Million Dollar Web TV News

If you believe the forecasters, 2010 will be the year of the long-awaited inflection point when TV budgets begin to shift to online video in a meaningful way. In 2009, advertisers were projected to spend about $700 million on web video ads in the US alone, an increase of 32% from last year. The actual numbers are not in yet, but indications are close.

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If you are active in the online video scene, i.e. produce your own videos alone or with the help of sites like iMoondo this should be an easy leap.  

  

Especially, if you are also a seller on eBay the question becomes: Could adding videos to your profile and products bring you more credibility and sales? To find out, ask yourself:

1. How effective are your current classifieds?
2. Is it easy for you to produce your own videos?
3. Would you benefit from showing a video in your classifieds?
4. Would your profile be more persuasive with a video presentation?
5. How easy would it be to add video to each of your items on eBay?
6. Do you expect social networking sites to follow suit?
7. How soon will online classified ad sites include videos?
8. Should you jump in, prepare for, or dismiss this development as a gimmick?

I see video included in classifieds as a very positive development. While you certainly would not benefit from seeing a video about a baseball ticket you are purchasing (unless it links to a previous game in which your team pounded the living daylight out of their opponents), you would most definitely benefit from seeing a video about a piece of furniture, a vehicle, or some other more tangible product.

Much like virtual tours have allowed home buyers to be much more effective when searching for a property on real estate Web sites, the same could potentially be true for consumers of miscellaneous goods and services.Moreover, the challenges eBay is facing with less traffic and strikes by its sellers, this could be a great way for them to drive additional revenue. They could charge fees for hosting your videos or highlighting your items, service, and profile with them, as they do now with more “plain vanilla” listings. This would give you as a merchant and your visitors a more pleasant and hopefully informed shopping experience.

Enabling a better, more personalized look at you, as the merchant, is just as significant as researching the products the you are selling. After all, the feedback and ratings for sellers are so important for this online community.

Craig’s List is in a different proposition because of its lack of interest in fully monetizing the site; however it will be interesting to see if – more like when and how – they decide to leverage video as well. Social networking sites like MySpace and Facebook are already hosting so much user generated video, they could easily build the web apps to integrate them with classifieds. Even better, they can have third party developers on their platforms create them.

The eBay and Craig’s Lists of the world should be concerned about the intentions of the social networking sites to branch into e-commerce. It would be a natural progression for them with a lot of profit potential for their users and themselves. 

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The most-damaging, viewership-lowering, ROI-suppressing issue facing tv and video content owners today is that promotion, particularly for scripted series and episodes, does not work. At best, all it does is remind the relatively few people who watch a show to tune in again; by definition, it cannot motivate non-viewers to sample. How can you turn this around?

Ask yourself:

• Are We Set Up to Motivate People?
• Do We Have an Outdated Strategy That Keeps Our Content Hostage?
• Can We Achieve Effective Promotion Via Massive Sampling?
• Why Is a Hit the Rarity?
• Is Viral Sampling a Solution for Me?

and jot down your answers after reading this article, so you can analyze them.

Are We Set Up to Motivate People?

This leads me to ask: in an era containing hundreds of viewer options, what good is investing millions upon millions in content and delivery systems, if you can’t — or worse, are not set up to — motivate people to sample the content? In turn, why should advertisers invest in your content, unable to deliver effective advertising? After all, more people sampling your means more can become loyal.

Do We Have an Outdated Strategy That Keeps Our Content Hostage?

The role of promotion is to build value into your programming. The outdated strategy of keeping your content hostage until its debut falls well short of that goal. Look at ABC, CBS, FOX and NBC as examples. Each has a billion-dollar promotional budget in paid media plus the value of promotional spots on the network if sold to advertisers. Yet, for Disney, Viacom, News Corp., and GE, it is irrefutable that their promotional messages are totally ineffective. For cable and digital networks, the budgets might be smaller, but the results the same. As for VOD and Pay-VOD, getting people to watch or even fork over money for a huge special or “The Sopranos” is not that hard; the real challenge is: How do you get them to tune into or pay for a new series they have not seen?

