Power Video

A Sense of Urgency for Standards

With the recession taking a chunk out of ad dollars everywhere, the industry can no longer afford to be passive when it comes to standards for online video ads. That's the impetus for a project called "the Pool" -- a group of media firms, including Microsoft, Yahoo, CBS Interactive, and Hulu -- that will work together to test online video ad formats, according to the Wall Street Journal. Big-time media buyer Publicis Groupe's Starcom MediaVest is the company behind the project, which also includes marketers such as Allstate and Capital One Financial.

According to the report, the group has narrowed a group of 30 formats down to five, which are being tested in focus groups. The two highest-scoring formats will be beta tested on the media companies' sites.

"Among the ad formats being tested are videos that contain elements that, when clicked on, display more information in a separate pane or open a new browser window and videos that allow viewers to pick the ad that they wish to watch."

We've been bemoaning the lack of standards for some time now, the efforts of the IAB notwithstanding. Online video advertising is still growing, but the industry can ill afford to let a golden opportunity slip away because of market confusion.

With a recession hanging over the industry, it's good to see some leadership in this area.

Businesses looking to implement online video in Q1/Q3 '09

According to our handy-dandy PollDaddy Poll on the Fliqz Blog it appears that 40% of our readers are planning to implement an online video solution in Q1 of 2009. Another whopping 40% will do so in Q3 and 20% in Q2.

This data jibes with Dan Rayburn's observations of the online video sector's continuing growth during this down economy. According to Dan's post at StreamingMedia.com online video companies raised over $75 million in VC funding in the past 2 months alone. While this is not a ton of cash considering VC capital, it says a lot about this sector despite the current economic state. Many entrepreneurs strapped for cash, looking to get their businesses started have been met with a nice smile and a stiff kick in the pants when knocking on lender's doors. VCs may say they're open to new investments but their actions, in general, suggest otherwise in support of their existing portfolio. Fortunately this is not the case for the vid biz.

So help us collect more data by using our Poll to the right of this post. I need proof that we have more than five readers. ;-)

Streaming Video: It's Mainstream

Streaming online video is more popular than ever among women and adults between 35 and 54. The findings from a study released today by Ipsos MediaCT "illustrate the widespread appeal online video services have with the majority of today’s Internet users."

Specifically, since December 2007, the percentage of female Internet users ages 12 and older that have streamed a video online in the past 30 days has grown from 45 percent to 54 percent, nearly the percentage of men (58 percent) who have watched streaming video in the same time frame. The percentage of adults aged 35-54 that have recently watched streaming video jumped 49 percent to 60 percent.

If you've been thinking about dipping your toes into online video but were unsure about its ability to appeal to the masses -- well, what are you waiting for?

Car Dealers Pimp Their Rides With Video

We’re big believers in the power of video to serve vertical markets. This article in AdAge notes that more U.S.car dealers are turning to online video to rev up their marketing efforts. The article states that 25 percent of dealers use online video to showcase new models as well as for customer testimonials and personal introductions from the dealers. This jibes with a Kelsey Group survey earlier this year that found that 59 percent of auto dealers plan to use Internet video on their Web sites within the next 12 months.

One of our customers, AutoBytel's MyRide.com, features a variety of videos for car shoppers, including reviews, auto show highlights, even crash tests. That's what makes video especially attractive for the automotive market—it's as much an educational tool for consumers as it is a marketing device for dealers. That's a win-win situation.

 

Cisco’s Online Video Prediction: Boom or Bust?

Pretty much everyone expects online video viewing to continue to grow, but it’s been hard to find anyone willing to quantify just how much. So thank you Cisco Systems, which is projecting a sixfold increase in Internet traffic between 2007 and 2012, largely thanks to the growing popularity of online video sites. The networking-equipment maker disclosed its predictions in a study called the Cisco Visual Networking Index. The company says that Internet video will account for 50 percent of total data transfers by 2012, compared with only 5 percent in 2005.

Not everyone is buying it. Douglas McIntyre at 24/7 Wall St. calls Cisco’s findings “bogus,” noting that the company cites the popularity of YouTube as one of the leading factors. “… YouTube and its video-sharing peers are not growing as fast as they once were. Watching user-created content of babies throwing food across the room and Ronald Reagan singing ‘America The Beautiful’ has lost some of its charm.”

