Marketers are spotting fresh opportunities in the video-on-demand (VOD) market as non-broadcaster publishers, including Google and AOL, make significant investments in premium-quality video content. As online video views surge 36% year on year to 785 million, according to Experian Hitwise, this area is set for a boom.
Until now, the market has largely been dominated by the major UK broadcasters. Agencies tend to trade straight VOD pre-roll advertising as part of their TV trading deals for their clients. The remaining VOD inventory is then divided among ad networks, which can serve them out across publisher sites.
Internet Advertising Bureau (IAB) head of industry programmes Jack Wallington says the increase in video content on the market is opening up new marketing opportunities for a wide variety of brands.
“A great raft of publishers outside of the broadcasters, like Grazia magazine and music platform Vevo, are investing in, producing and securing their own premium, broadcast-quality video content,” he says.
Magazine brand Grazia runs its own Grazia TV station on its website, while its online-based competitor iVillage is also investing in video. Meanwhile, AOL announced last month that it is developing more than 15 video web series using original content in a range of genres to run across its Huffington Post Media Group sites. These series will join its 300,000-strong library of premium videos.
It is not just media businesses either. Computer business Dell and tea brand Twinings are also using video. As Dell global mobility online merchandising and content manager Stephen Jio explains: “Video is becoming very interactive and that provides marketers with the ability to seed product and brand messaging within a video and allow the customer to become more involved with it.”
The reason that so many companies are keen to get involved is clear. YouTube, which accounts for 70% of all UK online video traffic, according to Experian Hitwise, is also expanding its long-form content. It has rolled out an online movie service in the UK following a string of tie-ups with major movie studios, including Warner Bros and Sony Pictures.
The rise of specialist video ad exchanges, such as Spotxchange in the US, suggest there is scope for even more development in this area. Broadcasters will have to contend with the increasingly competitive propositions from internet companies, including YouTube, which also accounts for 75% of all online video viewing, according to Nielsen.
YouTube has innovated with a suite of interactive video ad formats under the umbrella brand TrueView family. The first to roll out was its skippable ad formats. These let YouTube viewers skip the ad after five seconds, and the advertiser is only charged if the ad is watched for at least 30 seconds.
The skippable ad format has become so popular with advertisers it now accounts for half of all pre-roll ads that are run on YouTube. Bruce Daisley, head of YouTube and Google Display says: “New ad formats have allowed advertisers to get involved in video in different ways, and formats like skippable pre-rolls have led to advertisers being inspired by only having to pay for a viewer’s full attention.”
Other innovative formats include First Watch, designed to let advertisers reach users as they watch their first video of the day. The latest to roll out in the UK is In-slate, a format created specifically to run against long-form content, that allows viewers to choose between different pre-roll ads from different brands.
Twinings is one of the brands to have tested the format. It kicked off an integrated campaign called Gets You Back To You, targeting women aged between 20 and 60. The ad was created to encourage female viewers to take 10 minutes out of their busy daily lives to relax with a cup of Twinings tea.
Twinings head of digital and ecommerce Alexander Sandover explains that the skippable format played a core part in the campaign. “In just under a month, total ad views exceeded 1 million, with TrueView skippable ads driving 70% of total views,” he says.
“The results were also delivered at excellent value – at a cost-per-view of only £0.02 and a view rate of 50% above industry average, we were able to make incremental reach to TV a reality,” he adds. “These are exciting new ad formats that we’ll be investing in more.
“We can do retargeting from the skippable ads, which means if you have seen an ad and engaged with the brand when you are in other areas of YouTube, we can serve content from our channel we think is relevant for you,” he says.
Red Bull, M&S and Adidas were among the first to use Channel 4’s VOD format Ad Elect, launched earlier this year, which allows viewers to choose between different ad creatives from the same brand ahead of the content they watch.
Media agencies appreciate that online video offers them incremental reach
Channel 4 commercial controller of future and digital media advertising Ed Couchman explains that around a third of its 4oD channel viewers choose to select an ad, and those that are selected have a much higher click-through rate (CTR) than the ones that aren’t.