Can We Achieve Effective Promotion Via Massive Sampling?

Without effective promotion from massive sampling, all your expensive content can do is maintain viewer loyalty after that initial trial. Everything else is a waste of time, money and effort. In fact, I’d argue that many canceled series do not fail; rather, their promotion did not take advantage of free viral sampling on the net — if they did, many more programs would have been successful.

Why Is a Hit the Rarity?

When you do not “know” the characters because you have not seen the show, the promotion might as well be in Greek for all the good it does to bring new viewers to you. With a comedy piece, you cannot find the humor. With a drama, you cannot appreciate the intrigue. So all the money spent on promotion only remind existing viewers, who “know” the characters, to watch a show again. This ensures lower viewership and quick cancellation. In this scheme a hit is the rarity, even for great content.

Is Viral Sampling a Solution for Me?

Is there a solution to this problem? Yes. The pool of potential samplers must be dramatically expanded from just those few people who have seen the show (prior to its debut, no one is in the pool) to include those who have not. How? Through the adoption of a new promotional model reflecting today’s competitive environment. Holding on to the thinking used in the three-network 70s, both pre-premiere and episodic, is totally counterproductive and the single greatest suppressor of revenue and stock prices.

500% Gain in Online Viewership Is Very Feasible

Ironically, since loyalty to most tv programs is weak and the act of sampling is so easy (the viewer just has to click the mouse or hit the remote), viewership gains of 50-to-100% or more in broadcast and cable and 500% or more in digital are very feasible. This only requires one simple thing: a commitment to make adjustments in the outdated content development-promotion-sales model. Because once the promotional problem is addressed, you’d be amazed how many others will evaporate.

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Online video is growing in popularity, but the vast majority isn’t getting anywhere near your TV screen.A survey conducted during December 2007 by Macrovision (commissioned by Harris Interactive) says that only a small number of adults who download video from the Internet play it on a TV or DVD player.

Specifically, the survey of 2,254 adults in the U.S. found:

1. 43 percent download some form of digital media
2. Over a quarter said that they download TV shows regularly
3. 15 percent download full-length movies
4. More than half said that they only watch the downloads on their PC
5 ONLY five percent said that they watch video on a TV or other video-playing device

No surprise here – most content providers use some form of Digital Rights Management (DRM) in such a way that it makes watching video anywhere other than the PC inconvenient, if not downright impossible. For example, video from sites like Hulu can only be watched through a browser, so the only way to watch it on a TV would be to use a computer connected to it (something that the majority of users don’t have).

While downloads from NBC Direct may not be limited to the web, they can still only be played on a single authorized computer at a time.Downloading from places like the iTunes Store or Xbox Live Video to the Apple TV or an Xbox 360 make this possible without having to use an HTPC. Still, even though these solutions make it easier to watch downloaded content on the big and small screens near you, they clearly have yet to hit it big with the general public.

Only five percent of those surveyed said that they watch video on a TV or other video-playing device regularly.In fact, while conventional wisdom says that users would love to watch downloaded video content on the television set, Macrovision found that only 10 percent of those surveyed said that they have any desire to do so. The company was surprised to learn this: “While people very quickly figured out the music scenario—either legally or illegally—they haven’t figured that out for video,” observes Macrovision chief evangelist Richard Bullwinkle.

As online video continues to expand, content providers will have to face the consequences of their own restrictions on how viewers use content. Making it easier to transfer files to portable devices and set-top boxes will help drive viewership.One way to do that is by mimicking the Peer-to-Peer (P2P) experiments by Canadian, Norwegian, and other European broadcasters, who offer completely restriction-free downloads. That might be a bit too much for most U.S. networks to swallow now. On the other hand, if they don’t drop DRM and embrace alternatives soon, they will continue to lose viewers to free-for-all video sharing sites like YouTube/Google, AOL, Yahoo, MSN Video as well as other, less-legitimate ways of acquiring video content.

