Time to get over the image of gamers as couch potatoes. The American Heart Association (AHA) and Nintendo are teaming up to present the Wii video game console as not just an entertainment system, but a pathway to physical activity. "We have a common goal of helping people live a healthier lifestyle," Neil M. Metzler, chairman of the American Heart Association's national board, tells Marketing Daily. The partnership, which launched on Monday, includes putting the AHA's logo on boxes for the Wii Fit balance board controller and on the Wii Sports Resort games beginning this summer. The logo placement is not intended to convey an out-and-out endorsement of the product, but rather that the AHA views the product as valuable for a healthy lifestyle. "It's not really an endorsement. We just realize anything we can do to get people moving is a good thing," Metzler says. "We're not specifically saying that the Wii is good for you, but [we are saying] that any activity is better than none." In addition, Nintendo and the AHA have partnered on www.activeplaynow. com, where consumers can learn more about the benefits of active play, conduct their own assessments about whether they are getting enough exercise and learn more about living an active lifestyle. Later this year, Nintendo and the AHA will convene a summit of health and fitness professionals, scientists and those involved with gaming to explore the benefits of active-play games and a physically active lifestyle. The partnership was born out of AHA research showing that 70% of Americans don't reach the levels of physical activity recommended by the association (150 minutes/week for adults, 60 minutes a day for children). And while the two main reasons people cite for not getting enough physical activity are lack of time and lack of enjoyment, they are still finding time to play video games, Metzler says. "This partnership with Nintendo is to show people [physical exercise] can be fun and part of family time," Metzler says. "If we can use the technology people are already comfortable with and enjoy, we can reach the population that we haven't been reaching."
Google and Intel will announce a Smart TV platform that supports an Android-based operating system at the Google I/O conference this week in San Francisco, according to reports. Intel's new Atom processor will run a new version of Google Android dubbed Dragonpoint. It will support devices made by Sony and other set-top box and technology makers like Samsung and Motorola, and possibly Cisco, says Trip Chowdhry, managing director at Global Equities Research. Chowdhry calls Smart TV a "social Internet computing platform." The targeted generation for this platform expects real-time interaction, community and personalization. And they will get it, he says. The Smart TV platform will initially offer between three and five services, ranging from the ability to play high-definition YouTube videos to sharing and creating channel content between others who also have access to the technology. Chowdhry believes the platform will plug directly into Google Checkout, AdWords and AdSense. "There will probably be two monetization models that support advertising," he says. "These would include advertising and a subscription-based model." Chowdhry described the advertising services as in-video and contextual ads, and pre- and post-roll. The subscription model would support streaming video rentals from YouTube. About 70% of the revenue generated will belong to the publisher, 30% to Google and 10% to the network provider supporting the service -- for example, Comcast or Time Warner. "Two people will have the ability to watch the same video stream together, though they may not reside in the same household," Chowdhry says, admitting that this description remains pure speculation. Google has not confirmed the platform or the features. Intel chief executive offer Paul Otellini, who sits on Google's board, told analysts last week that this will become the "the biggest single change in television" since transitioning to color. NewTeeVee points to a Sony patent application for a network media player with user-generated playback controls, filing date Dec. 4, 2009. Chowdhry says television lost many young people as an audience to video on the Web because they can't interact with their friends as they watch TV shows, but they can on their computer. Taking the concept of interaction from the Web and sticking it on the television could change that and bring back some of the lost advertising, he says. Google isn't the first to try this. Apple TV didn't work because it wasn't social. It isolated those who used it. The Smart TV platform will become successful because it extends the behavior of people on the Internet from the PC to the TV. The platform will make TV relevant to the demographics that deserted it, Chowdhry says, estimating that we will see it in time for the 2010 holidays.
