Online Video: Show me the money
In what feels like a long time ago but was only in October, we wrote that many advertisers have already jumped on the video bandwagon but that not all of the dollars available have yet to find a home. Even people who don’t necessarily want to buy would like to understand how they could buy. There is more than enough inventory, not to mention a new video ad network or video ad serving solution popping up almost daily. What there isn’t though is a proven model, especially for those in the performance marketing space. In this week’s Digital Thoughts, we might ask more questions than we answer, but we start to dig into how this exuberance for video ads has, and will turn into dollars for performance advertisers and the brand marketers paving the way.
Performance marketing through video ads happens today. It’s a small market and the solution absolutely inelegant, usually someone putting a display ad or similar advertising at the end, but it happens. How do they do it? Most videos play as flash files. First, flash can contain links. If it couldn’t none of the innovative LowerMyBills ads would work. Second, it takes little time and even less money to convert a 300×250 image into flash format. Stick it on the end of a user generated clip by adding to the play list, and you end up with a homegrown post-roll ad. What it isn’t, though, is what we might think of as video.
Outside of the branded commercials, the rest stink because today’s online direct marketers know little to nothing about video. If they did, we might see something other than a banner ad shown at the end of a clip. The brand advertisers have led the way because they came from video, i.e. TV. They learned from their Web 1.0 experience of not monitoring placement closely enough only to find their ads appear on inappropriate content. It might mean fewer total video dollars and impressions, but from an industry level their selectivity is a good thing. Otherwise, we might see money thrown around without regard, only to dry up and take with it so many of the sites that relied on their money.
Brand advertisers, especially those with TV experience, make for a natural fit to online video ads, but there is another type of television advertiser that might also make for a good fit, one that I mentioned last week – infomercials. Those in the infomercial business care about one thing – making money by selling products. They can’t compete with the brand dollars for prime spots as those spots do not generate enough sales to cover the markup. Those in the infomercial business have two huge legs up in the world of video ads – they know how to sell and they know how to sell using video. They might not know how to sell in 30 seconds or less, but with their experience they could get close fast. What they lack, though, is the web experience.
While web guys have the local knowledge on how and where to buy, they lack an equally, if not bigger, piece of the puzzle than the offline direct marketers – production experience. Most web ads, outside of certain rich media formats, cost relatively little to create. And, if these ads get stale, or don’t perform well, making new ones takes little time. Video just doesn’t work that way. They take more time and a lot more money, and, for the most part, you can’t very easily rework it or touch it out without redoing it. Time and cost aside, how many in the online space, especially online direct marketers, would know where to go to get an ad created? Would we even know how to create such an ad or what makes for a good ad? What skills are we going to need to learn to do it?
Somehow this gap of knowledge will fill where those offline will learn enough about online and those online will learn enough about offline to make money with video ads. Right now, it might sound daunting seeing how big the gap is. But what looks daunting to one contains opportunity for those willing to try. Online lead generation companies like Plattform Advertising that seemed old school by still having a video production department now look like geniuses who can jump out ahead.
Cliches aside, online video will shake up advertising as we know it. We are experiencing the beginning of a transformation. Even more, any can have a roll in shaping how it plays out. We have a clean slate. There is room to try ideas that haven’t been done before, to try ideas that might not work, but at least have the room to try. Even more amazing is what will happen once offline and online video come together and vice versa. Will it be the Toyota’s of the world figuring out video first, embracing aspects of direct response, or will it be TheUseful and/or University of Phoenix who become the powerhouses first?
