Web Video Marketing: The Birth of a New Direct Marketing Category
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1 Web Video Marketing: The Birth of a New Direct Marketing Category Web Video Marketing Council - July 2007
2 Table of Contents: Abstract The Rise of Web Video on the Internet The Need for More Engaging Direct Marketing Channels The Emergence of an Important Web Video Marketing Application: Web Video Microsites... 4 Critical Components of Effective Web Video Marketing Campaigns Digital Canvas TM A New Technology Platform for Web Video Marketing Conclusion - Web Video Marketing is Here
3 Abstract This report, which the Web Video Marketing Council believes is a first-of-its-kind definition of the emerging web video marketing category, discusses how online video isn't just for advertisers anymore; explains the importance and benefits of web video microsites for direct marketers; and explores how new technologies have enabled the easy creation, distribution and measurement of effective web video microsites and marketing campaigns by those without advanced technical skills. Web video marketing is here. It presents exciting opportunities for marketers, communicators and salespeople because effective web video marketing campaigns are engaging, interactive and measurable as well as portable, intuitive, viral and easy to manage. Just as direct marketing channels have changed over the years, web video and rich media have the potential to change the rules of the game to the extent that direct marketing will never be the same. As Ian Schafer, Founder and CEO of Deep Focus, put it in his commentary, Video's New Rules: Evolve or Dissolve (Online Media Daily, March 2007): It's hard to play a game when the rules constantly change. However, unlike generations before, marketer-created or brand-sponsored video is now versatile and portable enough to mean much more to consumers than a commercial. Exhibit 1 Graphic image of a new type of portable rich media video microsite called a flimp. Copyright Web Video Marketing Council. All Rights Reserved. 1
4 The Rise of Web Video on the Internet During the first ten years of the Web, content presentation was focused on text and graphics. Today, however, video is the fastest growing content segment of the Internet. With the continued growth in numbers of broadband users, video is the next big thing in the online space. According to Forrester Research, the next generation of Web sites will be video-heavy. Users will be as much a part of the experience as the content. The early stages of mainstream adoption of Internet video are happening now. Currently more than half of adults watch online video on a regular basis. David Hallerman, a Senior Analyst at emarketer believes that more than any other advertising format, Internet video has the potential to blend multiple marketing elements together branded entertainment, paid search, viral marketing, consumergenerated media, behavioral targeting, website brand marketing and marketing. As new broadband and mobile-based digital media technologies make web video available to even larger audiences, they will provide a conduit for ever richer, more engaging, interactive marketing experiences. Consumption of web video as marketing messages will increase and will reshape the direct marketing channel value chain as we know it today. Just as direct marketing channels have changed over the years, web video and rich media have the potential to change the rules of the game to the extent that direct marketing will never be the same. A Few Reasons: If there is one sweeping trend that provides a monumental opportunity -- and challenge -- for digital marketers this year, it's the harnessing of online video as a sales, marketing and advertising platform.the video revolution is here, but it's still [in its] very early days. Geoff Ramsey, CEO emarketer The explosive growth of web video can be attributed to a number of factors, including the rapid adoption of broadband and the ability for web sites to support and display video. Online video offers the ability to display moving images and sounds in a context that emotionally resonates with the Web viewing audience. And, unlike television, the impact of web video can be measured directly and immediately. Broadband has become increasingly affordable and available to the marketer's target audience. Along with further improvements in technology, such as quality improvements in online audio and video and improved compression technology that has further reduced the size of digital files, broadband has enabled the delivery of stunning and engaging marketing messages around the world. Apple's ipod and other similar gadgets opened a whole new market for the online delivery and storage of music, and increasingly popular podcasts. Formats such as Adobe-Macromedia Flash technology make it possible to embed video both within a web site as well as within custom applications including RSS readers and aggregators, messages, search landing pages, blogs and traditional desktop applications. Flash technology has become the most powerful enabler for the adoption and distribution of video online because it is readily available on 95% of all computers. Copyright Web Video Marketing Council. All Rights Reserved. 2
