Increasingly we find ourselves playing matchmaker between video producers and advertisers, investors and video-sharing sites (i.e., “the money”). Sometimes we are simply helping a friend, and other times we consider this an unofficial service for top content creators. It makes sense that TubeMogul would informally fill this role as we are at the nexus of online video – content creators are our customers, video sites are our partners, and advertisers increasingly rely upon our aggregated analytics.
Today, a well known video producer approached us to see if we could help him get a new project funded – a short web series with committed celebrity talent. The project is not yet public, but suffice to say that the celebrity in question would draw a large and targeted audience. Given this, the proven track record of the producer, and the relative low cost to sponsor the series, is anyone else surprised that the project has been difficult to get funded? Get in touch with us if you are “the money” and want a sneak peak at the project.
There are many great nuggets from this interview. One thing of note is how Hanlon feels that the new medium’s ability to target allows (or will allow) advertisers to focus on quality rather than quantity, which is a huge sea change.
He notes:
…technology allows traditional programmers and ad sellers to offer advertising in a more sophisticated manner. This unbundling has historically been a tightly wrapped packaged of availability, buttressed by a less than elegant measurement system (example, Nielson) that has given us a relatively crude measurement device called ratings, and demographically oriented at that. We are now able to measure more granularly. That brings an increased sophistication of audience definition that goes far beyond a generic grouping.
Hanlon goes on to say that new technologies provide opportunities that make the game “really less about mass and scale and more about targeting and quality…. the only way to achieve the scale that marketers need to be successful is for agencies and marketers to aggregate numerous audiences on their own.”
Clearly this is what the niche content players and micro-television networks like Next New Networks and Revision3 have been thinking for some time. The big questions are:
- Will media buyers agree with this (and when)?
- Will higher quality audiences through better targeting translate into higher CPMs (and when)?
I’ll let you know as soon as I have the answer. Please do the same.
We were fortunate enough to speak with Greg Baumann a month ago, right about the time he was launching Web Video Report, the new publication on “The Business of Web Video.” Right on! We like that business.
If you haven’t checked it out yet, you should. Baumann is the editor and comes over from TelevisionWeek (both Web Video Report and TelevisionWeek are publications of Crain Communications). He has already built up a nice library of case studies.
In this particular report, “Price Survey: What Do Web-Video Ads Cost?” comparisons are made about the cost to place a web video ad on various sites. Most sites noted are in the $10-$40 CPM range, with Myspace at $25 CPM, Break.com and Metacafe both ranging from $10-$35 CPM, No Good TV at $10-$40, and WSJ.com at $90 CPM. YouTube has a $50K requirement within 90 days, with a homepage roadblock at $100K per day.
WellcomeMat put out an interesting blog post recently titled, “The Beginning of the End for User Generated Video?” In it, they basically state that the reluctance of advertisers to plop down money in UGC will kill the space, and that moves by ManiaTV.com and recently Brightcove.tv are indicators of what is to come.
This is certainly not a bad hypothesis to make. The industry does need ad dollars to survive. However, it appears to us that a growing number of independent content creators are getting better and better at producing quality content, and this trend will continue as better tools become accessible for less cash and the availability of how-to information make it easier to hone one’s film-making skills. There are valuable brands being created as episodic/serial content that are in fact user generated videos. And more are on the way.
In addition, the lack of advertising dollars isn’t just about brand risk - being paired next to unfavorable content. It’s also about a perception that there aren’t enough video impressions to make the spend. This could change, though, if growth in viewing habits continue, if more data comes in on the value of an online video impression vs. impressions in other media, or if advertisers realize the viewership of a single piece of content is far greater than what is seen on one video site. Or maybe advertisers won’t even have to realize these things… maybe they’ll simply need to place bets in online video because the majority viewers they are targeting are found getting video content online.
(Not the opiod kind)
We were excited to see in today’s (8-28) Wall Street Journal the article “Web’s Niche TV Programs Win Sponsors” (membership required to see full article), Irina Slutsky and Geek Entertainment TV with a big feature on their GoDaddy.com sponsorship. Also featured was Next New Networks, the network of micro-TV networks out of New York with twelve networks launched so far (see them up close and watch them grow here), and mentions of “Alive in Baghdad,” “Wallstrip,” and “Break a Leg.” The fact that this is big news is BIG NEWS. Niche content producers making money through web video and getting mainstream press - this is a good indication of what’s to come. As providers of tools that help distribute and measure web videos, we think we can help catalyze sponsorship for our users.
