Commentary

Monetizing Online Video

Internet users are viewing more online videos than ever before. In fact, recent studies show a 45% increase in video views over last year. With all this video content available for viewing, advertisers and content providers are looking for ways to monetize their content by injecting advertisements in their videos. So what is the expected advertising investment in this Internet phenomenon? And what options are available for companies that want to take control of monetizing their content? Let's take a look at some options.

According to recent studies, year-over-year, online video ad spending will continue to grow in 2009, but probably not as high as the 40% predicted. Any growth to the estimated $580 million ad spend this year will be a challenge for advertisers. Content providers want their sites to be viewed by more eyeballs than their competitors' sites, as do the companies that advertise on these sites.

Companies are seeking ways to easily integrate and monetize video content on their Web sites.  End-to-end brandable video solutions exist that cover everything from ingestion, transcoding, media and meta data storage, to player templates, advertising integration, video delivery, reporting and analytics. These systems often support embedded codes which enable viewers to syndicate video content on their own sites. This allows the entire video experience -- including the customized player and video overlay -- to travel with the video, helping the company build brand equity off-site.

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Re-roll, instream and overlay ad playback are options that are readily available and easy to deploy. With in-stream video ads, video players can interact with the surrounding page and dynamically update the customer's Web site in concert with the video ad. Features such as built-in support for overlay advertising allow ads to be displayed in a subtle, non-intrusive way while the user is watching the video content. Overlay ads are optimized for both relevance and performance, ensuring the user sees ads that are appropriate and that the customer's revenues are maximized.

So if you're hedging your bets that your business will be the next YouTube, Metacafe, Blip.tv or even a Hulu, this is the perfect time to upload your videos and try monetizing that content.

9 comments about "Monetizing Online Video".
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  1. Scott Broomfield from Veeple, Inc., March 17, 2009 at 6:42 p.m.

    I would add two things to your list of must haves for a comprehensive video hosting solution:

    1) a Video Asset Management System (or CMS in traditional nomenclature), and

    2) interactivity, so the viewing experience can be lean-in and actionable.

    Remember that the video is the message, so make it relevant and engaging.

  2. R.J. Lewis from e-Healthcare Solutions, LLC, March 17, 2009 at 10:08 p.m.

    Looking for feedback from Video Ad Guru's...

    Online video is clearly much more targetable and contextual than TV - so I imaging the ROI is much better (feedback please), which begs the question. Why is this still such a small chunk of revenue compared with TV, and now its projecting very modest growth (40% is very small off of such a small base).

    What have been the marketer's main objections to doing online video? Feedback welcome.

  3. Dan Lamont from DLP, Inc dba Dan Lamont Multimedia, March 17, 2009 at 11:47 p.m.

    Trained as a stogie old-style journalist I am a lover of good reporting -- facts, citations, examples, attribution -- all that tedious stuff most bloggers find so hard to bother with. This little blurb was pithy but empty. What is the value of THIS content if it doesn't help all those of us who produce multimedia content and yearn for a viable business model to get a better view of the online video landscape? I hope you are right but how about some facts and real information, please.

  4. Jim Kass from Freelance, March 18, 2009 at 1:57 a.m.

    R.J.,

    There are a number of factors for the revenue being lower - but the largest is that the premium traffic doesn't even compare to a fraction of television today. As it grows, there will be continued interest, but the marketplace is filled with all kinds of different technology providers - unlike television which is standardized today. This makes it tough for advertisers to feel comfortable taking the risks required for online digital video buying.

    YouTube is the largest distributor of online video today and the closest thing to a standard, with billions of monthly streams. However, unless the show producers are directly involved in the ad sales process, Google is basically selling against channels of related content by keyword, and that's hardly more targeted than traditional television. Contextual advertising doesn't do as much for brands who are targeting age/sex/location demographics.

    For that matter, many social networks have amazing targeting capabilities, but they are delivering mostly UGC (user generated content), which is tremendously unappealing to advertisers.

    The ones who have the best niche content, know their demographics, and are the ones who sell against it aren't yet delivering the kind of traffic required to sell in-stream ads, so there haven't been many big success stories on that front.

    A few standards have evolved in just the last few years that might help drive new revenue models, but it's still going to take some time. As the number of platform providers and video networks shrink, ideally advertisers will see success from in-stream campaigns.

    My personal thought is that advertisers will have more success, and content providers will be given the opportunity to distribute better quality if they are fully sponsor driven - like the early days of soap operas. In this way, content can be agnostic - appearing in everyone's player and the brand can capitalize on all available traffic. This too has its pitfalls though, unless standard delivery systems are used - to ensure that the content is only distributed where desired.