5 Web video has generally been viewed as the convergence of TV and Internet, and has followed a traditional ad supported revenue model To date, the marketing applications for web video have been largely based on a traditional advertising model. That is, aggregate video content to develop a critical mass of video viewers on a web site or network of web sites in order to sell advertising. Such advertising is offered to marketers in different formats through ad serving networks and platforms and is priced according to the number of viewer impressions (CPM s) or click-thrus generated by the advertisement The predominance of the web video advertising model reflects a consistent industry and big media view that the online video marketplace is fundamentally about the convergence of broadband Internet and traditional TV. Leading web video distribution companies such as Google (YouTube), Yahoo!, Fox Networks (MySpace), AOL, MSN and Brightcove, as well as traditional media companies like Viacom, NBC, ABC and CBS all base their online video business models on advertising. As more and more people participate in web video viewing, online video advertising revenues have increased substantially. According to Jupiter Research, spending on video media advertising exceeded $400 million in 2006 and is expected to grow to $1.5 billion by Web video is the fastest growing segment within the $20 billion online advertising industry. In response to this growth, media companies, publishers, entrepreneurs and venture capitalists are flocking to the emerging web video advertising market, creating new content distribution platforms and video ad serving networks in order to service a hoard of up-and-coming web video publishers who seek to participate in the YouTube-driven online video phenomenon. Despite the buzz, web video advertising isn t relevant or practical for most marketers While the web video advertising model is very appealing to interactive agencies, online ad networks, media companies and large consumer oriented publishers and advertisers, it is not an optimal marketing choice for most companies that are focused more on direct marketing than brand advertising. Advertising on large web video media websites like Yahoo!, AOL or YouTube is expensive and unfocused, reaching too broad an audience. In addition, inventory on the major media sites is often pre-sold to media brokers and agencies and can require large minimum contract commitments. As a result, the vast majority of companies and organizations are not considering web video as a viable marketing opportunity, except for the occasional company video posted on YouTube or one of the other video sharing websites. The Need for a Web Video Direct Marketing Category It is a well known fact that traditional direct marketing channels are not performing as well as they did ten years ago. Direct mail response rates have consistently declined due to over saturation, while print and delivery costs keep rising. Telemarketing has been severely limited in the past two years by Federal Do Not Call regulations and legislation that imposes large fines on telemarketers who make unsolicited calls to phone numbers on Do Not Call lists. Trade events are both expensive and time consuming given the number of qualified leads that are generated. Response rates for advertising in print publications like trade magazines, newspapers and yellow pages are declining due to more readers accessing information online. Finally, tracking and measurement of results from traditional marketing channels lags behind the measurement capabilities of most online marketing channels. Copyright Web Video Marketing Council. All Rights Reserved. 3
6 The trends in direct marketing are online and towards measurable results As a result of the limitations of traditional direct marketing channels, marketers are shifting budgets from offline to online channels and focusing more on database marketing to get measurable results. The Direct Marketing Trends study conducted by CRM Magazine summarized in the following graphic found that in 2006, 75% of surveyed direct marketers said they increased spending on webbased marketing and 70% of marketers invested more in marketing. This compares to 45.6% and 30.8% respectively for direct mail and telemarketing. Web-based Marketing Customer Loyalty Databased Marketing 49.0% 43.7% 28.7% 26.5% Marketing 45.6% 23.4% Other Data-based Marketing 45.1% 13.2% Direct Mail 34.2% 11.4% Telemarketing 23.2% 7.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% Increasing Increasing Significantly The surge in web video usage and in marketers' need for more engaging, responsive and measurable marketing channels, coupled with the strong trend toward database and web/ based marketing spending is creating the opportunity for a powerful new direct marketing application called Web Video Marketing. The Emergence of an Important Web Video Marketing Application: Portable Web Video Microsites The same web video trends that are beginning to disrupt the $60 billion television advertising market may soon impact the $60 billion direct mail industry. The integration of rich media technologies, web video and direct response marketing will propel the development of a potentially large new direct marketing category: Web Video Microsites for direct marketing, sales and communications. The emergence of the web video marketing category will impact the way many marketers and communicators view Internet marketing, specifically the role of web sites, marketing, and paid search marketing. In the next few years, web video marketing could very well change the way many companies and organizations market to and communicate with their customers, prospects, employees, stakeholders and shareholders online. What web video marketing is not Web video marketing is generally not part of the so-called "TV/Internet convergence" which is video content broadcasting, distribution and sharing supported by advertising. Rather it is part of the direct Copyright Web Video Marketing Council. All Rights Reserved. 4
