Rounding-out a long and distinguished track record in the traditional Advertising space, Dick Hopple left his post as President of DMB&B North America to co-found Unicast Communications along with Rick Landsman, in 1996.

In 1999, after two years of intensive research and development efforts funded by the likes of Intel Corporation, Unicast debuted the groundbreaking Superstitial ad format, designed expressly for purposes of harnessing in a single form the branding capabilities of traditional media (specifically, Television) and the interactive potential of the Internet.

In the two intervening years since its debut, the Superstitial has established itself as one of the few ad formats capable of consistently garnering the praise and, more importantly, the business of the traditional advertisers that the Internet Advertising and Publishing industries have long been speaking of as their brightest future hope.

Though Hopple and Unicast were perhaps amongst the earliest proponents of a vision for Internet Advertising involving a broadcast-scale deployment of Television-style ads, they were certainly not the only one's who had this vision. What distinguishes the Superstitial from the rest is not the concept that lies behind it, but the specific ingenious manner in which the Superstitial is implemented, from a technical standpoint.

Using a patent-pending back-end delivery technology that caches Superstitial ads into users' browsers prior to playback and while the user's modem is idle, Unicast is able to deliver large (100K) file-size, near full-page Rich Media ads (typically authored in Flash) to users, with virtually no wait-time for the user, and without slowing down the user's surfing experience - even in the event that the user is running a 56K or slower modem.

Evidence suggests that the Superstitial is indeed a powerful advertising medium. A recent Harris Interactive Study conducted jointly with Unicast, concludes that Superstitials perform as well as Television ads in lifting key branding metrics, including Brand Recall and Purchase Intent. And, user response has purportedly been such that Superstitial-based campaigns now routinely deliver clickthrough rates to advertisers of between 5 and 15%.

Success of this magnitude means that the industry should expect Superstitials to become increasingly pervasive, and, perhaps eventually, as ubiquitous in the landscape of the Internet as Banners are at the present time. These facts alone make the Superstitial worthy of further scrutiny.

avant|marketer Editor, Ajay Segal sat down with Dick Hopple, the visionary behind Unicast and the Superstitial (and Unicast's CEO), to discuss with him the lessons the Internet Advertising industry must learn from the Superstitial about the requirements of traditional advertisers, the notion that Internet Advertising must be Television-like, the Superstitial's long-term prospects for sustainability as an intrusive ad format in an environment of growing ad clutter, the Superstitial's place in the overall marketing mix vis-à-vis Banners, and role that the Superstitial will play in turning around the Internet Content Publishing industry.

avant|marketer: Unicast is one of the few companies that has managed to create a client base comprised almost solely of the large-scale, traditional advertisers - Ford, Kraft, LL. Bean, Audi - that are widely thought to represent the greatest hope for the future of the industry, but which have been notoriously reluctant to spend on Internet media. What does the industry need to learn from the success of Unicast's Superstitial, so far as how to cater to traditional advertisers is concerned?

Dick Hopple: The starting point is for the industry to recognize that the core attribute that drives value for advertisers is format. Format - how an ad runs, how it plays, the depth of communication that the advertiser can communicate - is the reason that advertisers pay $20 CPM or so for Television ads and $2 CPM for Outdoor Billboards.

If you think about what is available in Internet Advertising - in terms of the formats that are available - what we have ranges from Banners and Skyscrapers, on one end, which are message formats very much like Outdoor Billboards, to Superstitials, on the other end of the spectrum, which are very much like Television commercials.

When you look at the top fifty advertisers in the United States - or even globally - most of these companies spend almost nothing at all on Outdoor Advertising, and those that do, spend very limited percentages of their money on Outdoor.

If the traditional advertisers aren't going to spend large percentages of their budgets on Outdoor Billboards - and that kind of message - it shouldn't be surprising to anybody that they are not going to spend large percentages of their budgets on Internet Banners and Skyscrapers.