“The selected CTR can be as high as 15%, averaging around 10%,” he says. “Interestingly, even when a viewer hasn’t selected an ad, CTR is higher than our standard campaigns.”
The broadcaster has released an additional four formats – Ad Bloom, Ad Interact, Ad Pop and Ad Social – to complement Ad Elect. Each of the formats features different ways for viewers to interact with the ads ahead of VOD shows.
“We are currently running Ad Interact campaign for Vodafone, where you can request a free SIM card from within the ad,” says Couchman. “Mikado is the first brand to use Ad Bloom to showcase additional video content and a Facebook competition. Barnardo’s, H&M and McCain are all signed up to use ad social.”
But even though broadcasters are creating online video formats, research shows that bespoke video ads created specifically for the internet are more effective for driving engagement than repurposed material. Car insurance brand Swiftcover has hedged its bets on bespoke online video ads, finding they outperform repurposed TV ads in both CTRs and brand favourability.
It monitored response to a campaign featuring popstar Iggy Pop for one month. Viewers were divided into two groups, one of which was shown the same swiftcover.com 10-second TV ad four times, while the other was shown four different online-exclusive ads. CTRs for the bespoke online ads were a third higher than the TV counterpart, and the majority of viewers (73%) ranked the bespoke ads as more favourable.
However, Channel 4’s Couchman believes the reach of digital channels is not sufficiently scalable to always justify the cost of creating a bespoke online video ad.
“Media agencies know and appreciate that online video offers them incremental reach and coverage of an all-important young, upmarket audience who don’t watch much TV,” he says. “But the reach is still relatively small – around the size of a small digital channel. So the capital cost of producing specific online video ads is restrictive when compared to the reach.”
However, he notes that media agencies are developing online video to build anticipation prior to a linear launch, using it to maintain a message when off air as well as covering the incremental reach.
Dell sponsored the third web-only series of comedian David Mitchell’s video series Soapbox this May [see viewpoint, page 51]. The series launched on ChannelFlip, Dailymotion, Digital Spy, Facebook, Guardian Online and YouTube, as well as Apple and BlackBerry podcast apps.
In the first four months, it generated over 4 million views across all the channels. The series was viewed 515,901 times on Guardian Online, while YouTube generated over 2 million views.
As part of the sponsorship deal, content business ChannelFlip developed a Dell-branded video player to run on the Guardian site. During the series, Dell ran a competition episode that fed back directly to its Facebook activity. The computer company’s website then saw a surge in traffic, with 15,000 people visiting the site as a direct result of watching the series.
However, advertisers looking to invest in bespoke online video advertising must pay equal attention to distribution. There have been cases in which brands have invested hundreds of thousands of pounds in the creation of premium-quality video content, and then failed to seed it properly, with disastrous consequences.
One particular brand, which cannot be named, recently spent £750,000 on an online video campaign, which only got 15 views. In all likelihood, the brand would have commissioned a big production company, which charges TV rates, to create the campaign, only to thrust it on YouTube without any promotion or engagement with the people who run the site.
But for those companies that take the time and opportunities to get online video right, the rewards are obvious. The broadcasters may have been first into the market, but they need to watch out for competitors from every sector and business area. As the IAB’s Wallington says: “The inventory is there and advertisers are using it.”
Global mobility online merchandising and content manager, Dell
At Dell, we have seen both purpose-built and viral social videos help customers learn more about our products, as well as generate interest in new products.
An example would be our Dell Duo viral created for social distribution. When we released it as a teaser, it had over 250,000 views in the first 72 hours. Another example is for the launch of our Dell Streak 5 tablet/phone last year. We created a video that has had more than 800,000 views, mostly through viral republication.
Video for internet should be bespoke and not just a copy of TV material because the social community expects unique content.
Critical messaging can be quickly created and presented via video. It also lets marketers manage potential issues swiftly and compassionately through the use of a spokesperson or executive.