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Well, what do you know? I learned this from Lori Moss of Cellfab, who decided that I was displaying too much ignorance during one of our discussions:

“Although no exact number can be given, the order of magnitude of the number of cells in a human body can be approximated to about one hundred trillion cells. Then there are about 210 known distinct human cell types. On top of that, the human body contains 20 times more microbes, which are single-celled organisms, than it does cells.”

I spare you the rest. Suffice to say it’s a pleasure to have Cellfab as a member advertiser!

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A growing number of digital video and ad providers are challenging TV’s hold on visual quality with better technology and services. The quickened pace of High Definition TV deployment was expected to slow the exodus of viewers to online offerings.The reason this strategy doesn’t seem to be successful so far is that the online tv and video sites are also upgrading to HDTV quality webcasting. And they have a built-in advantage: the cost is much less and the technology much more flexible, being mostly software based, than the mostly hardware based infrastructure necessary for the broadcast and cable companies.

Examples abound:

1. THE TOTAL NUMBER OF VIDEOS viewed was 10.1 billion during a record-breaking December 2007, according to the comScore Video Metrix service.

2. YouTube.com accounted for 3.3 billion videos viewed online in the U.S. in January.

3. Google sites once again ranked as the top U.S. video property in January with nearly 3.4 billion videos viewed (34.3% share of videos), gaining 1.7 share points versus the previous month.

4. Fox Interactive Media ranked second with 584 million (6%).

5. Yahoo! sites served 315 million videos (3.2%).

6. Microsoft sites came in with 199 million (2%) videos watched in January.

7. Vimeo, a video-sharing site owned by Barry Diller’s IAC, began distributing user-generated videos in HD late last year.

8. The peer-to-peer-powered Web TV startup Joost also offers high-resolution content.

9. Just last week, the NBC/News Corp. co-venture Hulu.com launched to the public with limited HD content, as one of the first tests of the new Adobe Flash Player, which supports streaming HD.

10. Rumors are also flying that Yahoo intends to integrate video into Flickr very soon, perhaps in the next three weeks. Part of the delay may have been a long internal debate about how to make Flickr Video special and distinct from what YouTube already offers.

BrightRoll CEO Tod Sacerdoti actually believes the Web is better suited for delivering HD content than TV. “HDTV penetration is just 33% of U.S. households, while right now advertisers can use HD content to reach over 65% of all Internet consumers.” Sacerdoti says. BrightRoll is an online video advertising firm founded just two years ago in 2006. As an ad serving company they must have the ability and the need to track video viewing statistics and trends very closely, so I’d condider their numbers pretty reliable.

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Guess what? Fifty seven percent of U.S. Internet users watch videos online and most of them share what they find with others according to a recent Pew Internet and American Life Project report.     

It’s just the first decade of the 21st century, yet technology is already king and video is its queen. Sounds good? Cliche? Both? So what?

So, if you want to reach the Tween, Teen, and Twenty-something market heavily into this web video scene, you must have:

1. A website that loads in ten seconds or less or
2. Videos (that also load quickly!)

The new generation is not accustomed to waiting for anything. Now, whether this is right or wrong I’ll leave up to you, but it is true – to capture their attention video is the way to go.”Three in four (75%) say they receive links to watch video that others have sent to them,” again from Pew Internet and American Life Project report. Video is fast, engaging, and most importantly viral. I urge you: If you do not have a video on your website, look into producing one, because in this day and age this is a business must.

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The most influential internet marketing publication, eMarketer projects that web video advertising will grow 89 percent this year to $775 million and  is anticipated to rise to $3 billion by 2010. Web Video Report has done some digging and pulled together a great post about the various rate sheets of publications that offer web video advertising. What gives is that web advertising is a measureable form of media and thus far web video advertising response rates are all over the map.

