As marketing clichés go, few are as firmly embedded as Gen Y’s technological savvy, or their parents’ doltish inability to master the text message. But new research from McKinsey & Co. reveals that this divide is growing faster than many marketers realize, and that important insights about behavior, such as Gen Y’s greater willingness than those over 35 to pay for online content, are getting lost in conversations about technology. Ewan Duncan, a principal in the Seattle office of McKinsey & Co. and co-leader of its Consumer research, tells Marketing Daily why the separation of generations is accelerating, and what marketers need to know. Q. So you’ve now looked at 100,000 consumers, across 15 countries. What’s surprising to you?A. The general patterns of our research support what people are seeing and saying about, for example, the rise of social media, the rise of mobile, and that people are using voice less. But certain groups are using it a lot less -- and that phrase, 'the future is already here, it’s just unevenly distributed,’ applies. If you look closely at the youth segment, they are already quite different than the rest of us. Q. How so? A. Well, they have laptops. But their primary computing device is their smartphone. When they communicate, they are likely to do it through text or video, not voice. They think email is slow and dumb. They don’t sit and watch TV -- they snack on video as they are doing other things. Q. What does that mean for marketers?A. Well, many of them don’t have landlines or watch normal TV, and that is quickly becoming the norm. Marketers need to be on the right side of that behavioral change. Q. Could you explain what you mean by device convergence? A. Your phone is becoming your digital Swiss Army knife. It is a still camera, a video camera, a screen for playback, a GPS. And companies will bake more and more technology into these phones. Some of these larger phones with bigger screens are better for video, but not so easy to hold up to your ear. Q. Isn’t that odd? That phones are becoming less like phones?A. I don’t think so. People use voice less and less, and I think it will continue to decline. Video calling is the big hidden trend, and younger users rely on their mobile devices when they can’t talk, like when they’re in class or at work. They are communicating more, but talking less. Americans talk much more than people in other countries. Q. What else are marketers missing? A. This group’s willingness to pay for online content. Our research found that those under 35 are 1.6 times more likely to pay for online content than those over 35. That could mean purchasing an app or a subscription, but I think we’ll see more companies moving toward a business model that addresses this.
In a bid to take so-called eSports mainstream, CBS Interactive (CBSi) Tuesday revealed exclusive partnerships with TwitchTV and Major League Gaming (MLG) to handle ad sales for both companies. TwitchTV is an online platform broadcasting live coverage of “eSports,” including competitive video game competitions. MLG is the world’s largest competitive video game league. As part of the agreements, TwitchTV’s coverage of live gaming competitions and events will be featured on GameSpot.com, CBSi’s flagship gaming site. CBSi will also be the exclusive online broadcaster of MLG’s “Pro Circuit” competitions. The deals make CBSi the exclusive seller of all advertising, promotions and sponsorships for both TwitchTV and MLG. "The eSports scene is one of the hottest trends in video, and is rapidly attracting the core 18-34 male demographic in greater numbers than any other medium or category," stated CBS Interactive President Jim Lanzone. Rex Harris, media supervisor at Publicis’ SMGx unit, pointed out that the CBSi partnerships echo the explosive growth of Machinima, the YouTube premium channel devoted to gamer-inspired content -- which “is consistently one of YouTube’s highest viewed and, consequently, monetized premium channels.” He said it’s a “smart move (for CBSi) to stick a flag in the ground of the ever-growing mountain of niche video content found on the Web.” From a brand perspective, Harris said the only potential downside to these deals is the unpredictability of live streaming, which might cause some brands to shy away. TwitchTV estimates it attracts more than 16 million uniques per month, who tune into its events and competitions for an average of 23 minutes. MLG claims to have served over 15 million hours of live video to its fans during the 2011 Pro Circuit season. As the video gaming league’s exclusive broadcast rights holder, CBSi is hoping that as eSports grow in popularity, so too will MLG.