If, on the other hand, you give them a Television-like format and thereby give them the ability to communicate with Television-like effectiveness on the Internet, they’re going to unlock their budgets. I absolutely believe that. And, in fact, we have already seen this happening: We have had 325 or so traditional advertisers who have run Superstitials across 350 or so web sites in the Unites States, and 85% of those advertisers have come back and repeated with larger buys.

avant|marketer: You make a connection between Superstitials and Television advertising, and Unicast even refers to the Superstitial as "The Internet's Commercial." While many welcome this way of thinking of Internet Advertising, there are also those that think that the Television analogy obscures the true promise of Internet Advertising and minimizes the importance of the medium's unique capabilities. The suggestion is that the industry must work to re-shape traditional advertisers' expectations of Internet Advertising, such that traditional advertisers begin to see the Internet as a unique medium, with unique capabilities, and - overall - as something other than Television. How do you respond to this?

Dick Hopple: I think it's silly for publishers to tell advertisers - the sellers to tell the buyers - that they (the buyers) don't understand, and that they need to change their thinking. I think that it is the buyer that defines what the buyer needs, and that it's the seller's job to sell it to them. So, to tell advertisers that they don't get it, and need to think of the Internet as different than Television or Radio or other, more effective media I think is crazy.

Yet, in effect, this is what the industry has been doing for the last five years. It has been saying to the advertiser, "we sell Banners, and if you want to buy Banners, then great. If you don't want to buy Banners, then you don't understand, you don't get it."

But, advertisers voted on Banners, and they voted "No."

That said, I think that there is a lot of thinking that needs to be done on the part of advertisers and their agencies to understand how best to combine Television communication effectiveness with the interactive potential of the Internet - the ability to conduct a one-to-one dialog and to get users involved in the ad.

We are running an ad right now for Absolut Citron, which, when the ad comes-up and plays, the user's cursor is on a little lemon-carving knife which the user then uses to peel a lemon peel off of an Absolut Citron bottle. This is a very interactive ad, and, I think, a spectacularly creative ad, that uses the interactivity potential of the Internet to get the user more involved in the advertisement. And, the more the user gets involved in the advertisement, the more they remember the message, and the more they remember the message, the more positively they feel toward the brand.

avant|marketer: You say that advertisers have voted "No" on Banners, but in an article you wrote entitled Creative Flexibility in the Digital World you state - speaking of the Banner ad - that, "Banners have an important role to play in the mix of ad formats used by advertisers." How would you classify the role that Banners should play in the media mix vis-à-vis the role that screen-dominant, Rich Media formats like the Superstitial should play? How should advertisers think of these two formats in relation to one another?

Dick Hopple: Like Outdoor Billboards, Banners best serve the purpose of a reminder of a more effective message.

For instance, Coca Cola spends the majority of their money on Television, but they also spend money on the Radio and they spend money to put signage in stores with their logo on it.

Banners - like Radio, in-store signage, and Outdoor Billboards - can play a part in delivering reminder messages that serve to reinforce fundamental brand messages. I think the Superstitial, by contrast, will be the core way that advertisers communicate as effectively on the Internet as they do on Television, with that same kind of depth and quality of message.

avant|marketer: Certain individuals have expressed serious reservations about whether the Internet can truly support intrusive ad formats modeled on Television, over the long-term. We recently did an interview with Jakob Nielsen, a prominent Web Usability expert, in which Nielsen categorized the recent evolution of Internet Advertising as following an "arms race" pattern, whereby in order make their message heard, advertisers are developing more and more disruptive ways to reach users. He categorized this as a very risky proposition. How do you answer such concerns? Is the Superstitial complicit in this sort of escalation pattern? Does this pattern even matter?

Dick Hopple: To understand the potential of the Internet and what advertisers want, you have to look at conventional media. You can't just invent this stuff out of thin air, and have a whole bunch of theories.

It's clear that, as the CPM price of Banners has dropped to an equilibrium with outdoor billboards, what many sites have tried to do is to put more and more Banners on the same page. And clearly, one of the things that that does is create clutter. Advertisers, however, don't like clutter. And, since it's the advertiser's dollar that creates the demand here, as advertisers believe the Internet gets too cluttered, they will pull back or force changes on the industry to make it uncluttered.

There have, for instance, been times when the Television networks have tried to put-in more commercial minutes per hour of programming and the advertisers have said "we don't think, therefore, that the commercial minutes are as valuable and we aren't going to pay as much for them," and the networks pulled back and there was an equilibrium reached.

avant|marketer: So the market will itself reduce or - at the very least - regulate clutter?

