Looking Back At 2011: The Unexpected
In part 1 of our end-of-year series, we asked a number of online video professionals: What was the biggest news/development/trend of 2011 in online video?
The panel of experts include:
- Brian Fitzgerald, CEO of Evolve (content producer, publisher, ad representation)
- Matt Heiman, CEO of Diagonal View (content producer)
- Jim Louderback, CEO of Revision3 (content producer)
- Adam Singolda, CEO of Taboola (distribution and aggregation)
- Brett Wilson, CEO of Tubemogul (media buying platform for video advertising)
- Steve Wolf, VP content blip (aggregation and network)
In part 2 today, we look at their answers for question 2, which was: What was the one thing you expected to happen but didn't?
Jim Louderback: “Consolidation and buyouts.”
Steve Woolf: “I expected more consolidation among web video companies, but it hasn't happened yet. I look at the online video landscape as a place where core competencies in three areas deliver the most enterprise value: technology, ad sales, and content. There are quite a few companies extremely good at one or two of those, but very, very few are good at all three, and as a result they are cutting short their ability to realize the most value.”
Personally, I was also expecting some consolidation, but it simply didn’t materialize. You need fresh money to come in -- and most of the money that has been invested in aggregators (for example) has been parked for over five years; there’s a lot of investor fatigue. I spoke to multiple people in the mix to try to understand why, and the reasons we have not seen much consolidation boil down to 1) over-funding and 2) unreasonable investor expectations.
Matt Heiman: “The pre-roll format to be challenged- branded content and channels are surprisingly still in the minority.”
I agree with Matt. Pre-roll remains the low-hanging fruit that is driving the online video advertising marketing. Some of this has to do with the challenges facing branded content. Unless branded content picks up – and gets better at actually offering entertainment and value to viewers – expect even less producers to tough it out in 2012.
Brian Fitzgerald: “That more agencies did not use technologies like adsafe (or others) or establish a process to manually monitor and crack down on fraudulent distribution of video. Too many vendors are ad serving auto-play videos in dhtml layers and spilling pre-roll beyond approved site lists onto sites that are not brand safe.”
Indeed, I have touched on in-banner being passed off as instream before (part 1 and part 2), but seemingly to no avail. This practice is arguably the single biggest reason why ad rates have fallen so dramatically: Buyers think they are getting real pre-rolls when they’re getting video ads in display banners.
Brett Wilson: “We thought there would be more use of CPV, CPE or cost-per-completion type buys in the video space. The majority are still CPM-based buys.”
Personally, I see a lot of entertainment buyers looking for CPV buys -- but thankfully, despite falling ad rates, we are seeing some resistance in CPV or CPE pricing.
Adam Singolda: “I'm rather shocked to see Google/YouTube totally missing out on the billion-dollar opportunity of distribution and syndication video, while everybody else is running to grab pageviews like mad people. YouTube is spending ton of energy to increase their premium inventory on their destination site through 'Partner Channel Program' - but while they give so much focus there, they miss out on that other thing called the Web.
As a reminder, the one thing that really made YouTube who they were in their early days was the fact that they allowed embedded videos. They were the first to say, we will win through people watching videos anywhere they go.
That vision of theirs faded away as publishers today are looking for automated solutions to get premium content to match their site in a contextual/behavrioal way. That real-estate on articles, section front, homepages where publishers are willing to show videos from other sites in a relevant way is very limited. All YouTube is left to offer in 2011 is embedded videos -- same product they offered in 2005.”
Adam has a point, but with a trillion (with a T) views coming in 2011, I don’t see why YouTube needs more views; it needs higher quality of views. By trying to address the quality of content on the site, YouTube is trying to address that uncertainty. Pursuing the syndication card would only create a new uncertainty: site quality.
Next up in Part 3, we look at everyone’s predictions for 2012.