Raising the bar for all online publishers, Hulu has committed to only bill brands and agencies for ads that viewers watch in their entirety. “This is an industry first,” according to Jean-Paul Colaco, Hulu's senior vice president, advertising -- explaining that the move is part of Hulu’s “all in” attitude. “Hulu advertisers will not be charged unless their advertisement has been streamed through completion.” The 100% completion rate commitment includes all ads sold by Hulu itself, and will apply to both Hulu and Hulu Plus, Colaco said Tuesday. In beta for several months, Zenith Media, General Mills, and Horizon Media all helped Hulu test its new model. The model has the ability to “minimize waste and maximize effectiveness of video advertising," Rick Hosfield, vice president of content planning and distribution at General Mills, stated. More than a mere marketing gimmick, Colaco sees the move as an extension of Hulu’s intrinsic brand-friendly nature. Bold as the offer may seem, however, it's important to note the difference between Hulu's play and YouTube's -- which is employing a pay-per-complete model, according to Michael Greene, an analyst at Forrester Research. “What Hulu is doing is reinforcing its status as a premium video publisher by calling attention to its strong user engagement and ad completion rates -- metrics that differentiate it from other publishers, especially those in the mid- to long tail,” Green explains. “YouTube, on the other hand, is trying to use consumer ad skipping to its competitive advantage. In a world where users can expect to skip video ads and advertisers pay for completes, only a publisher with the scale of YouTube can effectively compete on those terms," he adds. As Forrester senior analyst Joanna O'Connell notes: “YouTube is also focused heavily on using data to better match advertisers' ads to consumers, based on the likelihood that the consumer will complete the ad. Using data to enhance targeting is smart.” Conversely, in 2007, Hulu launched its ad selector, which encouraged viewers to choose among multiple ads to select the one most relevant to them. More recently, Hulu introduced its ad swap product, which lets viewers replace existing ads for those they feel are more relevant. Since the launch of ad swap, Hulu has seen over 9 million substitutions, according to Colaco. The original Hulu service continues to ramp up users and content, while Hulu Plus -- the company’s U.S. subscription service -- passed more than 2 million paid subscribers in the first quarter of the year. “Based on our research, Hulu Plus has achieved 2 million paying subscribers faster than any video subscription service -- online or offline -- in U.S. history,” per Colaco. There will be no extra cost to Hulu advertisers for this new guarantee.
Nielsen has inked a deal to buttress its Online Campaign Ratings (OCR), days after AOL said it would use the data as a first-of-its-kind carrot to attract more video advertising. Under the arrangement, Nielsen will meld data from AdSafe Media on whether a particular ad ran in a “safe” environment into the OCR system. Nielsen executive Chris Louie said the integration offers OCR upgrades in terms of both “verification” and “viewability.” Advertisers can gain insight into whether an ad ran in a “brand-safe environment,” with OCR tracking the percent of ads running on sites deemed within an advertiser's safety guidelines. The data can further yield information on the devices ads are viewed on and specifics about the content genre, such as news, entertainment, etc. The AdSafe OCR integration looks to ensure that an ad has appeared consistent with Interactive Advertising Bureau guidelines, calling for 50% of an ad to be in view for at least one second. That requirement does not, however, apply for video ads. Louie, who heads go-to-market strategy for Nielsen Campaign Ratings, said the AdSafe deal is the culmination of a “rigorous process of evaluating” a run of potential partners. OCR adoption gained a boost this week when AOL said it would offer guarantees to advertisers for video ads, using TV-style data on the age and gender of an audience. OCR tracks national ads, but also garners ratings for specific markets. The AdSafe arrangement should also play a role as Nielsen and GroupM work to launch Nielsen Cross-Platform Campaign Ratings, which will use OCR and TV measurement services to devise a system with easier-to-compare metrics on reach and frequency across the Internet and TV.
Hi folks, Welcome to the VideoDaily Roundup, a new daily news column covering everything and anything in the world of online video that you need to know, brought to you by yours truly, all the way from Johannesburg, South Africa — which is famous for, among other things, crime, slow Internet speeds, and pay-as-you-go mobile and online data plans. Indeed, not only do I have worse buffering problems than you do, but I must pay extra for it, too — practically by the megabyte. In any event, I have recently assumed the role of Editor of this very OnlineVideoDaily that you have received in your inbox today, so if you have questions, comments, concerns, story ideas or ideas about how to make OVD better, please email me at ross@mediapost.com. Without any further ado, here’s what’s doing in the world of online video for Tuesday, April 17, 2012: New News From the NewFronts Just in case you’ve been living under a rock (or in the third world), Google, AOL, Microsoft, Yahoo, and Hulu are all planning TV-style upfronts, branded the “NewFronts,” later this month and into next in a move that emulates the way the major TV networks sell ad space in their shows for the upcoming season. Yesterday, AOL became the first major media company to say it will offer “guaranteed audience delivery” for video campaigns bought across its properties, using reach, frequency and demographics data provided by Nielsen -- also known as the elusive online gross rating point. Groundbreaking, perhaps -- but cNet notes that AOL’s “powwow” is but a “mere warmup” for Google’s video giant YouTube, with its 800 million monthly users who upload an hour of video per second. Last week, Google Chief Business Officer Nikesh Arora emphasized the Web giant’s big plans for YouTube, which include hosting its first upfront next month for brands and agencies. YouTube Self Service Ad Platform to Launch Next Month Next month, Google plans to unveil