What determines response rates is:

•  Originality
•  Immediacy
•  Quality
•  Stickiness
•  Viral distribution

These vary greatly, and so do the results of measurements. The most powerful revenue model in web video advertising is though to be original video commercial placement in local search engines. 

By combining the traditional advertising power of high-quality video with the interactive possibilities of the internet, web video advertising has the potential to offer businesses an exciting new way to reach customers. The question is:  Will web video advertising ultimately provide at least as much value to traditional brand advertisers as they get from broadcast TV?

The Issues 

A recent study by IBM, titled The End of Advertising as We Know It found that 40 percent of the 2,400 consumers and 80 advertising executives it surveyed found ads during an online video segment more annoying than any other format. I have talked to ad agency people (interactive and television) and everyone has a differing opinion right now, and often they are too busy fighting in house about who gets to monetize on-line videos (the traditional television side of the house or interactive). They believe that the future of video ads is not in the format but in the delivery of the message with each site/channel allowed to determine what works best for their viewers and advertisers.   The whole “Web Video Advertising” industry is based on one thing, “What is the best/least way to upset a viewer’s experience”. The innovators that come up with new ways to monetize video will have the greatest chance of success.  “Everyone is grappling with how to improve on the advertising model,” says Will Richmond, president of broadband video research firm Broadband Directions. 

Marketwatch’s Bambi Francisco points out that despite web video’s meteoric rise, it still only accounts only “for roughly 2% of online advertising.  Social media, online video and games are at early stages of development as advertising vehicles.  

The State of Internet Video Publishing

Internet video publishing was one of the biggest trends of 2007. Internet users who watch online videos will rise from 72 percent today to 85 percent by 2010, predicts eMarketer, an online media research firm in New York. News Corp. Chief Operating Officer Peter Chernin anticipates a dramatic rise in Internet video advertising and thinks it “will maybe rival (Web) search as the fastest-growing area of advertising for the next several years.  Combine this forecast with another data set released on Wednesday, from the Pew Internet & American Life Project, which says that more than 70% of consumers who have broadband connections watch and download video online.” Richard Foan, managing director, ABCe, said: “Viewing content over the internet is becoming increasingly common with the major broadcasters launching online viewing platforms. 

TV networks using Nielsen Online’s VideoCensus tool said the service marks a step forward in the field of Web video audience measurement, but they still would like to see a comprehensive system that can count viewers on the Internet. Research into the habits and mindsets of internet video users as they relate to online video, TV and advertising has revealed a wide disparity in viewing habits.  Indeed, as computer screens, mobile phones and other devices offer what amounts to billboard space for display ads, video and tie-ins to Internet searches will multiply. With internet video exploding in popularity, business owners must decide if and how they should be adding video to their web sites. 

As internet marketing moves from the experimental to the essential, online video is a powerful tool for a variety of different promotional applications: 

•  Client Testimonials 
•  Advertising Promotions
•  New Product Descriptions
•  New Service Introductions
•  Press Briefings
•  Company and CEO video blogs

The Internet Advertising Bureau’s Video Marketing Handbook details the explosion in popularity of online video and provides an overview of all the current opportunities for advertisers whilst offering an insight into the future of web video advertising.  

The single most important thing is that the internet is becoming the central hub of most media and marketing campaigns. We’re using the internet as a source of entertainment, not just a utility, so I’m very confident in the predicted growth rate going forward. However, the biggest new places where consumers are flocking on the Web — social networking and video-sharing sites — are yielding advertising revenue slower than some Internet companies had hoped.   

Publicis Groupe, the advertising conglomerate, and Google, the Internet giant are in a pact to jointly develop an approach to digital advertising that is both creative and technologically savvy. As Internet advertising is increasingly precisely targeted to meet consumers’ presumed desires, the trick for advertisers is to sniff out people’s interests and needs without riling their privacy defenses. Ad spending on the Internet is rising steadily while newspaper ad spending is declining.  Almost everything on the Internet is fast becoming a moneymaking opportunity through advertising. ”If (Facebook) is not the Big Man on the Internet Campus yet, it’s the handsome frat guy everyone wants to know,” says Debra Aho Williamson, an online-advertising analyst at researcher eMarketer. 