7 marketing/internet marketing convergence that includes , paid search and mobile device marketing. For web video content to become web video marketing, it needs to provide an opportunity for viewer interaction and response together with the capability to capture and measure the activity and response data. In this respect, web video marketing content has to provide an opportunity for interaction that can be measured by a built-in analytics component beyond simple traffic numbers. A powerful new direct marketing application Web video marketing can generate higher response rates than traditional direct marketing channels by combining an interactive audiovisual experience with targeted distribution, viral messaging and comprehensive viewer tracking. No other direct marketing application combines all of these features. Existing Channels New Web Video Channel Direct Mail Direct TV Print Telesales Websites .com Text Messages So what exactly is web video marketing? The Web Video Marketing Council defines Web Video Marketing as; A form of direct marketing which uses interactive video microsites as a means of communicating commercial or marketing messages to an audience over the Internet. Web video marketing microsites can be distributed through a variety of Internet delivery channels including , search links, web sites, RSS, podcasts, blogs, Internet-enabled mobile devices and video advertisements. Viewers' interactions with these video microsites are captured and stored in a database. Captured data may then be used by marketers for analytical purposes relating to the effectiveness of the message, for viewer feedback, and for lead generation purposes. The three essential elements of web video marketing messages are: 1. Interactivity. An actionable, interactive message containing audiovisual content and other content elements that provide a call to action. 2. Online Distribution: The ability to easily distribute or push the message to target viewers using Internet communications methods. 3. Measurability: The ability to collect viewer activity and response data in order to measure the result of the marketing effort. Web video becomes web video marketing only when all three of these components are combined. Copyright Web Video Marketing Council. All Rights Reserved. 5
8 Interactivity For the purpose of web video marketing, interactivity is a necessary and highly desirable component. For this reason, web video marketing often makes use of rich media because it results in increased levels of user engagement and interactivity. Studies such as those completed by Dynamic Logic MarketNorms have shown that brand metrics for media rich ads were significantly better than those of non-media-rich ads. Flash technology has emerged as the most common rich media format for web video marketing. This is because it is universally available and can combine high quality, trackable video with a variety of rich content elements such as Flash animation in a single interactive message. Online Distribution Web video marketing provides the ability to deliver or PUSH the marketing message to a target audience using any of a number of available web distribution channels , paid search, blogs, podcasts, RSS, mobile devices and more. Typical web video content is hosted on a web site viewers need to know to get to a specific web site to watch the video content they want. Most mainstream online video is PULL based requiring marketing to attract viewers to the content. Examples of such mainstream online video providers are YouTube and Brightcove. Measurability The third critical component of web video marketing is measurability: the ability to track and report on viewer activities (engagement) and actions (responses) as well as report on the viral activity of the message. Without this measurability component web video becomes more suitable as an advertising channel than a direct marketing channel. Measurability is key to determining the effectiveness of any direct marketing campaign. Web video marketing is no exception; in fact, web video marketing elements create additional tracking points not available with traditional direct marketing channels. Online video offers the ability to track and report on metrics useful to the marketer. Unlike offline video, online campaigns can report on an array of data points that can be leveraged to further enhance a campaign s performance. Data can be viewed at a variety of different levels, including the individual level versus the summary campaign view, geolocation, and viewer actions. Critical Components of Effective Web Video Marketing Campaigns Effective web video marketing campaigns need to contain an engaging audiovisual presentation that includes interactive content elements (beyond video); some level of user control during playback; meaningful measurability; easy customization; viral marketing capability; portability; and cross platform and multiple device compatibility. In addition to the required components of web video marketing interactivity, web distribution and measurability, the five additional factors required to create an effective web video marketing campaign are: 1. Engaging content 2. Portability/universal accessibility 3. Intuitive viewer controls 4. Viral capabilities 5. Ease of use and modification for marketers Copyright Web Video Marketing Council. All Rights Reserved. 6
9 1. Engaging content The audiovisual element of a web video marketing presentation does not have to be a traditional video film. A complete web video marketing presentation needs to be able to deliver an engaging message that consists of at least one - but ideally multiple - rich content components to deliver its message. Video alone doesn't allow for user interactivity, response and measurement. A key aspect of web video is that it can be any type of sensory content, such as Flash animation, moving slide show images, images with voiceovers, etc. Web video is being used in a wide range of disparate formats from 15-second banner ads to long-form documentaries. Web video marketing often has a strong multimedia context in that the audiovisual content is surrounded by other elements such as text, graphics, web links, images, animations, color, etc. Audio, in the form of voice over, music, scripts and sound effects, can add to the richness of the message and enhance the user s engagement. Accompanying text can help set the context for the video message and, in some cases, keep the user temporarily engaged while the video is streaming. Text can also be used to supplement or reinforce the visual aspects of the message. The incorporation of supplemental images into the marketing message can provide additional opportunities for interaction, can add branding to the message, and can provide a delivery vehicle for sponsorship that can offset production and delivery costs. Images can be in the form of static or animated.jpg or.gif files or they may be banner ads, which can optionally be hyperlinked. According to Dynamic Logic Marketnorms, advertising messages with video content deliver three times higher levels of brand engagement than messages that contain only graphics, such as GIF s and JPG s, and outperform these formats in generating user interaction. Interactivity increases the number of data capture points for use in analytics. The interaction with each element in a web video marketing presentation can be tracked regardless of how the presentation is distributed. Metrics can then be used for A/B comparisons, for measuring campaign effectiveness, and for use in determining ROI. Engaging content encourages user interaction. 