Online video is one of the fastest growing advertising channels in the U.S., and several recent studies indicate that online video will continue to rise dramatically relative to other ad channels over the next few years. As an advertising tool, online video is expected to dramatically outpace growth in search, display ads and rich media.
The Pew Internet & American Life Project's major report on online video last year confirmed that the growing adoption of broadband has resulted in a dramatic increase in viewing online video. Fifty-seven percent of online adults have used the internet to watch or download video, and 19% say they watch some form of video every day. This number grows even more when respondents are qualified by connection speed. Three-quarters of broadband users (74%) who enjoy high-speed connections at both home and work watch or download video online.
While YouTube leads the way in online video adoption by a wide margin, many advertisers have been hesitant to use it as an advertising vehicle. National advertisers and agency heads have said that the user-generated content is too edgy or unprofessional to be considered a serious advertising medium, but that may be changing. Google CEO Eric Schmidt has admitted that YouTube has fallen short in ad revenues, but he has pledged to make monetizing the site one of Google's top priorities. YouTube has recently started airing long form independent films, which should raise its professionalism perception to prospective advertisers and agencies. Media analyst Mark Glazer predicts that “with the brains behind Google trying to solve the advertising problem at YouTube, there's a good chance they will find a breakthrough format or idea.”
We are beginning to see dramatic growth in viewership of premium content sites like Hulu, ESPN, Nickelodeon, CNN and ABC. Hulu now claims to have run 88 million videos. This is only a fraction compared to YouTube’s 4.2 billion, but many analysts suggest that Hulu will be the more successful business since Hulu can sell advertising in 100% of its inventory. According to one estimate, Hulu could generate $90 million in revenue in its first year, roughly the same U.S. revenue as YouTube.
Almost all industry analysts agree that professional-quality online-video content is particularly promising because it's what ad agencies, media agencies and media companies already know. Clients and agencies will feel more comfortable developing new content or re-purposing existing television content for the web.
It is particularly interesting to note that local retailers and other small and medium-sized businesses are beginning to use video to promote their services. Restaurants, legal practices and specialty retail shops are leading the charge, but local tourism attractions and financial services won’t be far behind. Their use is sparking the formation of yet another fast growth industry that specializes in online video production. Two startups to watch closely are http://www.pixelfish.com/ and http://www.turnhere.com/ . These sites offer high-impact, broadcast-quality video that is easy and affordable for even the smallest advertiser, and this is a natural area for local, independents and free-lancers to develop a new revenue stream.
Online video advertising is fast approaching a point to become a natural adjunct to any broadcast advertiser's media plan, as well as a lower entry cost medium for those who can’t afford traditional television. If you’re not using online video, it would definitely be in your best interest to evaluate its potential for your business.
Monday, January 19, 2009
Friday, January 16, 2009
Branding in a Recession Economy
The Puget Sound Chapter of American Marketing Association held an interesting panel discusion this week on "How to Recession-Proof Your Brand". Despite this somewhat presumptuous title, there were several points that I found valuable nuggets of insight.
1. Now is the time to be authentic and consistent with your brand promise. There are two key points here. The first is to avoid the temptation to dilute or cheapen your brand image with promotional incentives that might damage the brand when the economy rebounds. The example cited was Macy's which has run 40% to 70% off on every item in their store for the past two months. The Macy's brand has always been about value, not low prices. Special sales are a retail mainstay, but I believe that they are approaching a point where many customers will be hesitant to pay regular price ever again. The second point is to avoid any overpromise as a way to entice new customers. As I have said in previous posts, today's consumers are unforgiving if they feel they have been duped, and the internet gives everyone a forum to express their disappointment.
2. Now is the time to focus on your unique market niche and deepen customer relationships with your brand. This doesn't mean you shouldn't explore new revenue streams, it simply means you should focus on what you do best and avoid trying to be something you are not really good at being. This is a good time to read Chris Anderson's book The Long Tail, if you haven't already. His hypothesis that the future of business is to develop and own small niches could never be more important than now. We live in an over-choiced world. It's best to stick with what you do well than venture too far afield.
3. Now is the time to make sure all of your brand communications are consistent with your brand image, and the first place to look is your web site. Joe LaPla made an excellent point when he said that "the web site is the front door to your brand." In today's wired marketplace, the internet is the first place most people will go to make decisions about your brand's benefits and quality. A poor web site can destroy customer confidence and potential sales. I continue to see too many companies (especially small ones) with an inadequate web presence. Last week, I interviewed a new CPA on the recommendation of someone I trust. My first step was to look for his web site to make my own evaluation and discovered that he didn't have one. When I met him, I asked why he didn't have a web site and he said that he does most of his business on referral. When I told him that I almost cancelled the meeting because he didn't have a web site despite the referral recommendation, he was shocked. But he also asked me to refer a web development company to build him a site.
4. Now is the time to be your promise on the inside and the outside. People will ultimately make the difference between success or failure regardless of economic conditions, but now is the time to arm everyone on your staff (in every department) of the importance of delivering the brand promise everytime they interact with customers, or anyone for that matter. As a new business consultant, I advise my clients that everyone on staff is part of the new business team. They must be armed with a knowledge of the company positioning strategy and brand promise. And they must be committed to living up to that promise any time and every time they have the opportunity.