a self-service ad-buying platform on its YouTube video-sharing site in hopes of attracting more ad dollars from small businesses. The platform, called AdWords for Video, will enable advertisers to create and manage video campaigns in a manner similar to Google’s search ads. AdWords for Video will also influence how Google prioritizes its search results. For example, if you build a promotional video using the platform and your competitor does not, Google will prioritize your business higher than that competitor in its search results. TheStreet.com notes that the previous process for creating video ads with YouTube was more complex, involving sales reps, and was typically only used by large national advertisers. The full story includes a Q&A with YouTube Group Product Manager Baljeet Singh. Ooyala Unveils Video Recommendation Engine Ooyala on Friday unveiled a new recommendation engine for online video content, which it says increases engagement with video content by as much as 4 times. “Engagement” in this case means longer viewing sessions and more total videos consumed, which should lead to more revenue for content producers and distributors. The recommendation engine is powered by the data Ooyala collects from its network of video content providers, which includes ESPN, Telegraph Media Group, Rolling Stone and others, and whose audience totals 200 million-plus. The new product will also be available across devices. Hastings Criticizes Comcast - Again Netflix CEO Reed Hastings continued his heavy-handed criticism of Internet Service Provider and Cable TV distributor Comcast. On his Facebook page, Hastings pointed out that when Comcast’s Internet subscribers watch videos through the Netflix, Hulu or HBO Go apps on their Xbox consoles, it counts against their monthly data limits, while watching videos through Comcast’s Xfinity app on the Xbox does not. He said the ISP should “apply caps equally, or not at all.” Earlier this year, Hastings criticized the notion that it costs ISPs like Comcast a lot to deliver Internet video. Vevo Launches in Australia, Denies Facebook Deal The music streaming service Vevo launched in Australia today on the Web and across many mobile devices, which includes apps on the iPhone, iPad, Windows Phone 7 and Android. In reporting the launch, ZDNet Australia also reminded readers that Vevo was reportedly in secret talks over moving its video content from Google's YouTube to Facebook, where it would enter into a similar ad revenue-sharing arrangement with the social networking giant. The move would enable Vevo to shift users from the countries it has launched in (U.S., Canada, Australia, U.K.) over to Facebook, in addition to removing the “stranglehold” that YouTube has over a significant amount of its new music video content. Vevo denied that any deal was imminent. Later this year, the music streaming service plans to launch in six more countries in Europe and Latin America. India Ranks Fourth in Online Video Consumption With the world’s second-largest population, it’s only a matter of time before India surpasses the United States in online video consumption. According to IndianTelevision.com, India is already the fourth-largest online video market, thanks to 50 percent growth over the last few years.
Hi folks, Welcome to Wednesday’s VideoDaily Roundup. Today we'll look at: -Hulu's future ahead of its first-ever upfront -The FCC's watch over anti-Net neutrality practices at Comcast -Brightcove's launch of a new video paywall solution -A survey indicating that more than a third of U.S. households report that they have Connected TVs -Nissan's new video series for the DeltaWing racing car Hulu’s Future Still UncertainThe New York Times paints an uncertain future for Hulu, the streaming video service that is a joint venture from many of television’s most powerful companies, as it prepares for its first-ever upfront. As SVP of content Andy Forssell admits: “The bulk of our business is working with those big media companies, and they’re going to make choices based on how they see the whole ecosystem evolving.” Hulu is essentially at the mercy of its owners, who are still trying to figure out how best to reach consumers wherever they are -- and getting them to agree is proving to be rather difficult. For example, the Times cites a disagreement among the Hulu board “about the amount of investment necessary” to acquire more content for its popular subscription service, Hulu Plus. Its owners may say they are committed to Hulu for now, but they did try to sell the company just last summer. According to the report, one of the stakeholders -- Providence Equity -- is thinking about unfolding its stake, which would force the owners to buy them out. Hastings’ Comcast Post Draws in FCC In a Facebook post on Monday, Netflix CEO Reed Hastings accused Internet and cable TV provider Comcast of giving favorable treatment to users of its Xfinity triple-play service when they connect to the Web via the Xfinity app on their Xbox 360 or PS3 console. He claimed that watching video on Netflix or Hulu through his Xbox 360 would count against the monthly data cap imposed by Comcast, while use of the Xfinity app does not. Well, The Wall Street Journal notes that the FCC is now monitoring the situation. But the Journal also points out that the issue may not be as simple as Hastings makes it seem. From Comcast’s perspective, Xfinity video gets to consumers' homes through a private, managed network, while Netflix and Hulu content travels over the public Internet. Currently, the FCC allows for IPSs to treat traffic moving over their private networks differently than traffic on public networks, but it has also pointed out the risks to the open Internet in allowing this distinction. It may yet revisit its stance. Brightcove Bows Video Paywall Solution At the National Association of Broadcasters meeting yesterday, Brightcove took the lid off its new “Video Paywall Solution Framework,” which the company claims will simplify the integration and processing of payment and authentication technologies for online video. As the video platform provider notes in its press release, publishers that want to offer paid access to their video content have struggled to bring together the required technologies to make that happen -- particularly across devices. The Video Paywall solution adds the following services to the Brightcove Video Cloud