Online Video Claims Victory: Why the Streaming Strategy Will Supersede TV

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The MORE THINGS CHANGE…
(…a bad news/good news story, and a brief examination of the burgeoning online video market.)

The bad news first
It is very difficult/impossible for brand advertisers to accurately measure engagement, abandonment rates, and consumer follow-up on television ads.

Now the good news
When video ads are shown on the Internet, they will handily yield the data that addresses all of the challenges just mentioned. The very nature of how media is served on the Internet allows advertisers to learn how much of any commercial was viewed, if the users clicked on associated ad units, and what they did from there.

It all started
The beauty of search engine marketing is the wealth of information that it yields. Back in the days when traditional advertising consisted of billboards, print ads, and television spots—the ad unit contained a unique phone number and/or coupon code to measure a campaign’s reach and efficacy. Advertisers, marketers, PR practitioners, etc. counted conversions by the number of times a phone rang, a coupon code was used, etc.

As the marketing value of the Internet grew to the point where it could not be ignored, marketers jumped on board recognizing the wealth of data that could be mined from search engine marketing. Advertisers adapted traditional tracking methods to their online campaigns with unique URLs, e-mail addresses, promotional codes, etc.

Marketers were astounded by the results as they could follow the consumer from ad to Website to shopping cart. This opened doors for discovering, and then capitalizing on that advertiser’s sweet spot, learning what creative resonated most with consumers, and modifying online and offline campaigns accordingly.

Today, with the deep, verging on ubiquitous, penetration of broadband access, marketers are able to target highly desirable demographic groups (see table, “Demographic data for broadcast entertainment industry”). Better yet, 62 percent of consumers prefer to obtain their video content free, and they are OK with it being video-ad subsidized. Marketers are poised for great success in the next phase of the online revolution.

In March, The Online Publishers Association (OPA) released a survey highlighting the current impact of video ads. According to the survey, nearly 31 percent of respondents visited the advertiser’s Web site as a result, with eight percent making purchases. Equally notable, video ads inspire 14 percent of viewers to visit a brick and mortar store to follow up in-person.

Recently, The New York Times reported that for the second year in a row advanced ad spending for the fall television season is down for the big five networks. This year’s estimate projects that sales will fall to between $8.9 to $9 billion, down from last year’s $9.1 billion sold in the upfront market, also down from the estimated $9.3 billion of two years ago.

In spite of all of the opportunities and trends, change comes slowly
The snail’s pace for change can be better understood by looking at a recent survey of ad agency reps (WebAdvantage.net), which found that 36 percent of respondents had “little to no” experience with online video advertising, and 63 percent were “very concerned with” how to keep consumers engaged with video ads. While this survey indicates that many media buyers are somewhat baffled and are therefore slow to adopt this new advertising modality it is clear by the commitment to reallocate funds that the same execs recognize the opportunity and the need to figure it out.

In reality, the similarities in this new area far outweigh the differences. In fact, Internet video ad buys are simpler, faster and easier to control, while providing greater targeting opportunities. Online video ads can be served to as many or as few viewers as desired. This can not be said for broadcast commercials.

The online world is different than the broadcast/cable world, because the user pulls (requests) the video at a place and time of their choosing rather than having it pushed to them based upon a programming schedule. The result of this user-initiated process is that the users turn what was once a broadcast experience into a one-on-one experience. This, potentially, turns long tail of remnant inventory into highly targeted gold.

3 COMMENTS

  1. It seems that one of the big reasons broadcasters aren’t jumping on board quicker is the transitional time they are in.

    Obviously advertisers held back on the upfront to have additional funds avaiable for online marketing.

    The industry is trying to figure out how to untangle itself from the alliances that are changing so quickly.

  2. It’s not easy to tell you the facts without coming across as totally self-serving. Full disclosure — I am the CEO of StreamerNet and I have over 27 years experience in high-tech markets and products. The bottom line is that it’s a noisy world out there and it is increasingly difficult to rise above the din. Please treat yourself to a look-see at the StreamerNet Mobile Video Producer http://www.streamernet.com/html/solutions.html to see how we can simplify all things video.

    StreamerNet offers a unique set of visual communication tools that enable desktop delivery of video email, personalized coordination of highly-private OnDemand video hosting and delivery, and sophisticated reporting solutions to manage Enterprise knowledge base requirements. Additional features enable the creation and distribution of easy and affordable web-based video advertising.

    This is definitely not about those Video Amusement Portals and I am simply compelled to tell you about it. Please let me know if I can personally assist you with answers or insights.

    Regards
    Bill

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