This year, U.S. online video ad revenue is on pace to exceed $1.3 billion, according to new research from Parks Associates. The report attributes the healthy numbers to steady growth in online video viewership, combined with the ability to target specific viewers based on preferences and viewing history. Younger consumers are proving particularly receptive to targeted ads, creating openings for cross-platform ads and other opportunities for advertisers, according to the international research and consulting firm. The new research supports other findings by Parks, which indicates that large percentages of consumers -- especially younger consumers -- have yet to form a strong opinion regarding targeted advertising. These ads include commercials shown before an online video or overlays displayed during the show, with the content based on the user's Internet, TV, and mobile usage and viewing habits. Among U.S. broadband households, almost 50% of heads-of-household ages 18-34 are indifferent to targeted advertising, while 42% ages 25-54 and 25% ages 55 or older are similarly neutral. "Indifference indicates consumers can be won over by new advertising strategies, provided these messages are designed well, with truly relevant content," said Heather Way, research analyst, Parks Associates. "Also, the younger age groups are more receptive to the concept of targeted advertising, and advertisers place a premium on the ability to reach these demographics." While online video does not yet have the same audience reach as traditional broadcast and cable TV, the medium continues to grow its user base, and increased content offerings via TV Everywhere initiatives will bring in more viewers and boost advertising revenues. Presently, over 50% of heads-of-household 25-54 watch online video at least weekly, and the percentage jumps to 75% for ages 18-34. Excluding video ads, comScore recently reported that U.S. Internet users received a record 1.1 trillion display ads during the first quarter of the year -- marking a 15% increase year-over-year. Also excluding video ads, U.S. display ad spending in the first quarter reached an estimated $2.7 billion, with the average cost per thousand impressions equal to $2.48, comScore found.
There are 24 hours worth of videos uploaded each minute onto YouTube and 45 million home page impressions every day. The site gets more than 2 billion views daily and monetizes a billion videos per week that managed to triple partner ad revenue in 2009. YouTube turned five years old Monday, and it has experienced tremendous growth. Still, some analysts want to know when profits will start rolling in. That could be soon. Aside from the numerous ways to monetize videos, the site is considering offering a self-service movie rentals model for invited partners. Expect the use of ads in videos to skyrocket, according to Chase Norlin, chief executive officer at AlphaBird, an online video syndication company. "You not only have intent expressed from the search for content in the video, but then you have the intent when the person clicks on the sponsored videos," he says. Video advertising will post the highest growth rate in 2010, rising 48.1% to $1.5 billion, according to eMarketer. YouTube runs ads against more than one billion video views weekly worldwide. The site boasts more monetized views than any other video site has total views. And based on the different ways that people interact with YouTube, ad formats match those experiences. The site offers a variety of ad formats. Promoted Videos is the search advertising product that helps drive views of videos. Think AdWords for YouTube, but there the site offers display ads, too. Google continues to work closely with YouTube to monetize display ads that ensure advertisers can reach their audience across the Web. This means giving advertisers even more control over how and where ads appear, building self-service tools that let them scale campaigns that span across YouTube and the Google Content Network. The mission to monetize ads began in August 2006 with the launch of both Participatory Video Ads (PVA), and Brand Channels, YouTube's first advertising concepts. Then in September 2006, Cingular became the first major advertiser, rocking the site with an underground music contest. InVideo Ads, also known as overlays, followed in August 2007, along with the YouTube Partner Program in December that same year. Since then, YouTube launched analytics tool YouTube Insights, ecommerce platform Click-to-Buy, Promoted Videos, and Pre-Roll ads. YouTube didn't stop when it expanded home page ads options from one to seven formats. It soon added Individual Video Partnerships, began testing the Skippable pre-rolls test, launched Video Targeting, and began running YouTube mobile ads. Videos make a images worth a thousand words. "Apart from the fact, visually, that humans process images far quicker than words, YouTube gave Google a lesson in the importance of visual search early on from the way users interact and search for information within the interface," says Manny Rivas, online marketing manager at aimClear, a search agency. "We've observed several changes to YouTube as well as the big 'watch page' reconstruction," he says. "These alterations were all in response to the way users search, discover, and interact with the platform." Search within the site isn't the same as search in Google. With an added image thumbnail and view count, the title tag and description are, for some, only additional queues to the user, Rivas says. Media Experts relies on YouTube to support several clients' need for marketing with videos. Home page takeovers, mastheads, sponsorships, promoted videos, video overlays or Google content targeting are numerous ways the agency gains successful results on YouTube. Media Experts search marketing director Nectarios Economakis says the agency experiments with contests requiring user-generated content. "We were also part of the Canadian launch of YouTube with a national takeover," he says. YouTube has become the number two search engine in the world, and the statistic doesn't get lost with search marketers. Visual and video search have gained importance to optimize. Consumers adjusted to searching for videos and images directly in the search engine results pages (SERP), and have come to expect it. Economakis says Google understands that search is not limited to Web pages. Through YouTube, Google proved video is a key form of content. And with video comes image search, he says. Along with Media Experts, SMG Search supports clients that want to advertise on YouTube. SMG Search clients have sponsored the homepage, as well as bought sponsored search ads and overlays. People want a sight, sound and motion experience in search results, says Jennifer Simkins, vice president, director, SMG Search, Detroit. "They can answer questions with a demonstration or how-to video, and we see this in the level of sophistication in search queries on YouTube," she says.
