Web video monetization still unmastered

Fast Company’s article, “Who will be the Godfather of Web Video” got me thinking about some of the theories behind the monetization of video. A friend of mine insists that despite the evolution of social media, the consumer online behaviour hasn’t changed. It’s emotive, he says, and that has been and will continue to be the way online consumers respond to online advertising. Does that mean we negate the idea of predictability? If so then what is the use of applying retention initiatives? Does that mean that brands have greater pressure to create advocacy in this daunting arena? I’m not convinced of this theory because it assumes that the medium has no bearing on behaviour.

I believe the advent of social media has challenged advertisers to grapple with the issue of not only converting consumers, but also identifying with their needs in an environment that has been programmed to flee the almighty establishment. This rebellious medium understands that the sought-after millenials are not so quick to point-and-click.  I’ve yet to find stats to validate this but at a recent conference I’ve attended for Understanding Youth, it was made abundantly clear when one of the young panel members said to a room full of marketers and advertisers, “We know when you’re trying to sell us something. We know all your tricks and we’re not gonna give in. We’ll just run somewhere else.”

Today’s youth understand the social web and it is a part of their being.  Today’s social media is akin to the freedom revolution of the ’70’s — a way for people create an identity for themselves and carve out a path of existence online. The above notation clearly spells out the need to evolve advertising as the medium and audience evolve.

Web video is still a strong growth channel. According to the article, “it has grown in terms of content production, viewership, however significant revenue and especially profitability — even for YouTub with its massive audience of 69 million viewers — has been largely elusive. Advertisers still haven’t bought into web video advertising mainly because of the vast user-generated content that’s largely uncontrolled.  But the premium content sites don’t seem to be faring any better. Super Deluxe’s shaft by Time Warner, NBC Universal’s DotComedy’s short online stint and Sony’s money-losing investment into the once-promising Crackle — are all examples of this quest for a solution.

Some sites that are doing really well: Tetes a claque, CollegeHumor –> have some things in common: video that’s spreadable; audiences that are sticky. Most importantly — Consistency. Time will tell whether these sites will pave the way and lead others including Google/Youtube through the black hole.

The emergence of this new medium….

I’ve responded to a number of blog posts “Overlay.tv Adds Links and Easter Eggs to Music Videos” and “Hypervideo: Hyperlinking video content” and there is a lot of positive stuff being written about companies such as ours. Interactive video is here but it’s taking some time to sink into mainstream.  It’s ironic:  iTV has been talked about for years –> it was supposed to have emerged by now….yet online video is still a medium we haven’t figured out.  We’re still too far off that iTV phenomenon given that the online video market is still in a state of fragmentation and testing. Everyone’s still trying to figure out the monetization angle. There are still no standard CPMs for video advertising. Formats are continuously morphing in response to the user and advertising views on mitigating annoyance and increasing performance.  The video player is non-standard and the recent partnerships like FOX networks and utargetBrightcove and Bebo; and AOL and ESPN  are results of attempts to spread the net as wide as possible to maximize audience reach. Performance is also another topic that needs addressing. TV has always been a branding medium –>product placement has been the only in-content-type-advertising that is both costly and doesn’t necessarily translate into revenue or traffic. Video has the ability to solve for this given its emergence from the online world, which records tonnes of data on user behaviour and determines likely user propensities. Google has already started this process and is moving quickly to figure this out when the digital home environment comes to fruition.

Most importantly, before all this settles the public has to become comfortable with the notion of video interactivity and the plethora of possibilities from exploring new ways of publishing to new models of revenue generation. The music industry can definitely benefit by creating new engagement possibilities for their artists. It’s a matter of time…hopefully just around the corner…

Hypervideo, IPTV…the holy grail of online video

This is shameless promotion since I am employed by Overlay.TV but I truly believe that this company has the holy grail to the next generation of online video. Having worked at a huge established portal, I understood all too well the challenges with monetizing video. Youtube is still testing the waters on this one. Yahoo! was still using pre-roll video and companion ads alongside of video and commanding high CPM rates that avertisers weren’t buying. What’s more: the monetization of video was limited only to the premium content on Music and News. The video channel itself ironically included only banner options. In all these cases, performance was poor for the most part because the ads were annoying and advertisers attempted to infer relevance to the video content where there was none.

Overlay.TV does a few things: It allows the user to create this relevance by empowering them to be the advertiser. The video also doesn’t have to be premium content but ANY content found on video-sharing sites. Now it’s super easy to be a publisher and add value to any video. On the consumption side, the user has the option to turn off the overlays and watch the video in its original form. Have a look at what I’m talking about: Here’s one I created of IJustine and American Eagle.

Vodpod videos no longer available. from www.overlay.tv posted with vodpod

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