But as Emily Steel writes in her article, “Advertising on niche Web TV shows isn’t for every marketer. Not only are audiences relatively small, but pricing models and measurement systems aren’t yet established.”
Well, we’re happy to provide the measurement!
Way to go GETV and the rest of the creators mentioned - you are paving the way!
Much has been said about the need to figure out advertising models for online video. Viewership is moving online at a rapid pace, but advertising has yet to follow at the same rate (despite this year’s 79% growth over last year forecasted by e-Marketer).
Most agree pre-roll ads aren’t the solution, and there are a plethora of companies working to create a winning solution. But YouTube’s announcement to overlay videos with advertising is the first to make a big splash beyond the pages of the blogosphere, which isn’t a surprise, since they are the market share leader by a long shot (49% by recent estimates). What’s great to see is the data YouTube has shared on the engagement of the ads, which are clicked 5 to 10 times more than banner ads (NY Times article) and 75% of those that clicked watched the entire ad (more under the term of “participation” here).
This is great news for video publishers, especially those creating online productions as a full-time gig. Is YouTube the only one with this type of technology? No. VideoEgg has had this type of technology for over a year, and creators can also use technology such as VideoClix on their own sites to do much the same as the new YouTube ad serving technology, but by clicking on objects in the video. I haven’t used VideoClix, though I saw them demo at last month’s Pier Screening event in SF.
By many counts, over 300 million online videos are streamed daily. It’s hard to believe that YouTube was only started in January of 2005 given the incredible global consumer demand. While the models for monetization of these video streams really haven’t been figured out yet, the market is generally optimistic.
We at TubeMogul believe that better viewership data will help enable advertising models in this space. Through the development of our cross-site aggregated analytics tool, we have discovered that there is a fundamental problem that must be addressed for the online video industry to thrive financially – the lack of standards around what counts as a “view.”
How an online video site records a view for their online videos varies greatly from site to site. We conducted research to test such differences across eight of the top video sites (results can be seen in this report). While one site may count a view every time the play button is clicked, another might only count finishes. Further complicating the issue is how sites calculate views on embedded videos, page refreshes, and views from the same IP address. Therefore, an advertiser looking to use viewership data to allocate ad inventory or place viral videos has no comparative ability at this point in time. This lack of standardization has stymied business model growth for online video sites, content producers, and advertisers, and will continue to hamstring the industry until standards are in place.
We feel that it is incumbent on the leading video websites to come together to discuss and agree upon measurement standards. TubeMogul is prepared to host an event to get the dialogue started. Please contact me if you are a principal or senior executive at one of the top video sharing sites and are interested in participating in the standards effort – mark@tubemogul.com.
We’ve been watching the promotional videos on the front page of YouTube recently, and noticed that L’Oreal and Sierra Mist are often arranged side by side, or at least are regularly displayed in the promotional section together. Taking a look at a chart comparing the two, you can see that they are pretty tightly correlated.
L’Oreal vs. Sierra Mist
This is interesting to us, because it shows that the two promotions have about the same chance of exposure, yet the L’Oreal videos are getting a lot more impressions. What explains it? We looked at the number of videos, when they were put up, and which received comments and ratings, and we also evaluated the production value. When we check out the details behind the videos, we see that L’Oreal has only two videos (both put up on 5/30), and one makes up the bulk of the viewership, comments, and ratings (82% of the views vs. 18% for the less popular video). The popular video is user generated content, and has rough production quality.
L’oreal Total and Individual Videos
82%, 18%
L’Oreal Comments
L’Oreal Ratings
Sierra Mist has four videos up, and two of them are close in popularity (52% and 41% of views), but not nearly as popular as the popular user generated L’Oreal video. In addition, the production quality is much higher for the Sierra Mist videos. This supports what others have been saying around the web (read Alan Schulman’s article, “As Web Video Becomes More Low-Fi, Maybe Your Pre-Rolls Should, Too“): you can’t simply take your high quality 30 second ads and cut them down for the online medium. And though Schulman is referring to the pre-roll, his recommendation can be applied outside of the individual video: Your viral video should match the quality of the surrounding content. If it’s surrounded by user generated content, low-fi is probably called for.