True enough, but it’s also true that as more people become accustomed to watching video online, the more they’ll demand high-quality content. And if the demand is there, the big media companies will have to follow. While McIntyre correctly notes that major media companies are having a hard time figuring out how to make money in online video, that doesn’t mean that will always be the case. Furthermore, that view discounts advancements from companies like Netflix and Apple that are coming up with innovative ways to stream high-quality video directly to TV sets. Indeed, the Cisco report states that “Internet video-to-TV will grow rapidly to 10 percent of the total [consumer Internet traffic] in 2012.”

Also, McIntyre conveniently leaves out an important factor. That is, the expansion of high-speed Internet service in developing markets. The Cisco report notes that Internet traffic is growing rapidly in Latin America, Western Europe, and the Asia-Pacific region.

Of course we don’t know how Cisco’s prediction will pan out. But dismissing it out of hand by looking at short-term trends is rather short-sighted.

Clarity Coming to Ad Formats?

The Interactive Advertising Bureau is scheduled to publish new guidelines for online video ads Monday, May 5. For the past month, the IAB has been accepting suggestions from industry members on its proposed guidelines (PDF format). The guidelines cover best practices for the most common current in-stream ads, including linear ads and companion ads.

It’s great that someone is taking the lead. Too many marketers have kept their distance from online video in part because of the lack of standards. Along with the Online Video Advertising ROI Council’s efforts to determine video advertising’s effectiveness, the IAB’s efforts should make it easier in the long run for marketers to justify launching online video campaigns. As eMarketer’s David Hallerman points out, “Video ads command higher prices than static display advertising.” And if standards make advertisers more comfortable with the format, they’ll be more comfortable with paying higher CPMs.

Critics will say that standards will stifle creativity. That may be true, but unbridled experimentation with ad formats has confused marketers and consumers alike. Sure, things get less exciting when you start talking about “standards” and “guidelines,” but that’s what happens when an industry enters its next phase. And this is clearly a sign that the online video industry has matured.

Recruiters to Score with Video

While people have debated the pros and cons of video resumes, recruiters are finding out that online video can be a big boost to their efforts. Click Z reports on a study from Borrell Associates that finds online video ad spending will reach $10 billion in 2012, up from $522 million last year—much of that driven by major local ad categories, including recruitment.

Like any other ad, video from recruiters could be used to pinpoint the right candidate, which also involves eliminating the wrong candidate. Think about watching a video tour of the department for which you’re applying for—you’d know right away whether it seemed like the place for you. This is particularly true for younger job seekers, who value culture and environment as much as they do salary and benefits. And video testimonials from current employees can be a great asset, as well.

As is often the case, the simplest applications are the most effective.

Learning to Love the Recession

Sure, recessions are generally unpleasant. But all that corporate belt-tightening may actually be good for online video advertising. At least according to the folks at BtoB. The magazine’s 2008 Interactive Marketing Guide—completed with data research assistance from eMarketer—finds that the gloomy economic horizon will accelerate the shift away from traditional media to digital media as marketers demand granular, measurable data.

Money paragraph: “Online video is an especially interesting category, in part because the cost of entry is so much lower than traditional broadcast efforts, a fact that has and will spur adoption by companies that never had a video strategy in the past. U.S. online video advertising spending this year will increase 74.2% from 2007.”

Not that we’re hoping for the economy to dig itself into a deeper hole—even we know about the law of diminishing returns. Besides, this shouldn’t be a short-term proposition. Yes, more companies will use the opportunity to explore this new medium. But they’re likely to stay here if they get the results they demand.

It’s worth reading the entire guide. You’ll find some helpful tidbits about online video ads, including “5 Simple Rules for Producing Effective Online Video.”

Video Classifieds: Where Are They?

Mike Cassidy at Video Insider wonders why online classifieds—and eBay in particular—haven’t jumped on the video bandwagon. “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.”

It’s a good point, especially given the nature of classified ads. Unlike traditional advertising, you don’t have to be a professional videographer to get your point across in a video classified (just as you don’t need to be a professional copywriter to craft a competent classified ad). And we’d like to add that it’s critical that the video uploading tools be as intuitive as possible, and that the player blends in well with the look and feel of the site that’s hosting it. That way, you’ve created value for both the consumer and the listing site.

In Search of Online Video Profits

Mike Cassidy has posed a challenge on Online Video Insider: “If you were given $1 million for an online video business, how would you spend it?” Cassidy comes up with four business models—video search, video portal, ad serving, and ad solution—that are prime for someone—anyone—to develop the killer solution.

We’ve been discussing the same issues here. Like Cassidy, we’re interested in what you have to say.