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Insight/ Online Media

It's Showtime For Online Video

by Mercedes M. Cardona
Contributing Writer
CMO.com

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Just a few weeks before the start of the network television upfronts--the sales presentation of next season’s shows--advertisers gathered in New York City for their online cousin, the Digital NewFronts. And while they were smaller, the digital upfronts still had many of the same features: big media (AOL, Yahoo), big names (Katie Couric, Jay-Z), and talk about Next Big Thing--online video.

Online video has come into its own, no longer acting as just an add-on to marketers’ Web sites. Thanks, in part, to the explosive growth of tablets, Web videos have evolved beyond being just one more of the bells and whistles used to engage consumers online and are now a true messaging vehicle, deserving of its own resources.

“Digital video is no sideshow. It’s the main act,” said Mark Beeching, chief creative officer of Digitas, which sponsored one of the NewFront presentations. In fact, some online video programming now has higher audience numbers than network shows, he told attendees.

Tablets Spur Growth

Online video has grown exponentially, but still has tremendous potential, experts say. According to comScore, by the end of 2011, 100 million Americans watched online video content on an average day, up 43 percent from the year before. And the growth continues apace this year; comScore’s latest numbers show 181 million Internet users in the U.S. watched nearly 37 billion videos online, and one out of five of those were ads--a record-breaking 9.5 billion spots.

Advertisers “have to stop looking at online [video] as a second cousin to TV and start looking at it in its own right,” said Jay Miletsky, CEO of online video network MyPod Studios, in an interview with CMO.com. Indeed, marketers are discovering online video can be a true branding tool. A survey by Digitas found 51 percent of online video viewers in the premium 18- to 44-year-old demographic would look up a new brand or product they saw on an online video, and 58 percent of 18- to 34-year-olds who follow brands on social media would watch a video that a brand posted online.

The growth of tablets has been “a huge factor” in the explosive popularity of online video, said Scott Smith, senior product manager for video solutions at Adobe. Tablets have given viewers a quality experience in a mobile medium, making them a go-to device for engagement, and publishers have jumped in to match their habits, which now include consuming content in multiple devices. “They expect the television experience from the tablet,” he told CMO.com.

A recent Forrester Research study concluded that tablets are displacing smartphones and PCs as the second screen for TV viewers. And they’re beginning to cut into TV, as well: Forrester noted nearly one-third of tablet users say they won’t bother buying a small second TV for their homes in the future.

And as online video has become a medium of its own, marketers are beginning to consider it separately and create content for it. Rather than repurpose TV spots, many marketers are developing videos for the Web that reinforce their brand identities and sometimes drive their images in new directions.

“Right now, we’re all experimenting,” said Christa Carone, CMO of Xerox, at the Digitas NewFronts. “The definition of success changes.”

Carone showed a Xerox branding video created to show off its various lines of work. That’s just one of many things that the company is doing with online video, but like most marketers it is still testing formats and metrics, she said.

Web Video Sees The Light

Some of online video’s early successes have been almost accidental. Corning, which has been manufacturing glass products since Thomas Edison’s first lightbulbs, wanted to spur more business in new industries when it asked Doremus for a sales video to show business prospects--and it became a viral hit.

Doremus created a futuristic video based on Corning staffers’ ideas of possible uses of glass, including interactive kitchen countertops or a high-tech sunroof and glass dashboard for the family car. The company previewed “A Day Made of Glass” at a meeting with financial analysts on a Friday and then posted it on YouTube, where it reached close to 15,000 views over the weekend and kept growing thanks to word of mouth. It has been viewed 19 million times to date and spawned two follow-ups, according to John Mannion, EVP and director of client relations at Doremus.

Corning had felt “undervalued” and wanted to show its role in bringing innovations to market, said Dan Collins, VP-corporate communications. Thanks to the viral hit, Corning is talking with companies in new sectors, he told CMO.com. Even the U.S. Navy inquired about glass control consoles to save space on submarines, he told CMO.com.

Next Page: Beyond repurposed TV spots.

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That sort of informational content is one of the more effective ways to use online video, experts said. Viewers don’t want to watch repurposed 30-second TV spots on their tablets; they want online content that is useful and interactive.

Even when using a concept from TV spots, a marketer can add an interactive element that makes it work online, MyPod Studios’ Miletsky said. For example, he noted that Mars created an online video version of its Twix “Need a Moment?” campaign that let online viewers choose what happened during the delay created by eating the candy bar.

“People are sitting online, wanting to push a button--give them a reason to push a button,” Miletsky said. Advertisers need to understand that the behavior of online viewers is different than that of TV viewers, he says.

“In a computing environment, it’s more active participation. That video better be really engaging for what it’s doing,” Doremus’ Mannion added. “People aren’t looking at it as entertainment. They’re looking at it as an information-gathering experience.”

That’s why advertisers need to create informative content; viewers usually go online with an agenda, looking for information or entertainment, but they also need to own the online experience or it’s not useful branding, experts said.

“We’re really now creating valuable editorial that people are enjoying for its own benefit,” Mannion said. “We’re certainly crossing the line into a new era of marketing.”

Adding Value

Ironically, industry observers point out that online video is heading full circle, back to the sponsored shows of the early TV era. The successful uses of online videos are essentially branded content, usually demonstrating the sponsors’ products or services. That kind of how-to content is extremely popular online, accordig to experts.

“If we want people to engage with the content, it has to be something of value,” said Diego Scotti, CMO of apparel retailer J Crew. For example, he told the audience at the Digitas presentation that J. Crew ran a test where it asked consumers to pose their style questions, which would be answered online by its men’s stylists.

Also on marketers' radar: how to track online video content. Industry observers noted that online video is still fragmented and viral, which can make it harder to measure. Some companies, like Xerox and Corning, will post their videos on networks like YouTube or MyPod, while some will  show them only on their own Web sites. And some players are gaming the system, posting content on open sites and counting views of the site as views of their content, Miletsky said.

But software companies are developing tools to track and measure online video, a development similar to the recent growth in social-media metrics and its effect in spurring marketers’ use of those channels. Indeed, measuring tools have been around for a couple of years, Adobe’s Smith said, and now they’re beginning to work together to pull data from different sources and create an integrated view of the online audience. Adobe is also working on initiatives to “get the right content to the right people on in the right format.”

But that’s only half of the job, Smith said. The other half is working with advertisers to develop tools to optimize their ad spending “so they’re not spending money on a shotgun approach,” he said.

With all the tools and the audience coming together, the online video space is now making a big leap and the rise in accountability is a good sign, industry observers said.

“As time goes on, marketers are going to be responsible for how they’re spending those marketing dollars. They are going to have to see some return on investment,” Miletsky said. “Ultimately, as much as we all want to beat the branding drum, at some point you have to move some products.”

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