Commentary

Direct Response Online Video, Revisited

Last year, we pondered the question of why DRTV advertisers hadn't yet embraced online video as an outlet for sales generation.  At the time, an easy answer could have been "who cares?"  The media landscape as a whole was in the middle of a relatively strong year, with online continuing its excellent growth.

Fast-forward a few months, and things certainly look a lot different.  Budgets have been cut or put on hold until the economic future becomes a bit clearer, and the fate of entire industries that were big advertising spenders (auto and financial) is still uncertain.  A few direct marketers seized the opportunity in TV advertising and became household names overnight.  The Snuggie began advertising in October and has sold over 4 million units to date, and Cash4Gold bought a Super Bowl ad!  Media professionals understand what is going on --brand advertisers have pulled back and these buyers are buying at locked-in remnant rates that ultimately spell profit for them.

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While many of these advertisers have a presence online in the search, affiliate and display space, they still have yet to unlock the code to profit from online video.  And frankly, it's not just the DRTV segment that is struggling to make video work online.  Overall, we're not seeing success with CPGs, insurance companies and others that use online as a direct-response tool, be it for sales, couponing, lead generation or anything else.  It's counterintuitive because online remains the accountable medium (including video, which is rapidly becoming as measurable as any other format), and there is more ad inventory available than ever right now, so why the lack of investment and experimentation in video?

For the DRTV product-pushers, the reasoning on the surface appears clear.  The formula behind DRTV ads requires an optimal repetition of the product benefits, features and pricing that is made possible only within a longer timeframe than is acceptable online.  But for the rest of the direct response/brand response segment, it's hard not to justify looking at video as a way to complement search and display direct response efforts.  

Nothing engages like sight, sound and motion. Not only that, online video reporting can offer insight into completion, time spent and interaction rates, and  when combined with ad server, site analytics and attribution reporting, can give a clearer picture of performance and ability to optimize than ever before.  Then there are all of the standard targeting techniques such as day-parting, category and geography, which become all the more mainstream as video avails scale.

With the undeniable growth of online video and continued focus on innovation, perhaps we will unlock that code to driving ROI with video in 2009.  Perhaps eMarketer's prediction of 45% growth for video will then prove to be too conservative.  Wouldn't that be something?

3 comments about "Direct Response Online Video, Revisited".
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  1. Jeff Skaggs from CraveOnline, February 23, 2009 at 12:43 p.m.

    The answer is simple...pricing. Current video cpm's don't allow for the aggressive back-end optimization that is required to run a successful performance-based campaign. Until publishers let go of the "premium cpm" model for all of their video inventory, it will be difficult to clear this hurdle. Furthermore, reporting metrics like view-through & engagement (while great branding measurement tools), tell you nothing about the conversion of an actual qualified audience. Video will still need to be sold (or optimized) on a CPA-basis to be considered effective for DR advertisers.

    Until a reliable effort is made to separate "premium video content" that carries a high CPM from "standard or remnant video content" that can support more aggressive pricing models, DR video campaigns will continue to be a (mostly) futile effort.

  2. Ruth Barrett from EarthSayers.tv, February 23, 2009 at 1:24 p.m.

    Two ideas.

    Start thinking about your business model as a relationship one, not transaction. Read Geoffrey Moore's book, "Dealing with Darwin."

    Create your Video Program as a trailer (short form) to the main event (long form) on your landing page, a media rich environment with the objective of initiating a relationship.

    The Internet is not built to be an ATM machine.

    Why It's Not DRTV.

    Like other mass media formats carried over from print, many simply don't work: the Web is not a radio, not a TV, not a magazine.

    Connected to a database, the Web is smart and has a memory. It connects with other media - TV, radio, and print. It is a communication and collaboration platform.

    We use the ".tv" in our URL address because we are all video and audio and need to distinguish ourselves from the 99% of the sites out there than are text based and mostly silent.

    We are, however high tech marketers who have never worked in TV or radio and don't, therefore, carry around extra baggage, but we understand that processed Information is not working with buyers, especially the younger ones.

    A bad rep.

    Many of the video ad formats being experimented with on the Web are just adding to the intrusive category of advertising which has contributed heavily to turning people off, creating a liability, assuming risk, and over-commercializing the Web. And, quite frankly, DRTV does not have a good rep out there. It's not viewed as being authentic as in misrepresenting actors as customers for example.

    Video is about Web 2.0 tools
    Adoption of software to build infrastructure is slow (databases, collaborative networks, business intelligence being just three examples) and rich media is scary because while nearly everyone can wield a pen to tell a story, few can use audio and video tools. It's hard to believe but there was a time when word processing software was viewed with the same lens as iMovie and Garageband are today. Scary.

    Tenure.

    Yet, as noted in Advertising Age story about the tenure of CMO's being "dreadfully short" (measured in months not years!) the three actions called out for improving tenure are: better alignment with CEOs and understanding their objectives; better leveraging internal bench strength for ideas and innovation; and embracing new technology!

    The really tough part.

    Does anyone in your company have support to become a thought leader and talk as in "broadcast yourself"? Is only the imperial "we" permitted? Is anyone addressing your core values (like integrity if you're a bank) and talking about it?;

    Is anyone communicating his/her critical thinking about how to become sustainable as a company and as a corporate citizen?

    Is anyone actively promoting your consumer education programs around key sustainability issues such as energy, climate change, food safety, etc.?

    In short, called out for contributing to improved tenure rates in the Ad Age article:

    -Better alignment with CEOs and understanding their objectives;
    -Better leveraging internal bench strength for ideas and innovation;
    -Embracing new technology.

    ROI come from across the organization.

    Video is an incredibly effective tool to move thought leaders to the fore so consumers and prospects can judge a company by its leadership, core values, critical thinking, and education programs. Look for ROI measures of marketing effectiveness, not just in sales and response, but in how successful your company is at attracting and keeping talent; being innovative in how and what you sell (the trusted network part); customer retention rates reflecting the trust and respect your customers have in you as being an authentic enterprise.

    Thank you for your time.

    P.S. I have been a direct marketer on the client and agency since 1983. I started earthsayers.tv, the voices of sustainability two years ago because I came to the realization that my lifestyle, including my profession, was unsustainable. I knew, thought, that what I learned from my profession was important to increasing sustainability awareness by making the Web work harder for sustainability. It is not a "do good" cause, it is a business strategy and it is what innovative and forward thinking companies are talking about.

  3. Tyler Willis from Involver, February 23, 2009 at 8:05 p.m.

    In my experience, a lot of companies look for DR online video to hold too much of the responsibility. Going from a video ad placed somewhere to a "buy this" call to action skips valuable steps in the engagement ladder and turns off many viewers. Yet, this is what a lot of people mean when they speak of DR online video.

    Remember, you have to walk the customer through the experience. Online makes it easier to ask the customer for their credit card, but it doesn't remove your duty to spend enough time creating an experience with them in which they want to buy.

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