2. Portability/universal accessibility Portability increases options for distribution. Effective web video marketing messages can be delivered through a variety of delivery vehicles in an message, on a web page, on a search marketing landing page, via an RSS feed, in a blog or via a mobile device. All of these options point to the versatility of web video marketing and its potential as a new direct marketing application. The marketing message that's delivered to the viewer should be contained in a single, compressed digital file that doesn't rely on other files stored locally on the user's viewing device. The presentation should be capable of being played on a variety of digital devices, some of which may not have local data storage capability. Creating a single digital file also eliminates the need for extracting individual files from an archive, reduces the steps necessary for a user to engage with the presentation and simplifies RSS and other distribution methods. Universal accessibility ensures that the message can be easily displayed and viewed by a majority of viewers without proprietary software downloads or reliance on a specific operating system. An effective web video marketing campaign cannot require users to take additional action, such as download a special player or other software in order to view and interact with the message. Copyright Web Video Marketing Council. All Rights Reserved. 7
10 Both portability and universal accessibility result in increased response rates for web video marketing messages. Flash provides excellent portability for web video marketing messages as it delivers them to the viewer in a single, compact swf file. Additionally, Flash Player already exists on over 95% of the computers used to access the Internet today regardless of operating system. For the rare viewer who does not already have the Flash Player installed on his or her device, Flash files delivered to devices that do not already contain the Flash Player provide a link to easily download and install the player software. 3. Intuitive viewer controls Users need to be able to control the playback of the message in case they are interrupted during the presentation and need to pause the video and audio, or in the event they just want to adjust the volume of the audio. Standard controls include Play, Pause and Volume. These controls have become ubiquitous for online media playback. Using standard, easy-to-recognize universal controls increases usability and avoids user frustration. Flash Player has become the most widely installed Internet video format, running on over 96% of all Internetconnected personal computers. The ubiquity of Flash Player ensures that most visitors can view Flash video without downloading additional plug-ins, so you can reach more people with lower development, testing, and support costs. Adobe Learning Center 4. Viral capabilities From a word-of-mouth perspective, the viral nature of online video can be tracked more easily than offline campaigns. The growth of YouTube illustrates the viral nature of online video. Enthusiastic web users continue to forward and refer interesting video clips to their network. The viral nature of online video can help marketers expand their campaigns beyond the initial target audience. Based on campaign measurement, marketers can break down the effectiveness of an online video between the initial target audience and its secondary viral audience. Marketers know that viral marketing is an important and highly cost effective means to spread their message and generate buzz. Because web video marketing campaigns are much more engaging than traditional direct marketing methods, and because the message can be spread around the world instantly with the click of a button or link, web video marketing campaigns should leverage the power of viral marketing in order for them to be considered truly effective. And, the tracking capabilities built into web video marketing campaigns provide marketers with the means to capture lead information for viral message recipients readily. 5. Ease of use and modification for marketers With new emerging technologies, web video marketing will be increasingly easy to develop and deploy and will not require sophisticated software programming, databasing capabilities or IT resources. Web video marketing campaigns will be accessible to most direct marketers and communicators using existing web site and video content. Marketers will be able to create and deploy web video marketing campaigns in a matter of hours and will be able to revise and update a campaign in minutes even after distribution without any programming or technical skills. Marketers will soon be able to create, edit, distribute and track web video marketing campaigns without any help from the IT department. Copyright Web Video Marketing Council. All Rights Reserved. 8