Dick Hopple: That’s right.

avant|marketer: This is perhaps economically efficient from the advertiser's standpoint. But doesn't the industry also have to be sensitive to the long-term impacts on the user from the deployment of disruptive formats such as the Superstitial? For instance, many users are reportedly frustrated with Pop-Ups to such an extent that the brands that use them, and the reputation of the industry, in general, are being damaged, as a result. Why do you think that the Superstitial, as it becomes more pervasive, won't have these same negative consequences?

Dick Hopple: Advertisers that use Pop-Ups are making the assumption - which I think is a very bad assumption, and one which I think has been disproved in the marketplace - that the user will sit and wait for a Pop-Up ad to load in just the same way that they are going to sit and wait for a web page to load. Nobody is going to wait for an ad to load.

Unlike Pop-ups, Superstitials play instantly because the files are politely pre-cached in the background, using the bandwidth that is available after the user has loaded a page and while the modem is idle. Because they play instantly, they're simply not like other types of pop-ups. That's the first difference.

The other key is that Superstitials are large 100K files, that are sound, graphics, and animation- rich, and they're screen dominant, so they engage the user much more deeply than Pop-Ups. As a result, users, in fact, like them.

avant|marketer: But, Pop-Unders also have number of these features, and many reports suggest that users are finding these to be nearly as problematic as Pop-Ups. You have been a critique of the Pop-Under in the past. What are the salient differences between Pop-Unders and Superstitials, from the standpoint of the user?

Dick Hopple: Look, advertising pays for content. This is why an advertisement paying for a piece of content runs in that piece of content: Television ads run in Television programs, Radio ads run in Radio programs, and Print ads run in Magazines.

There is a bargain that has been made with the consumer, and that is, "I'll pay for your show, if you watch my ad."

And, so, if the advertiser is paying for a specific piece of content, I’m prepared to watch that ad in the context of the content for which it's paying. But, I'm not prepared to watch an ad that's paying for content when I'm not watching that content. With Television I'm not forced to stay in the room and watch ads after I turn off a Television program. Yet, this is, in effect, what Pop-Unders force the user to do.

Unlike Pop-Unders, Superstitials play in the content that they pay for.

avant|marketer: So, the reason that Pop-Unders irritate users is that they breach the rules of advertising etiquette that users are used to from traditional media like Television and Radio?

Dick Hopple: Exactly.

avant|marketer: Notions of correct etiquette have been used, in the past, to explain why various forms of Internet Advertising - for instance, Permission Email - work. But, even in these areas, we have seen user tune-out lead to substantial declines in effectiveness. Do you believe we will be seeing a drop-off in the effectiveness of Superstitials, over the long-term, or do you believe that these formats will deliver the sort of sustainable results that both publishers and advertisers have been hoping for?

Dick Hopple: I think that this is directly dependent on the quality of the individual ads. For instance, there are some Television ads that are better than others, and they get remembered and create stronger brands.

All the Superstitial does is provides the advertiser with a template - an advertising platform, if you will - that allows them to use the creative tools that have been effective for them both on the Internet and in other media. So, I wouldn't expect the effectiveness to drop off, I actually would expect the effectiveness to increase over time, as advertisers and their agencies gain more experience with how to use the Superstitial platform.

avant|marketer: But, isn't this the same vision that those in the Publishing and Advertising worlds had with respect to the 468x60 Banner? That, in other words, if advertisers can find ways to better utilize the Standard Banner, in terms of harnessing creative ...

Dick Hopple: But if you can only use the 12K File Size and have one line of copy, how effective can you be. If that kind format was highly desirable to advertisers, you would see them spending more than 2% of the advertising dollars in the United States on Outdoor Billboards; you would see them spending, seven, eight, or 9%, because that medium would have proven effective for them. In fact, it is not that effective for them. And, if they are not going to spend money there, they are not going to spend money on Banners, which have a similar effectiveness.

avant|marketer: But, the Tune-out that has occurred with respect to Banners has been almost of the entire format, rather than a tune-out of say, particular advertisers' ads. Why do you believe this has been the case?

Dick Hopple: Because Banners are invisible.