Google said Tuesday it has made a $68 million offer to acquire Global IP Solutions Holding, an Internet voice and video company. The deal could put the Mountain View, Calif. company in direct competition with Skype, as well as supporting search rivals. GIP customers include Yahoo, IBM, AOL, Nortel Networks, and Baidu. The offer comes one day before the Google I/O conference. The company fits nicely between Google's existing voice services, Google Voice, and the acquisition of Gizmo 5. It could give Google the technology it needs to move forward and provide wider support for VoIP from landline phones and mobile devices. "The Web is evolving quickly as a development platform, and real-time video and audio communication over the Internet are becoming important new tools for users," Google Engineering Director Rian Liebenberg said in a prepared statement. "GIPS's technology provides high quality, real-time audio and video over an IP network, and we're looking forward to working with the GIPS team at Google to continue innovating for the Web platform." Trip Chowdhry, managing director at Global Equities Research, in a research note points to GIP's technology integrating well with unannounced phones from Samsung, Motorola and HTC that have two cameras. He also mentions that both Apple and Google, separately, continue to "stress test CLWR WiMAX Network for both capacity and latency." The cash buyout offer should expire around June 4. The Norwegian company shares trade on the Oslo Stock Exchange. Global IP's board recommends the offer. The companies say the offer price represents a 27.5% premium to Global IP's closing price on Friday.
The new ad campaign for Ford's subcompact Fiesta comes after a long ramp-up to the launch. Although the cars are not yet in dealerships, the company has been teasing the vehicle for a year, thanks to the availability of the European version that became the basis for the social-media experiment, Fiesta Movement. "It's a pretty big deal" is the understated theme-line for the campaign, via Team Detroit, Ford's agency consortium. The campaign comprises national broadcast, print, digital and out-of-home components, as well as Hispanic and African-American advertising. The 60-second launch spot airing on "American Idol" on Fox Tuesday night touts the car's 40-mpg highway performance, push-button start and Sync technology. In the ad, a lavish, over-the-top celebratory festival occurs around the car as soon as the young driver hits the start button. Skydivers fall from the air and legions of urban acrobats leap from buildings as banners appear touting various features and benefits of the vehicle. The effort also continues the Fiesta Movement campaigns featuring bloggers and Facebook mavens who got early versions of the car. A series of humorous videos featuring the "Fiesta Agents" are running on Ford's microsite for Fiesta. Marketing Daily talks to Thomais Zaremba, brand communications manager for Fiesta, about the big launch of the small car. Q: What's the genesis of that ironic "It's a pretty big deal" theme?A: We wanted to come up with a campaign that would be celebration for us in general, and then talk about the fact that there is so much technology in this car that you don't find in any other vehicle in this segment as well as the 40-mpg story. Q: Besides the national media buy, are you going to heavy up in urban markets for this, where the take rate is likely to be high for such a car? A: No, what we are doing is running media in our big national media properties, and where we are continuing to target our Millennials is with digital and social media. We have to talk to the entire [compact car] segment because there are a lot of downsizers, boomers and import owners who buy in this segment, not just younger buyers. So our national media is targeted toward the larger audience. Q: What other TV advertising will there be besides the launch spot?A: We will have three spots, one focused on Sync and another on the 40-mpg story. Q: The car is rolling into showrooms soon, so what does the demand look like after such a long pre-launch?A: In terms of what we started with over a year ago with Fiesta Movement, we have generated over 132,000 handraisers. We opened our reservation line when we revealed the car at the L.A. Auto Show, and we had over 11,000 reservations. We have now seen about a 14% conversion rate of these reservations to actual retail orders, which is much higher than the 1% to 2% conversion rate we see with traditional CRM campaigns. None of the consumers have ever driven this car, and for many of them it's sight unseen. Q: The Fiesta Movement is continuing in a sense with the video series featuring the agents testing the vehicle's technology in some unusual ways. How popular have these been?A: The five videos we have online have only been up for a couple of weeks, and we already have 123,000 views on YouTube without media promotion. We will get to 16 before we are done. Q: Is there a retail program as part of this?A: There is. It's what we refer to as the Fiesta Retail Movement; it's been a pretty intense process, where we have been training dealers about Fiesta. It's not just a typical product training that dealers get, but also how to interact with these consumers, how to be socially active, whether it's Facebook or Twitter. There are 573 dealers who have gotten additional training and will have Fiesta kiosks set up in their dealerships for consumers. It's not just about Fiesta, but for a range of small cars we are bringing to market -- starting with Fiesta, then the new Focus. It's how do we get people to come into our dealerships and understand that Ford has a range of small cars to offer?