11 Digital Canvas A Novel Microsite Technology Platform Digital Canvas is a new rich media technology platform that enables non-technical users to instantly create, distribute and track secure, dynamic, rich video microsites without programming. Once the video microsites are created they can be distributed to target audiences via , blogs, search links or web links. Every viewer interaction and response including viral activity is automatically tracked and recorded in the reporting dashboard. With a Digital Canvas account, the average college student can create sophisticated, agency quality microsites with built-in distribution and analytics capabilities. Digital agencies will charge anywhere from $30,000-$150,000 for comparable microsites and these projects often take weeks instead of hours due to extensive programming and analytics plug-ins. Digital Canvas generated video microsites are hosted and can be distributed via web links, , blogs, paid search, RSS and other Internet distribution cannels. Each microsite has a distinct URL that supports rich media video content. Primary marketing problem solved With Digital Canvas, interactive marketers can quickly create, edit and distribute dynamic video microsites with instant tracking and reporting of detailed viewer activity and action responses without any technical skills or software programming. Primary features and benefits Using the Digital Canvas technology platform, marketers are able to: What is a Microsite? A microsite is a simple portable, website consisting of a single web page used for interactive marketing, communications, or digital file sharing. Video microsites can be created using new server software called Digital Canvas that allows a non-technical user to freely create, edit, and track rich media web page content using any web browser. Host and share high quality videos on a secure rich media web page with built-in viewer tracking and viral video capabilities. Change, move or resize the web video content in seconds. Create, launch and track engaging viral video marketing campaigns with individual viewer response and activity reporting. Create, launch and track interactive video squeeze landing pages for paid search marketing with instant dashboard reporting. Create, edit and launch video blogs or vlogs with automated viewer tracking and dashboard reporting. A graphic snapshot of a flimp web page used for web video marketing follows. It was created without the use of any programming skills using the drag and drop Digital Canvas software application. Copyright Web Video Marketing Council. All Rights Reserved. 9
12 Exhibit 2 Graphic image of a video microsite created with the Digital Canvas technology. Microsites created using the Digital Canvas technology meet the three primary requirements for web video marketing they are interactive, easy to distribute and measurable. They also meet all five of the important components for effective web video marketing campaigns discussed earlier: 1. Engaging content 2. Portability/universal accessibility 3. Intuitive viewer controls 4. Viral capabilities 5. Ease of use and modification for marketers The Web Video Marketing Council does not specifically endorse the Digital Canvas technology. Rather it is cited as an example of the emerging technologies that will make web video marketing faster, easier and less expensive than in the past. Further, these emerging technologies will increase the accessibility of web video marketing to the majority of marketers, not just a few large consumer products companies and their interactive agencies. One key challenge for marketers is to determine how to evaluate and choose from the everexpanding new-media options. The ideal is to identify and test new platforms that offer a firstmover advantage, that are measurable and that can be scaled effectively to deliver a significant return on investment. From a process perspective, this requires risk tolerance, rigor and speed, which can be significant challenges for organizations to overcome." Shane Steele, Director-Emerging Media and Online Advertising, Coca-Cola Co. Copyright Web Video Marketing Council. All Rights Reserved. 10
13 Conclusion - Web Video Marketing is Here Web video marketing is part of the evolution of a new marketing paradigm that allows marketers to engage target audiences with captivating, interactive, online media experiences that can be developed and delivered: at a low cost, due to the reusability of the components of the message and economies of web distribution with shorter production and distribution times with improved and automated lead capture with customization and personalization with viral, self-propelled distribution, and without geographic limitations. The benefits of web video marketing are inherent. From a practical point-of-view, online campaigns are some of the most simplistic to launch. With the right tools, such as Digital Canvas technology, web video marketers will be able to develop a campaign on their own quickly, eliminating the need to involve IT resources. Distributing web video marketing campaigns through , paid search, blogs and Web 2.0 social media outlets offers potential to leverage the rampant growth of social networking channels with engaging, interactive video messages that are accessible, viral, measurable and increasingly affordable. Web video marketing extends the power and popularity of online video to direct marketing and direct communications. Future technological advances may result in new distribution channels for web video marketing campaigns that we cannot yet imagine. Web video marketing may one day change the concept of direct marketing to such an extent that it will never be the same again. This white paper is a public service of the Web Video Marketing Council. About Web Video Marketing Council: The Web Video Marketing Council (WVMC) is a professional association established to provide marketing, sales and communications professionals with useful news, information, education, and resources related to web video marketing, rich video microsites and viral video marketing. Contact Information: Web Video Marketing Council 2 Hayden Rowe Hopkinton, MA Copyright Web Video Marketing Council. All Rights Reserved. 11
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