Our relationship with [media content business] ChannelFlip is a great example. Our video series David Mitchell’s Soapbox has given us excellent exposure to an audience of early social media adopters and potential customers. It’s had over 4 million views across all digital channels in four months [see main copy, page 52].
Viral videos provide customers with a peer-trusted experience. We know through various research that they find their friends more believable than companies.
Ratings and reviews are featured on Dell.com, both good and bad, so customers can see honest feedback on products. Virals take it a step further, giving viewers the chance to see the context of the feedback.
The perfume shop
High-street retailer The Perfume Shop ran a six-month online video campaign last summer, centred on promoting its range of celebrity-branded fragrances to 16- to 36-year-old women.
The Perfume Shop’s ecommerce manager Natalie Walker explains/ “For us, it is essential to be part of the growth and domination of online video advertising, and recognise the benefits and results driven by online media.”
The retailer used a YouTube tool that allows advertisers to directly target specific pieces of video content, rather than the platform as a whole.
The Perfume Shop worked with pay-per-click specialist Net Media Planet on the campaign, using the YouTube tool to make perfume advertising appear on videos on the site featuring celebrities with perfume lines, such as singers Kylie Minogue and Beyoncé; and actress Sarah Jessica Parker.
The campaign was also aligned to the publicity plans of the celebrities, so every time one of them released a new album or film or had a trip to the UK, the ads were targeted to the video promotions.
Over the six-month period, the ads attracted 9 million views. In addition to direct click-throughs, the brand also saw an impressive 236% return on investment on a ’view-through conversion’ basis, whereby consumers that saw the ad then looked for the brand through a search engine.
Additionally, the revenue for the celebrity fragrances – up 193% – generated through YouTube outstripped the revenue from search engine PPC alone. This was a first for The Perfume Shop and was a significant achievement for the campaign. The results did not end there: an analysis of the effect of YouTube PPC on search engine traffic revealed a positive impact on Google traffic volumes long after the campaign was launched, showing a long-term impact on the brand reputation too.
The company says the results of the six-month trial were comparable to the reach it would have seen from a TV campaign. “Today’s media is focused online with many traditional forms taking a back seat when it comes to market share,” says The Perfume Shop’s Walker. “With the influx of smartphones, tablets and the accessibility of online media, consumers are able to access news, videos and music in an instant.”
UK managing director,
Online video gives you a way to create a more personal conversation with consumers. Video content is easy to share and lets viewers interact with your brand.
For example, we recently ran a video campaign for luxury accessories company Longchamp. Viewers chose where the content took them as they went on a virtual ’treasure hunt’ around Paris. This type of video gives the consumer a branded experience, while creating an opportunity for conversation around the campaign.
In terms of measuring success for such projects, we don’t just measure the number of views and the length of consumer engagement. We use advanced monitoring tools to report extensively on the actual conversation that has occurred around the video, as well as where it has been shared.
There is endless innovation occurring in the online video space. First, there’s ever-increasing interactivity. We worked with eBay on a project that involved our social publishers – fashion bloggers in this case – running a competition on their respective sites. Winners were filmed selling clothes on eBay and accompanying the bloggers on a shopping spree with the proceeds.
There’s also innovation in social gaming. We now offer players the chance to progress through stages of a game by watching a branded video. Advertisers can tap into the millions of people playing social games and gain huge reach for their video campaigns within a targeted audience, which has opted in to watch 100% of the video.
When creating videos, follow these rules:
- Keep it short and snappy Eight-minute tutorials rarely keep consumers’ attention; we see completion rates of around 65%.
- Unique content is vital Vodafone is very good at using its exclusive relationships with racing drivers Jenson Button and Lewis Hamilton to make original, fun and entertaining content.
- Include your branding near the start of any video If only 65% watch the whole video to the end, you need to ensure that the other 35% have at least seen your brand.
- Distribute it in the right places When you use our network of social publishers, we often encourage content – sponsored conversation – to be written around the video. This increases the opportunity for interaction between the brand and its customers.