Experts say online video is poised for explosive growth during the next couple of years, as marketers realize that, like TV, the ability to see a product and watch it in action is a great way to influence consumer purchase.
To get a better understanding of the current state of online video and where it’s going in the next few years, CMO.com reached out to those in the know. Here’s what they told us.
Adam Kmiec, Global Head of Digital and Social Media at Campbell Soup Told CMO.com:
It’s 2013. We’re nearing 2014. Today, we can start watching a movie on Netflix on our iPad, pause it, pick it up on our iPhone at the exact same spot, 2 hours later, and then complete the movie from the confines of our couch, later that evening, via our AppleTV. Impressive, right?
Earlier this year, from Sydney, Australia I used Apple’s FaceTime to video chat with my daughter back home in Minneapolis. That’s technology, in the video space, working hard to deliver an amazing consumer experience.
Despite the growth and innovation of consumer video experiences, the branded video content and video advertising categories continue to struggle with both growth and traction with consumers. It would be easy to point the finger at the myriad of video formats marketers need to plan against, lack of measurement standardization or the overall fragmentation of the web. But, I think the lack of progress in digital video stems from 2 critical challenges.
1. Infrastructure: In 2012, I wrote about how the increased focus by mobile providers to throttle data usage or increase the cost for data usage would hold the industry back. It has. When you have a choice between watching a great, funny, entertaining video or refreshing your Facebook stream 10X a day, it’s rare you’ll choose the video. Mobile data is life and you don’t want to reach the end of your life quickly.
2. Quality Content: The reality is, the majority of video content from manufacturers isn’t interesting enough to earn the right on to a user’s screen. The last time a brand created content that was so good, you’d pay to watch it, was BMW Films. Since then, marketers have been copying that formula to try and drive success. On the whole it hasn’t worked because the content still pales in comparison to the content BMW presented in 2002. Yes, I said 2002. Video content from 11 years ago is better than the majority of video content being produced today. Then again, we’re a culture that thinks Old School was a better movie than Animal House.
As a marketer you could wait for the infrastructure to evolve. But, the reality is, infrastructure always evolves. I think your better bet is focusing on creating the type of desirable content that transcends infrastructure, data caps, screen sizes, platforms and languages. It also, wouldn’t hurt to stop advertising a 60 second pre-roll in front of a 15 second piece of content on YouTube.
Melinda McLaughlin, SVP and CMO of Tremor Video, told CMO.com:
In-stream video advertising reached its tipping point in 2013, and emerged as the logical evolution of TV campaigns with powerful, new companion benefits for brand building. CMOs who build and protect strong brands saw the Internet rallying to support their needs as never before.
Think back—display advertising rebuilt itself after the dot-com bust by serving the needs of direct response (DR). Digital agencies, publishers, and ad tech rushed to develop display advertising solutions that focused on DR. It worked, and DR ad budgets migrated online quickly and massively.
By contrast, TV budgets for brand campaigns were stable over the past decade, even as CMOs wrestled with audience erosion and advertising clutter. But 2013 will be remembered as the year when incremental spending for TV campaigns moved to in-stream online video tactics. The sea change has begun. We expect TV dollars will be recalibrated to catch up to consumer behavior, and streaming online video advertising will take meaningful share because it meets the needs of marketers and provides critical insight into what’s working and why.
It took the digital industry a long time to embrace brand building as a performance metric. Now we believe the pieces are all in place: one, sight/sound/motion; two, audience ratings to bridge TV and online; and, three, accountability for context, visibility, and brand safety. Layer on engagement through interactivity, performance-based buying, and real-time consumer insight, and you have the complete set of benefits that CMOs want from online video.
Over the next two years, video’s evolution is poised to avoid the mistakes of display advertising. Brand CMOs have a tolerance for complexity, but they hate it when things are complicated. Online video will make TV campaigns richer and more rewarding, while transparency, performance-based buying, and insights will drive growth, not complication. And, yes, programmatic technologies will be critical—but the crazed rush to the bottom that played out with display advertising will be a lesson learned, not a model for video.
The gold standard for quality brand advertising has been the TV commercial, but the TV marketer's job is much harder today than it was 20 years ago. They seek quality that marries the power of great TV advertising with the best brand-building capabilities of digital. Their dream of all-screen “video neutrality” is coming true faster than most think.
Ujjal Kohli, CEO of Rhythm NewMedia, gave CMO.com the mobile video perspective:
We see the consumer’s growing dependence on mobility and the significant role it plays in their day-to-day. Smart marketers are working to creatively engage with consumers throughout the day on their mobile devices. eMarketer forecasts a $2 billion increase in mobile search spending in 2014 and a $1 billion increase in mobile banner spending, which means we can safely say the mobile shift is happening—for consumers, publishers, and content providers, as well as advertisers.
That said, the adoption trend alone is not the complete story. Smart digital marketers know the mobile platform as a consumer environment is completely different than TV or desktop video advertising. Engagement happens differently; viewership habits are not the same. Mobile video is a unique and powerful environment. But there is a lot to get right. Alignment to premium content in which ads are served becomes incredibly important. Consumers are only receptive to advertising when they acknowledge a fair value exchange. This means high-quality, relevant ads in front of the premium content consumers crave.
Consumer adoption trends will continue. More publishers will start to get it right in terms of content production and monetization for digital. Marketers are faced with challenges in mobile video today, like achieving the means to find their audiences in an increasingly fragmented world, or developing brand-aligned content. These are challenges but also opportunities, and publishers and advertisers will step up in these areas. Also, those on the supply side will help advertisers find and engage their audiences with robust tech infrastructure, delivery environments, and strategic creative or ad units.
Tamara Gaffney Senior Manager of the Adobe Digital Index, told CMO.com in a previous interview:
The accessibility and capability technologically to access video has reached critical mass. Regular digital video—the kind where you go to a media site and watch a video—increased 30 percent year over year, and video streams experienced a 50 percent growth rate in two years. From Q3 to Q4 2012, video consumption grew 13 percent. Marketers have a better opportunity than ever before to engage in video brand advertising as well as visitor acquisition advertising, such as click-rate based advertising, according to an Adobe report.