Online video provider KIT Digital on Monday agreed to buy Singapore-based Benchmark Broadcast Systems for $9.5 million. Benchmark claims to provide video asset management services, and integrate broadcast video systems, for clients in over 12 countries through six regional offices throughout Asia. In addition, the privately held company expects to generate at least $10 million in revenue over the next 12 months. "This acquisition demonstrates our commitment to the Asian markets," said KIT digital chairman and CEO Kaleil Isaza Tuzman. "It also represents an extension to our existing IPTV systems integration capabilities -- which support our larger-scale software implementations with broadcasters and network operators." The deal follows KIT's agreement to buy Multicast Media Technologies for about $18 million in cash and shares back in March. Multicast was expected to complement KIT's North American client base, as well as its capabilities in serving video to the 'three screens' of the mobile device, browser and IP-enabled television. Last summer, KIT began trading on the NASDAQ Global Market exchange. The move, Tuzman said at the time, "puts us in a position to execute on selected, accretive acquisitions." Then known as Roo Group, KIT digital was taken over by Tuzman -- a former JumpTV executive -- in December 2007. The name change to KIT -- an acronym that stands for "Knowledge, Imagination and Technology" -- is intended to reflect changes under Tuzman aimed at refocusing on the company's core business of providing video services to companies across the entertainment, financial, automotive and other industries. KIT allows clients to publish, manage and distribute digital video content, as well as tap its syndicated video channels and syndicated videos for content. Tuzman previously said a key change for the company would be to focus on delivering live streams instead of video-on-demand for third-party sites. KIT presently provides software to more than 600 clients including Hewlett-Packard Co. and Vodafone Group Plc. The company moved its headquarters to Prague from Dubai last year. Benchmark's clients include Astro, CNBC, Express News, ESPN Star, ETV, MediaCorp, NDTV, Reliance Mediaworks, Sahara, TV9, VTV and ZeeTV.
The upfront presentations are in full swing this week -- all on the fifth-year anniversary of YouTube. Twenty-four hours of video are still uploaded every minute to the Web area, virtually all with no advertising sponsorship attached. After five years, traditional TV advertisers remain wary of videos of cats falling off almost everything, grown-up lions licking adult caregivers, children singing with robotic voices, and stoic wedding ceremonies breaking out into wild hip-hop song and dance. What do we have from the networks this year? The opposite end of the spectrum: a massive number of scripted television shows. No reality competition shows, game shows, or singing contests (though we will be assured of getting some of these as the season goes on). TV networks realized that while the democratization of video on the Internet is great for viewers, that's only one piece of the puzzle. Those who said YouTube-type content would take over the world were right -- er, wrong. The $70 billion TV advertising market is still far ahead of the Internet's $30 billion, and way beyond just the digital video advertising segment, sitting around $1 billion, with leaders YouTube and Hulu pulling in around $200 million a piece. This year, the expectation is that 20% more money will come back into the TV upfront market, which will perhaps get up to $8 billion or so. The shiny new fascination of Internet video has gotten a bit dulled. Some might say the next wave might look more familiar. "Heroes," "Law & Order," and other shows have been cancelled. What would it be worth to some viewers -- or advertisers -- to continue those shows, not on cable, but online? Maybe it would come with the price of a iTunes music download. It's still a digital pennies versus traditional TV dollars market, after all. So, unless a big sponsor steps forward, that kind of stuff won't be happening anytime soon. So here's to the next light-hearted crime procedural-medical-family-drama which might pull in 10 million viewers a week. YouTube? Right now, it only does two billion worldwide views a day.
