Create a Blog in 3 Easy Steps:
All for FREE and also Earn Money by displaying Google Adsense. So why are you waiting for? Create your own blog today.
As online video producers experiment, fumble, and tinker their way toward a model for making money on scripted online video content, an old school premise emerges on the new media scene: product placement.
It makes sense. Because online video needs to be able to be seen where there’s audience (see: YouTube), advertising that is already “baked in” to the video content itself can help producers to monetize their product.
Fred Seibert, creative director of NextNewNetworks, talks about creating programming around “community need” and then finding a way for video content and sponsorship to crossover to meet that need. Interesting stuff.
(Found via Beet.tv.)
Online video advertising is still, relatively speaking, a brand new industry. People only started watching videos on a massive scale over the last three or four years, as broadband penetration peaked and video platforms like YouTube emerged for non-technical people to easily upload and publish video to the Internet. And it’s only in the last year or two that online video advertising has emerged.
Much like for the Internet itself, the idea of advertising for online video was strange at first. But over time, people are getting used to the idea, and depending on the quality of the content, will put up with it in certain forms. Further, if the advertising is contextually relevant and/or blended effectively with the content itself, audiences might actually enjoy it.
Here’s what we know: people are online, they watch video online, they spend money online. Therefore, video producers and advertisers are going into overdrive to figure out a model that works. And as this marketplace matures, we’re going to see higher quality video content online and advertising models emerge that make money for producers.
There are probably many people who will disagree with that last statement, by the way. It’s conventional wisdom in some circles that you can’t make money online from scripted video content. I disagree. It’s simply a matter of time and experimentation.Not many of us were convinced in the year 2000 that people would be watching videos on the web. Rewind a few years, and you can literally watch the birth of Internet Video. She is still a toddler, who has learnt to walk, and speak – and has been told by the parents that she needs to go find a job and make some money. Tough job, but here is the good news:
A study by ComScore revealed that nearly 75 percent of U.S. Internet users watched an average of 158 minutes of online video per user during the month. Furthermore, 57% of online adults have used the internet to watch or download video, and 19% do so on a typical day. This is primarily because:
The growing adoption of broadband combined with a dramatic push by content providers to promote online video has helped to pave the way for mainstream audiences to embrace online video viewing. Three-quarters of broadband users (74%) who enjoy high-speed connections at both home and work watch or download video online.
The Pew Internet & American Life Project's first major report on online video also shows how many video viewers have contributed to the viral and social nature of online video. More than half of online video viewers (57%) share links to the video they find with others, and three in four (75%) say they receive links to watch video that others have sent to them. Video viewers who actively exploit the participatory features of online video, such as rating content, posting feedback or uploading video, make up the motivated minority of the online video audience.
ComScore also conducted an analysis of U.S. video consumption by daypart, which showed that people were relatively more likely to view video on weekdays than on the weekend. In fact, peak viewing occurred between the hours of 5:00-8:00 P.M. on weekdays, when video consumption was significantly higher than average. This opens up some amazing doors when you consider that this slot is adjacent to Television primetime. Wouldn’t advertisers want a multi-channel campaign approach and supplement their TV campaigns with campaign on Internet Video?
In a recent consumer survey, Jupiter Research presented respondents with a scenario in which online video content was free if it was ad-supported. Only 20 percent of online video users said they would only watch online video if it had no ads at all. So, 80 percent of online video users accepted the presence of advertising as a trade-off for providing free online video content.
There is a plethora of great video content available on 100s of sites, with over 10 billion streams available every month. Moreover, there is a large amount of content being created by both professionals and users. Indeed, some of it is being created exclusively for the internet. More and more content from various parts of the world will make it online, as will content that was created a generation back. In fact, I will argue that there may be better quality and quantity of video content available on the internet in 3-5 years, than web content.
Original creators are becoming more and more savvy, and after seeing audiences connect with their content, they are beginning to explore whether they can make a living out of their craft. Sites like Revver, Metacafe, YouTube and many others are making this possible, opening the doors to higher quality and quantity of content from the users, catering to the long tail.
Despite this rapid growth rate, online video still is a relatively small share of total ad spending, and accounts for less than 1% of the total TV advertising marketplace. It is estimated that the total revenue for online video will expand to $6.3 billion by 2012. Right now, online video content is responsible for an estimated $538 million in the US alone. That may seem like a small slice of the $20+ billion spent on online advertising in 2007, but consider this: while online ad revenues are growing 26% per year, online video ad revenues are growing 55.5% per year. The potential for Video monetization is clearly there – just a matter of when.
The Wall Street Journal ran a piece today (sub req.) on a few video ad technologies that are being developed. These are mostly geared toward national advertisers and branding, but there are important implications here for local.
In the ongoing discussion of how local advertising will play a part in the online video revolution, an important question (beyond the many questions surrounding advertiser adoption and ad sales strategies) is what format these ads will take.
The same question plagues all forms of advertising that will be applied to online video. The easiest and currently most prevalent form of video ads pre-roll has been met with a resounding “boo” from a majority of consumers. So what are the other options? Performance-based text advertising that appears adjacent to video is one, but this lacks a desired level of engagement or interactivity with the content itself.
The Journal article gets into a few more possibilities that involve banner ads that are dynamically inserted in and out of video windows at the exact moment a word is spoken that is contextually relevant to an ad. The ad format in question here is a text link or display ad that offers the option to watch an accompanying video ad or go to a company’s Web site.
One company mentioned in the article, called ScanScout, is working on such a platform that employs voice recognition technology to figure out the content of a video clip. The article briefly mentions Blinkx which is also doing some very interesting things with voice recognition technology and video search. This goes beyond traditional methods of video search that use meta data or closed captioning transcripts, which can have sporadic availability.
The New York Times has a nice write-up on Blinkx earlier in the week. Interestingly, video search has the same core challenge as video ad distribution automating the contextual “understanding” of a piece of video content. A challenge also currently lies in low advertiser adoption, according to Blinkx CTO Suranga Chandratillake (who expressed many of the same concerns at last year’s Drilling Down on Local conference).
“There currently aren’t enough video advertisers to provide ads that match many specific key words,” he told The Journal. “For example, even if you identify the words ‘Canon digital camera’ in the dialogue on a video clip, there may not be a video ad to go alongside.”
Better voice recognition could push both video search quality and advertiser interest forward (here also lies the all too familiar chicken-and-egg dilemma between content and demand). It could also help to ease many marketers’ worries that their advertising will show up next to racy or controversial video content by offering the ability to buy certain keywords and steer clear of others.
It still seems like a compelling solution is a long way off, especially before this has any effect on the development of the local video ad ecosystem, given the many question marks that remain there. But this type of experimentation is important if we’re to arrive on some real answers (and real business models) on what works with online video ad distribution from both advertiser and user perspectives.
We’ll have a panel discussion during day 1 of Drilling Down on Local (March 19-21) focused on the infusion of video content in online local media:
Track B TECH: Video Injection into Local
With broadband, Wi-Fi and iPods, video is all at once everywhere on the Internet. Kids are all over YouTube, auto dealers are doing mashups, Yellow Pages are developing IPTV, newspapers are creating virtual TV stations and TV stations are selling local advertisers pre-roll ads and cutting into classifieds. Where is it all going? How can you be part of the latest thing?Speakers
Bob Armour, CMO, ShopLocal
Matt Crowley, VP, Marketing, YellowPages.com
Bradley Inman, President, TurnHere.com
Perry Solomon, VP, Business Development, FAST Search & TransferHope to see you there.
Hope to see you there.