    There's a long way to go here, but the doors are opening... if you are a content creator, I'd advise that you think of this as independent television. Come up with a proper marketing and sales plan for your content, engage brands in the discussion, and don't start distributing it until you know where/how you will monetize.

  5. Tyler Lecompte from MeHype.com, March 18, 2009 at 9:37 a.m.

    I feel that any interuptive marketing methods that are applied to online video (through either the player itself or the content) will continue to be ignored and avoided by the consumer. Until we find a way to integrate a brand's message directly into the video content, without taking away from the value-added benefits that the consumer is hoping for by investing viewing time, no one will be able to find any standardization for monetization. I also believe that activating/sponsoring Branded User-Generated Video Content through either financial support or investment will be best received and allow for maxmium ROI and targeting.

  6. Assia Grazioli-venier from Flypaper.tv, March 19, 2009 at 11:58 a.m.

    We were invited to the 2009 Media Summit in New York City yesterday. Amidst catching up with colleagues and clients we were able to sit in on a panel on “Monetization of Digital Video, the challenges with scale”, moderated by Steve Robinson of Panache. See this link for a few key points taken from the session, particularly quotes from Beth Uyenco Shatto, Global Research Director at Microsoft, who tried to answer the billion-dollar question through data....
    http://www.flypaper.tv/2009/03/19/media-summit-monetizing-online-video/

  7. Pinaki Saha from Me!Box Media Inc., March 20, 2009 at 11:24 a.m.

    @Nicole Scott

    Nicole, I believe the landscape where you are trying to play is 'Conversational Conversion' - your viewers will recall your video property by the richness of the reviews and conversation that go along with it.

    However, here you often stand on the path of the steamroller of brand presence that work off of current day's CPM metric. They want their spot right there and right then. The nature of a purely impression based model without relevancy is 'GET MY IMPRESSION THERE & THAT'S IT'. This random presence of an interstitial AD or pre-roll often dilutes the message in your video and boots the consumer from digging deeper in your content... and that's the last thing you as a producer or a distributor wants. However, your distribution model if tweaked a little bit can align with the present impression model but cultivate newer concepts of CPXs (CPA, CPI, CTRs) driven by conversations.

    One of my suggestion will be to co-place the video property with associative content (on the site where the video player is sitting) that is of great value to the consumer. Here, the eyeballs will move back and forth between the video and the static property.

    Meanwhile, create the video content in such a way that it entices the viewer to dig deeper in the associative content.. so that if the brand message in between offloads the consumer, he will still land on the sidebar real estate and remain loyal to your site. At one point, if you enable conversation (pings, shares, comments), you may also create smaller content pieces free of ADs (discounted partly by the main video with interstitials) that responds to those conversations. This way you may create an ecosystem around your properties and compensate the AD based parent content with conversational ad-free micro content around it.

    Wish you all the best.

    http://twitter.com/pinakis

  8. Vincent Vandeputte from You View.tv, March 23, 2009 at 5:26 a.m.

    There is off course also the option of Editorial Content or 'Branded Video'. We have developed ways of producing Online Video content for our A Brand customers on a number of our original content sites (www.LetsCookit.tv for instance) and our customers love the exposure and interactivity with our audience. And although we (You View TV) are a start up company, after 18 months of operation, we are now making a profit with our unique Online Video Advertising model. There are not so many companies out there that can say the same...

  9. Peter Contardo from Endavo Media, March 27, 2009 at 1 p.m.

    Having just presented to a group of marketing professionals and agencies about monetizing online video, I can tell you that there is still a wide spectrum of knowledge, capabilities and interest when it comes to the revenue potential of Internet TV platforms. Many asked: What business model do I choose? Ad-based? Subscription? Pay-Per-View? Sponsorship? Affiliate/Syndication? Branded Entertainment? Product Placement?

    Well, my answer was: Choose ALL that support your content strategy and overall business goals. There is no single right answer. ROI benchmarks and industry standards are still emerging. Stories of $100CPMs, and even $1CPMs are irrelevant, unless it’s your business. All that matters is how much YOU get paid for YOUR content.

    It’s time to get in the game. Have a defined content strategy and then produce, publish, promote, repeat! Align your brand with relevant content or risk losing your audience. Find multiple ways to monetize your content, or you might find yourself “sitting motionless” like James Bartholomew, the Marketeer.
    http://endavomediatv.endavomedia.com/video/D8134AC67A/im-a-marketeer

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