platform: subscription management (including registration and authentication, which controls user access to content); payment processing; cross-platform digital rights management (or DRM, which refers to adhering to rights and licensing agreements across devices and platforms); and content protection technologies like Adobe Flash Access, Google Widevine, PayWizard, and TinyPass. Survey: More Than a Third of Households Have at Least One TV Connected to the Web No -- your eyes are not deceiving you: fully 38 percent of homes in the U.S. have at least one television that is connected to the Internet. But that doesn’t mean these homes have Smart or Connected TVs. Rather, the vast majority of these televisions are connected to the Web through an Xbox 360 or PS3 console. In fact, only 4 percent of the homes queried by the Leichtman Research Group survey reported having a Connected or Smart TV, and only 1 percent connect their television through an Apple TV or Roku box. Even so, the survey found that 16 percent of adults watch full-length TV shows online at least once a week, and 13 percent of adults watch online video through a connected device at least once a week. As you might imagine, Netflix subscribers represent much of this usage; 35 percent of Netflix subscribers watch video from the Web via a connected device at least once a week. Nissan Debuts Promotional Video Series for Racing Car Here’s yet another example of a marketer producing original video content as part of a brand campaign: Nissan Motor Co. is using a video series to promote the new DeltaWing racing car that it is both sponsoring and helping to design. The DeltaWing will make its debut at the 2012 Le Mans 24 Hours in June. According to The Wall Street Journal, the series will showcase the making of the racing car and will include an exclusive behind-the-scenes look at all the testing and tinkering leading up to the DeltaWing’s debut. New episodes will launch every two weeks between now and the Le Mans race. The videos will follow a similar documentary approach that Nissan used to introduce its SUV, the Juke-R, last year.
Maybe it’s the 15 years I spent running a marketing agency. Maybe it’s my love of brand building and advertising. Or maybe it’s my annoyingly persistent sense of fairness. Whatever the reason, I find myself increasingly disheartened by the prevalent and seemingly universal acceptance by video networks that it’s okay to demonize the brands that pay our bills in the name of keeping viewers happy. Clearly, it’s important for any video network to maintain its integrity, and create a positive, happy user experience. People come to a network wanting to browse around a bit, find what they’re looking for, and watch their selected video. Fine. And they want to do it for free. Also fine. It’s the networks’ responsibility to provide that if they want to keep users entertained, informed and coming back frequently. But in an apparent fear of consumer backlash, it seems more networks are adding options that allow users to bypass pre-roll ads altogether in order to get to their desired video a bit faster. In the grand scheme of things, people will have worse things happen to them than having to wait an additional 20 seconds for their video to begin to play. The need to create a positive experience for viewers has to be balanced with the responsibility to create value for the brands that support the network and spend money to reach those viewers. Brands can’t be positioned as the enemy, and their ads can’t be presented as roadblocks if value is to be maximized or even realized at all. Much of the issue here is simple wording, but as we all know, words matter. For example, when a viewer is watching an ad, and there is a countdown clock that says “You Can Skip This Ad In: XX Seconds” what does that really say? At the best, it says that the video you're waiting for isn't really worth the wait. At worst, and far more likely, it sends a clear message that the network acknowledges the ad that's playing isn't worth watching: Sorry you have to sit through a few seconds of this über annoying ad. It's a necessary evil and we hate to inconvenience you by making you suffer through it. But don't worry, we'll let you ignore the rest of it in just a few seconds - that'll show 'em! Oh, and by the way, Mr. Advertiser, here's your invoice for the thirty million impressions you ran through us last month. Sorry for the low completion rate, but if you could pay us within 45 days, we'd appreciate it. The agencies and brands that partner with video networks rely on those networks to present them in the best possible light. Networks need to rise to the challenge and find ways to promote those brands as worth a few extra seconds, and stare down the growing sense of audience impatience. If ad-skipping capabilities are an absolute necessity, networks should seek to create a better mechanism that doesn’t cast marketers as the villain. Replacing the standard skip button with a picture of the advertiser's logo would at least create a bit of interaction between viewer and brand. Even a simple phrase change from “skip this ad” to something like “This commercial's great, but I can't wait to watch my video!” might seem a little cheesy, but it doesn’t downplay the importance of the marketer. BlurbIQ has an interesting solution, in which viewers who want to skip an ad are asked to type a specific word (like the brand’s name). In fact, that little bit of interaction -- typing the brand name -- might be more powerful than watching a full ad, and lets everyone benefit. On the flip side, marketers need to meet audiences halfway, and create ads that are more accepted. As a recent survey by Poll Position showed, the majority of viewers believe that 15-second spots are the appropriate length to showcase before a video. Creating more of these spots will keep viewers watching, and take the pressure off networks to find ways of allowing viewers to bypass the ads altogether. Whatever the solution, networks need to respect the brands that generate the revenue as much as they respect (fear, cater to, bend over backward for) the audiences. Brands allocate their marketing dollars to those media vehicles that can produce the best results. But the recent increase in ad dollars spent on online video networks will be short-lived if those networks demonize the brands and ultimately fail to provide value.