If I go to CBS Sportsline to read about Northwestern University, I am going to read about Northwestern University, I'm not going to look all around the page for Banners. They're there, perhaps once-in-a-while one catches my eye, but, for the most part, they are part of the decoration of the page. How many billboards do you remember when you drive down the highway? And, yet, you [may have] seen 15 in a row.

When you're driving you're concentrating on the road.

avant|marketer: Jason McCabe Calacanis of Venture Reporter seems to have the same idea. That is to say, that it's not only that ads must be served in the content that they subsidize, but that, to be effective, they must also be partitioned-off from this content. This is one of the reasons, I believe, Calacanis advocates Rich Media ads that cover the entire page. If this is part of your rationale, why then, was the Superstitial not created as a true full-page format?

Dick Hopple: If you go back three years, the conventional wisdom of Publishers, technologists in the industry, and people in the press was that the Internet is different and that it would never accept truly intrusive advertising. The hope was that advertising could be more-or-less invisible and not affect the user, and yet advertisers would still pay for it.

These were bad assumptions. But, because the industry was making them, and also because web sites weren't ready to begin serving full-page ads, since they were afraid that users would feel that they had been taken away someplace off the site, we made a decision to move forward with an implementation of the Superstitial that involved screen-dominant windows, but which provided users reassurance that they are still on the site.

I think that the industry is now beyond these considerations, and so we have developed a full-page product that we will probably be introducing some time next year. I think that the industry is now ready for full-page ads.

avant|marketer: Some have suggested that full-page ads must be structured in such a fashion that users won't be able to close the windows in which they appear. Do you believe this is a viable option? And, is this a feature you are considering for the full-page release of the Superstitial?

Dick Hopple: No I don't think that you can do that. While television advertising pays for television content, the advertiser can't require me to sit there and watch an advertisement that I don't want to watch. And I don't think that you can do this on the Internet either. I think the user has to have the flexibility to get rid of the ad. It's the Advertiser's responsibility to make the ad relevant enough and interesting enough to make the user want to watch the ad.

avant|marketer: Finally, let's talk about Internet Content: Can Ad-supported Internet Content be a profitable business model?

Dick Hopple: Absolutely.

avant|marketer: Well, obviously, for many publishers - particularly those putting out higher-quality content involving relatively high production costs - Internet-based ad supported Content has failed to be profitable. What needs to be changed on the Publishing and Advertising sides of the equation in order to establish an environment in which profitability for Content providers can happen on a widespread basis? What is the Superstitial's role here?

Dick Hopple: If you look across all conventional media there are three attributes that define a truly mainstream medium for truly mainstream advertisers.

The first is that there has to be a really large-sized audience there, the second is that there has to be a format that allows advertisers to communicate with the effectiveness that they demand, and the third is that there has to be a set of standards that make it turnkey for them to do that.

If you accept these premises, and look at the Internet, it's clear that the Internet has a very large audience, has a very good demographic - on average, over all sites - and that it can be, therefore, highly appealing to mainstream advertisers. That's the first attribute.

But, the industry hasn't offered - before Superstitials - a format that advertisers think is effective. And, the ability to reach a great audience with a lousy message isn't that valuable. This is a serious problem.

The third area is standards. The Internet Advertising industry has absolutely not been able to come to grips with standards.

First, there is not a standard format. There are formats suggested by the IAB, but if you buy ten web sites in a flight of advertising, you are going to have to run six versions of a Banner, and that is not very efficient or cost-effective for agencies.

Also, there is no universally agreed upon definition of an "impression." Some sites define an "impression" as a call to a server, some sites define it as an ad leaving a server, and so on.

With Television you can produce one unit and you can run it on any Television station in the world, and the definition of an impression would be the same for each of those Television stations. It works the same way for print ads and Radio commercials. The Internet needs to have the same kind of standards that other media do.

What the Superstitial provides is a format that is as effective as Television, and that is based around a set of standards that agencies are used to from other media. You can produce one Superstitial and run it on every Superstitial-enabled web site, and the definition of an impression is the same for every Superstitial that runs.

If you combine the communication effectiveness of the Superstitial with the fact that the Superstitial adheres to well-defined, conventional standards, you have a format capable of appealing to mainstream advertisers and unlocking their budgets for publishers.