A couple of years ago, I was chatting with an executive at Fox and told him, "MySpace killed the online ad business," adding that the social networking giant's ballooning inventory of display ads depressed ad rates. He didn't seem to disagree, which made sense since we were talking about how the only solution to falling ad rates in display advertising was video content, inventory and ads. He added that all sites tend to sell out the premium real estate on their properties -- and without video inventory, they really cannot find ways of generating more revenue from ad sales. We now know what happened to MySpace: Facebook ate its launch. But what has remained constant is the challenge of growing ad rates in an environment where there is more inventory than ever before. In fact, fast-forward a couple of years. ComScore announced that Q1 saw over 1 trillion display ad impressions generated, with Facebook accounting for 16%. Yahoo was second, with 12%. To indicate how much the optimization of inventory is a problem for the largest properties, consider that Yahoo paid nearly $800 million for Right Media, operator of an online auction system for display ads. Following Facebook and Yahoo is Microsoft -- which has lost money from its online operations forever -- and Fox properties, which includes MySpace and IGN. Speaking of IGN, when it bought my last company in 2005, executives mentioned that one of the largest drivers of ad inventory on their property were the message boards, and that inventory wasn't worth "a bucket of warm spit" -- as an explanation of why, despite its having hundreds of millions of pageviews, they were going to buy the company where I ran ad sales. That was then, this is now, and everywhere you look, the forecasts for online advertising are turning increasingly bullish, as reported in the trade press: "Double-digit growth is set to return to the online ad market this year, according to IDC. The market research firm says it expects online ad spending to jump 12.6 percent to $29.7 billion in the U.S. By contrast, spending dropped 2.4 percent in 2009. According The Interactive Advertising Bureau and Pricewaterhouse Coopers, "Internet ad spending jumped 7.5 percent during the first quarter to $5.9 billion-marking the 'highest first-quarter revenue level ever for the industry.'" "Revenue from online video advertising networks -- typically the lowest-priced digital content for marketers -- is due to grow 41% in 2010 over last year to $377 million." Indeed, while the macro-level picture for online advertising remains very rosy, on the front lines, online media professionals understand that there will remain a pricing pressure on ad inventory, which is ultimately what drives revenue for their properties. Without a doubt, over the next year, the difference between the $70 billion television ad market and the $30 billion Internet advertising market will shrink. However, ad rates will face enormous pressure as long as consumers continue to turn to the web to consume media and social media (including user-generated content), catapulting ad inventories to increasingly higher levels. It's basic economic theory that when supply of one thing increases, prices will have difficulties rising if demand stays somewhat constant or grows moderately. This, in turn will affect price-to-earnings and price-to-revenue multiples for publicly traded companies and valuations for private ones. To understand the video opportunity, consider the following two sets of data: - comScore: "U.S. Online Video Market Continues Ascent as Americans Watch 33 Billion Videos per Month." - Nielsen: "More than 9 Billion Video Streams Viewed in the U.S. per Month." Initially, I wondered about that 24-billion discrepancy, but I reached out to Andrew Lipsman, senior director of industry analysis at comScore, who explained to me that: "One source of difference is that comScore data includes video ads," whereas -- one can presume -- Nielsen only looks at content views.If that is the case, then roughly 24 billion video ads were seen each month, over a quarter -- that is 72 billion video ad impressions. Now consider that with the 1 trillion display ad impressions over Q1. In other words, whereas just over 20 billion video ads are seen each month, there are 333 billion display ads per month (dividing the 1 trillion in Q1 by 3). Of course, with video ads being worth ten times more than display, this is comparing apples to oranges, but ultimately this creates an interesting opportunity for sites to start replacing at the real estate they now use to sell static or flash display ads with in-banner video ads -- which not only garner a higher CPM, but are far more effective. To be very clear: in no way am I recommending that Web properties insert video ads in display spots and pass them off (or price them similarly) to the video pre-roll ad you see before an actual piece of video content. What I am outlining is that many advertisers will welcome paying more (relative to display banner ads) for video ads in spots historically reserved for display ads -- and would welcome seeing more inventory for video ads that don't garner the nosebleed rates that pre-roll inventory fetches (due to its limited inventory and availability). Of course, we should be careful what we ask for. If all of the inventory that now runs display ads gets used to run video ads, then we will also see a rise in supply. Still, sometimes the devil you don't know is better than the one you do.