Oh, so you want to hear my First Car Story, do you? It dates back to the late 1980s, when I was but a lad with shaky confidence and a few wisps of hair-like filament sprouting in the uncharted terrain between my nose and upper lip. Partly through the frowned-upon sharing of Algebra II notes, I managed to secure for myself a single date with a young miss who I'll call "Phoebe Cates." Phoebe and I had a fine time during dinner, owing mostly to my probing, conversation-fueling questions ("so, what's going on?," "everything good?," "can you please pass the ketchup?"). We had an even finer time during the movie that followed, thanks to the raw, magical chemistry between Carl Weathers and Vanity. But upon heading home, Phoebe and I were met with a mood-annihilating surprise. While parking the car, I'd heard a slight rustling noise in the trees above but thought nothing of it. It turns out that what I had interpreted as a breeze or a squirrel was actually a street gang of pigeons in the throes of severe digestive distress. In the three hours that followed, they disgorged the contents of their colons (do birds have colons? whatever) onto my Toyota Camry wagon. That's my "first car story": I went on a date and returned to find a car shrouded in shit. See attached photo, taken after two rounds of clean up. I didn't even receive a pity kiss when I dropped her home. Hey, you asked. And I'm happy to have shared my little story, along with the accompanying evidence. But here's the thing: Just because you've provided me with a forum to reminisce about the sad intersection of teenage kicks and bird poop doesn't make me more inclined to buy your product or support your brand. In fact, the only impulses First Car Story provoked in me were to spend 14 hours "researching" old classmates on Facebook and to wonder whatever happened to Simple Minds. And that's why "First Car Story," created by Subaru to promote its redesigned Impreza, doesn't accomplish its goal. While the concept is clever (if notentirelyoriginal) and the execution improbably and awesomely detailed, the program taps far more into our general love of cars than into our curiosity about one specific car. The nostalgia it provokes overwhelms the pitch it delivers. Don't get me wrong: I loved playing with the "First Car Story" toys. To create an animated video depicting a first car story, the site asks for a bunch of information (model/color/condition) and a name (I went with "The Be-Pooped Love Camry"). It then prompts users to write a sentence or three, promising "when you write a word we can animate, like say banjo, we'll highlight it." After choosing music (I selected the peppy-'80s "Girl Party" over the more-accurate-at-the-time "Broke & Lonely") and recording narration for the clip in my sing-song alto, my transformation into a first-car raconteur, the kind you'd hear on NPR and describe to your droll NPR friends as "droll," was complete. The finished product exceeded expectations. Though it cut off half my narration - the text I entered apparently only gave the site so much to work with, as opposed to the 285 seconds of voiced-over Larrybabble - the video did a fine job depicting the nine car accidents Phoebe and I almost caused while driving home with a poop-caked windshield. Whoever dreamed up the wackadoo-accident-reconstruction" component of the animated technology deserves a serious raise. Subaru slips a few plugs for the Impreza into the video tool - as my narration uploaded, I half- saw something or other about a new symmetrical wheel design - but the carmaker doesn't do enough to brand the program as its own. Here's what I'd like to know: If Subaru goes back and polls "First Car Story" sharers five days from now, how many will remember that the Impreza had anything to do with the site? Hell, how many will remember Subaru had anything to do with it? Ultimately, then, "First Car Story" amounts to little more than a really cool techno-trifle.