Wynn mailed 205,000 of these interactive multimedia disks (Multimedia Mail) in June 2006. By July Wynn had registered 164,000 unique IP addresses viewing the CD.
Wynn’s Multimedia Mail campaign generated an 80% play rate!
How does an 80% play rate from a targeted audience compare to ads delivered over the Internet? Static Banner Ads garner a 0.27% click rate. A click is when someone intentionally or inadvertently opens an ad for more information. Rich media ads on average provide a 1.17% click rate. Search engine marketing, the absolute best marketing on line, delivers a 2% to 5% click rate. DoubleClick has reported that all on line advertising delivers a whopping average click rate of 0.62%. Direct mail’s click rate (opening an ad for more information) as reported in the Postal Service’s “Household Diary Study” is 84%!
If 80% of the recipients of Wynn’s mail piece played the disk, what percentage opened the package for more information (a click) but didn’t play the disk?
Ahhh… but the cost.
This is the constant refrain from an inferior product!
Audi, in 2004, did a Multimedia Mail piece. They dropped 200,000 pieces containing an interactive, full screen video with the goal of having consumers sign up for a test drive. 18% of the recipients signed up for the test drive. Audi’s in mail cost was less than a dollar apiece.
Advertising Age released November 6, 2006, a “Search Marketing Fact Pact” and in it was a chart showing the overall cost per click for search engine marketing. The chart lists the average click costs for Google, Yahoo and the shopping engines, stating that these are the top tier search properties. When averaged together, the overall click cost was $1.83 per click. The In-Mail-Equivalent is the amount an advertiser can pay per piece for direct mail to equal a stated on line click cost. An IME for a click cost of $1.83 is $1.54 per piece mailed. Another way to look at it is if an advertiser spends $1.54 on each piece mailed they will have a click cost (open an ad for more information) of $1.83.
Wynn achieved an 80%; take it out of the mailbox, take the CD out of the package, load the CD into the computer and view the CD, rate. Certainly this 80% play rate is more valuable than a mere inadvertent click on line. And yet if Wynn’s in mail costs were similar to Audi’s, the play cost of Multimedia Mail was substantially less than the average click cost of search engine marketing. Not only does direct mail deliver a superior product, it does it for less!
Interactive multimedia is the future of advertising. Multimedia Mail is the future of the direct mail industry.
Todd Butler
Butler Mailing Services, Inc.

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