Online video has become the fastest-growing category of Internet ad spending in the past year, according to research firm eMarketer — so much so that advertisers now frequently complain about the shortage of video content worthy of sponsorship. To capitalize on this situation, Hollywood’s United Talent Agency and the Internet-based advertising agency Spot Runner have started a mini studio for digital entertainment from established actors, directors and others, the agencies said on Tuesday. These are the standard 15 second and 30 second pre-, post-, and mid-roll that the Internet Advertising Bureau (IAB) have officially sanctioned as IAB-compliant formats. The way advertisements will be placed on an active network such as the internet will be greatly improved to the mass broadcasting of today.

How To Market YOUR Video Ads

The introduction of new ad formats that lay on top of a video or link to other videos can increase your ad inventory, by layering ads throughout the length of the viewing experience, You need to grab some of the magic of your site, product, or service you promote, to offer the viewers something more than just an in your face marketing message.  

New technologies are about to make web video marketing a feasible for marketers. As people become more comfortable with creating and distributing online video, web video marketing will become more of a norm than a “cool new thing.”  Also on the radar, Pete Blackshaw’s Consumer Generated Media blog is rapping about buzz surrounding popular user-generated Super Bowl ads and how they fit into a “holistic marketing” approach. Unfortunately, the cost of producing an effective video ad, even of 15 or 30 seconds, can be prohibitive for small businesses. If you go with pre-made clips currently on offer from the likes of SpotRunner or AdItAll aim at a slightly offbeat, humorous approach to marketing that may or may not suit your message, with a focus on live action over motion graphics content in evidence. For more information you might want to check out Scott Kirsner’s excellent list of “sites that pay” or Robin Good’s own recent guide to monetization and marketing for web video. Video SEO and Video MarketingReelSEO features information on video search engine optimization and online video marketing.

In conclusion…

The single most important thing to remember is that the internet is becoming the central hub of most media and marketing campaigns. Web video advertising is projected to grow from $775 million to $3 billion by 2010. That’s the FASTEST of any medium on and off the web.

As computer screens, mobile phones and other devices offer what amounts to billboard space for display ads, video and tie-ins to Internet searches will multiply. If you can combine your traditional advertising with high-quality, viral interactive video, your internet video advertising will give you the means to make you more money than with any other medium. 

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According to what I just learned about writing effective titles, the one above will do wonders for us in Google, Yahoo, MSN, and Ask searches. Especially as long as Yahoo and MSN are separate….For us, humans, the title should really read like:“More traffic from Million Dollar Web TV helps to sell CulinArt.com at a higher price.” That’s more like it, isn’t it? While I’m not at liberty to divulge details, I’ve been told the less than two month exposure that CulinArt.com received on our site was a major factor in the final valuation. Losing a member advertiser is not something to celebrate, but under this circumstance I do NOT mind. Neither would any of our current and prospective member advertisers, I’m sure.

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Not exactly. We haven’t had Microsoft bid for us either … as yet. In case the deal doesn’t go through, we are available for a bit less than $41 billion. Anyone listening,Redmond?

This business is so much fun, I seem to forget sometimes we have to make money. That is, however, NOT the case. We are profitable even at 1 – 2 sales a month. Our member advertisers are very satisfied with the increased visits to their sites too. So we’ve decided to use Word-of-Mouth marketing now, combined with another, for now secret method. We have also closed our affiliate program to concentrate our resources on more promising approaches. We will not publish monthly statistics either, till our “secret weapons” start to produce.

Without further ado, let me introduce here our latest advertisers: EmotivX Agency, with a very cool and original video ad: 

and Sexy iTV, with a first – a vertical ad image. Nuff said especially after seeing their video ad, as you will, no doubt, agree.   We may have something special coming from one of our member advertisers soon. Stay tuned!  

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