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How Video Will Win the War Against TV

Video is largely in demand with publishers and advertisers alike. In fact,eMarketer has predicted an 84% increase in programmatic video ad spend this year. But recent trends and persisting challenges are threatening the current ecosystem.

During a recent roundtable hosted by PluggedIn BD, experts from the worlds of publishing, advertising, and technology gathered to discuss the current size of inventory, the struggles with showing results, and how digital video stacks up against television. Here are the top four truths this roundtable revealed.

Truth 1: Content is not just an excuse to show an ad.

One of the major challenges publishers grapple with is providing enough inventory that’s of enough quality to scale a business. As Andy Regal, Global Head of Video at the Wall Street Journal, said: “We’re in the business of the slog of daily journalism, trying to gain one more viewer each day. We’re trying to drive more traffic and create enough inventory. Our challenge is the delta between videos viewed and ads served.”

Yet in many cases, when that video content is just an excuse to show an ad, we’re losing sight of the consumer. Instead of using video content to increase engagement, we’re doing something that’s ultimately just annoying the viewer for the sake of the advertiser.

At the end of the day, publishers need to drive eyeballs to high-quality content. With people chasing views as much as possible, there’s pressure on editors to make great content. And fundamentally, the goal for publishers has always been to tell the best stories. It’s also a win for advertisers: with quality content come quality audiences.

This is a rallying cry to the industry: Let’s stop creating content just for the sake of ads. We need better video. Period.

Truth 2: Interactivity is the future.

Across the web, every user has a unique experience. It’s remarkably explorable and personal. Except with video. As it stands now, a video experience remains constant no matter who presses play. This is something that’s ripe for improvement.

The folks at Interlude think they’ve seen the future. And the future is interactivity.Interlude is a platform that allows video to adapt and respond to each user, just like any other medium. It’s akin to a video game. After hundreds of campaigns for advertisers and hundreds of pieces of content in collaboration with publishers, engagement rates are over 70 percent. Because they’re creating content that’s personal and unique, Interlude is able to integrate brand messaging within video stream in a seamless way, creating an integrated native experience.

And with an interactive video, there’s an actionable event that we can measure. Which means interactivity may also help solve that problem we have with metrics.

Truth 3: The pricing model is in the wrong hands.

Right now, we’re selling online video mostly on a CPM (cost per impression), which simply doesn’t make sense. It’s not about the views; it’s about what happens next. As an industry, we need to move past old school metrics. We’ve been beholden to how agencies and advertisers want to interact, and from a transactional standpoint, it’s very difficult to shift that metric. Brands are largely in the driver’s seat.

In the rest of the advertising world, everything is performance driven. Yet we’re over here worrying about clicks while television continues to hold the big budgets. We need to come back to proving that we spent X dollars and sold X pairs of shoes. If we don’t solve the marketer’s problems, then we’re never going to get digital video to the level that it generates equal (or better) performance than TV.

As we attempt to prove the value of video in a fragmented world, we have to focus on proving success. Take Interlude for example again: With a model that charges for engagements rather than impressions, advertisers are happy to pay because they know exactly what they’re getting. So the team is able to deliver more value to the brands that are willing to take risks, while they’re able to enjoy a better model than if they were selling pre-roll with standard rates, simultaneously investing in the media by creating a differentiated product for the consumer.

It may take time for things to shift, but if we’re able to demonstrate the success of a better economic model (for everyone involved), we’ll surely start to see attention turn away from older models that are less effective (and less lucrative).

Truth 4: Video should stop trying to be TV.

Nathan Brown, formerly of Complex and The Huffington Post, reminded us: “We’re competing for eyeballs and those eyeballs want to watch great content. And TV has the biggest budgets to produce the best content.” These days, The Huffington Post is competing directly with Netflix.

While content creators are underfunded, they still have a secret weapon: data. With data about intent and purchasing, we have the ability to target so well that we blow TV out of the water.

The broadcast infrastructure has been built around linear video. If the digital world continues to push out linear experiences, we will never beat that ecosystem. So how will we win? By creating an ecosystem that leverages the capabilities of digital. This means interactivity, personalization, and targeting. Sure, we’ve made a lot of advances in the distribution of linear video, but we haven’t actually advanced the medium itself. We need to push further.

We will never win while we’re still playing on someone else’s turf.

Roundtable Participants:

Interlude: Jim Spare, President & COOPixability:

Pixability: Art Zeidman, EVP / Chief Revenue Officer

SelectMedia: Sagi Gordon, CEO & Co-founder

StreamRail: Iri Amirav, CRO & Co-founder

ConvertMedia: Yoav Naveh, CEO

Vox Media, Inc: Joe Alicata, VP Video Product + Revenue Product & Operations

Investopedia: Matthew Kerr, Manager Ad Operations

WSJ: Andy Regal, Global Head of Video

LittleThings: Justin Festa, VP Revenue

Nathan Brown, Video Media Executive

Anthony Risicato, Moderator

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What to Expect from the Year of Video

PluggedIn “Digital Content” Roundtable – Commentary

May 20, 2010
Comments by Guillermo Kopp / @GuillermoKopp
Chairman, GUAU Corporation

PLUGGED IN – FOLLOW UP THOUGHTS

1. Shifting Consumer Habits: Video, social media, and text content will add value synergistically to meet budding customer needs. Digital magazines on portable tablets will open creative innovation avenues.

 Comment: We find that multitasking viewers will rather glance at several screen areas than read. Video will be a key means to capture the viewers’ attention and prompt them to buy. Wise advertising will mix video with text ads, and give consumers better control. Effective filters should avoid overload.

2. In Contempt of Content: Smart ads double up as useful content and customers love it. People are curious and want to stumble into novelties. Consumers will know when ads are disruptive to them.

Comment: We welcome short video clips (less than 30”) with relevant infomercials from credible sponsors. Fairness and integrity of the brand, fun, independence of opinion, and transparency in the advertised facts will establish credibility at par with the deeper content of specialized articles.

3. Demographics: Facebook fans endorse or subscribe to innovative concepts and features. Small social ecosystems interwoven across common behaviors and interests will lead to more granular segmentation.

 Comment: We look forward to strong growth in emerging segments. Growth should overcome the marketing inertia of big firms that stick with the purchasing power of established audiences. Advertisers must tap the exploding number of Twitter and other social media interactions with a localized focus.

4. Personalized Interaction Experience: Purposeful integration of current facts, opinions, music, video, text messages, animation and live interaction mechanics will be instrumental in engaging customers.

 Comment: Consumers will spend significant time interacting with a growing number and smarter mobile devices that they carry everywhere. We envision a day-to-day, multimedia transactional business model that builds on the awareness of the customer location and acts upon personal triggers.

5. End-to-End Marketing: Agencies must orchestrate a creative suite of ads, content, incentives, and promotions across channels, track the online experience, and credit its influence on purchasing decisions.

 Comment: We believe that newly designed interactive content should work appropriately and purposefully across multiple customer touchpoints. Integrated metrics across print, TV, online, and mobile content must attribute purchases that occur later in a physical store or third-party site.