One final thought was expressed by all panelists -- a recession is an opportunity to strengthen your brand and emerge in a better position than your competitors if you do the right things. One example cited by Ted Leonhardt is the case of Hornall Anderson, an excellent local design firm that continued to aggressively market themselves during the 2001 economic slowdown and now enjoy a strong leadership position.
As one panelist said, 2009 can be a time of opportunity or calamity. The choice is yours!
1. Now is the time to be authentic and consistent with your brand promise. There are two key points here. The first is to avoid the temptation to dilute or cheapen your brand image with promotional incentives that might damage the brand when the economy rebounds. The example cited was Macy's which has run 40% to 70% off on every item in their store for the past two months. The Macy's brand has always been about value, not low prices. Special sales are a retail mainstay, but I believe that they are approaching a point where many customers will be hesitant to pay regular price ever again. The second point is to avoid any overpromise as a way to entice new customers. As I have said in previous posts, today's consumers are unforgiving if they feel they have been duped, and the internet gives everyone a forum to express their disappointment.
2. Now is the time to focus on your unique market niche and deepen customer relationships with your brand. This doesn't mean you shouldn't explore new revenue streams, it simply means you should focus on what you do best and avoid trying to be something you are not really good at being. This is a good time to read Chris Anderson's book The Long Tail, if you haven't already. His hypothesis that the future of business is to develop and own small niches could never be more important than now. We live in an over-choiced world. It's best to stick with what you do well than venture too far afield.
3. Now is the time to make sure all of your brand communications are consistent with your brand image, and the first place to look is your web site. Joe LaPla made an excellent point when he said that "the web site is the front door to your brand." In today's wired marketplace, the internet is the first place most people will go to make decisions about your brand's benefits and quality. A poor web site can destroy customer confidence and potential sales. I continue to see too many companies (especially small ones) with an inadequate web presence. Last week, I interviewed a new CPA on the recommendation of someone I trust. My first step was to look for his web site to make my own evaluation and discovered that he didn't have one. When I met him, I asked why he didn't have a web site and he said that he does most of his business on referral. When I told him that I almost cancelled the meeting because he didn't have a web site despite the referral recommendation, he was shocked. But he also asked me to refer a web development company to build him a site.
4. Now is the time to be your promise on the inside and the outside. People will ultimately make the difference between success or failure regardless of economic conditions, but now is the time to arm everyone on your staff (in every department) of the importance of delivering the brand promise everytime they interact with customers, or anyone for that matter. As a new business consultant, I advise my clients that everyone on staff is part of the new business team. They must be armed with a knowledge of the company positioning strategy and brand promise. And they must be committed to living up to that promise any time and every time they have the opportunity.
One final thought was expressed by all panelists -- a recession is an opportunity to strengthen your brand and emerge in a better position than your competitors if you do the right things. One example cited by Ted Leonhardt is the case of Hornall Anderson, an excellent local design firm that continued to aggressively market themselves during the 2001 economic slowdown and now enjoy a strong leadership position.
As one panelist said, 2009 can be a time of opportunity or calamity. The choice is yours!
Friday, January 2, 2009
New Business Prospecting: Understanding Your Client's Business
In a new study published by Reardon Smith Whittaker titled "A Client's Perspective On Agencies", there are many good insights and suggestions on how to tap into a new business prospect. In that study, 81% of respondents cited "understanding of your market" as a critical factor in their agency selection. The quality of the creative product is still important (69% said so), but I strongly believe that if you don't understand the client's business, then the greatest creative in the world won't win the account. Here is a link to that study: http://www.rswus.com/documents/Final2008AgencyClientSurvey_000.pdf
Several years ago, I spoke with Stan Richards, founder of The Richards Group, on what he considered the key ingredient in a new business pitch. Without hesitation, he replied that the ability to give the prospective client a new insight on their company or category was the key factor in winning new business. His business development team worked hard to find that insight, and then spent the majority of their presentation supporting that insight and its potential to grow the client's business.
In today's challenging marketplace, I would add the ability to help a client expand their marketing efforts into new digital frontiers is also a key factor in choosing one agency over another.
Clients are not saying to their agencies, "how can you help us make ads or a new web site," they're saying, "how much do you understand about our business in order to help us build a bridge between our brand and our customers."
Several years ago, I spoke with Stan Richards, founder of The Richards Group, on what he considered the key ingredient in a new business pitch. Without hesitation, he replied that the ability to give the prospective client a new insight on their company or category was the key factor in winning new business. His business development team worked hard to find that insight, and then spent the majority of their presentation supporting that insight and its potential to grow the client's business.
In today's challenging marketplace, I would add the ability to help a client expand their marketing efforts into new digital frontiers is also a key factor in choosing one agency over another.
Clients are not saying to their agencies, "how can you help us make ads or a new web site," they're saying, "how much do you understand about our business in order to help us build a bridge between our brand and our customers."
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