Online Video GRPs (Internet GRPs)

Some folks on the online side readily dismiss GRPs as outdated and a poor measure of the value of digital media. That is a mistake. The big budgets are still allocated to television and will stay there for a long time to come. For consumer goods advertisers that have 90+% of their budgets in television, marketing mix models are based on GRPs and are an essential part of the planning and budgeting process.

If GRPs are not used to measure online in concert with other media, then online is quite likely relegated to either (a) an arbitrary budget that pales in comparison to television, or (b) a budget that has that grown in small increments over time by proving its efficacy, but is still small in relative terms.

For big-budget consumers goods advertisers, now is the perfect time for agencies and publishers to speak in terms of iGRPs (Internet GRPs) if they are not already doing so. In the past 18 months, professionally produced long-form video is pervasive enough for even the most skeptical American marketer to realize that they can watch their favorite shows on their laptops. Any marketer who still doesn't realize that is a lost cause anyway.

That simple understanding has been a huge bridge to acceptance of parity between TV and online video, starting with spots that would run during broadcast programming. Of course, we have plenty of reasons why the online spot is much more valuable but we can get into that later.

The next step is then understanding of various forms of online video advertising and assigning a value to each ad type (e.g. in-stream vs. in-banner vs. overay). What is the value of each of those ad types relative to each other? How do you quantify the impact? There are methods to approximate the answers to these questions but in the long run, for any specific marketer, the real answer is that it requires custom research and ongoing analysis in order to stay up-to-date. Online video's impact is going to be different for every audience.

Knowing all this, we bring it back to the framework of GRPs for planning media. Understand the target audience's likelihood to be exposed via online video vs. a television plan. What the XMOS studies of five to eight years ago showed was that audiences are overexposed on television and that exposure through digital media is highly complementary. Therefore, a redistribution of budget to more online (specifically online video after you answer the questions above) ought to provide a much more efficient way to achieve a marketer's reach goals.

Coming back to the comparison of online video ads compared to television ads, several publishers have conducted studies demonstrating the increased value of online video. Hulu, for example, using Nielsen IAG Research, has shown that the same spot is almost twice as effective. Granted, that depends on whether or not you accept Nielsen IAG's methodology (recall surveys served as contests) and the validity of its upper funnel metrics. In the UK, ITV isolated viewers in a lab environment, asking some participants to watch a program on television and others to watch the same program online, and testing recall. Not surprisingly, the online viewers demonstrated higher recall. This test scenario actually favors television in several ways - 1) by forcing a viewer to watch in a lab environment, the study participant is changing from a lean-back mode to a lean-forward mode. In the "wild," Nielsen commercial ratings are not providing census-type measurement of actual households watching. It's a measure of tune-in. There is bound to be a bigger drop-off between "television tune-in to actual watching" than "online tune-in to actual watching." In summary, though, there is a ratio of an online video impression to a television impression. For any given audience, media plan, and marketer that ratio will be different but it is still critica to figure it out.

All this is to say that if online media is to secure a larger portion of media budgets, it still requires a logical and convincing approach to Internet GRPs, answering all the questions that surround them.

Hulu's on a roll!

Huge news for Hulu earlier this week with Disney now an equal co-owner along with News Corp. and NBC Universal. Now CBS is the glaring omission and the Disney news certainly provides a lot of momentum. With a lack of traction by CBS Interactive's TV.com, not to mention a non-intuitive way to search for full episode videos, it may not be long before they more seriously consider Hulu as the primary source for distributing full-length CBS shows. However, distribution deals with the rest of the CBS Audience Network (Yahoo!, MSN, AOL, Veoh, Joost, etc. would all have to be re-negotiated. As it stands, Hulu handles all syndication deals for News Corp. and NBC Universal.

comScore announced last week that Hulu broke into the top three video properties in March, continuing to ride the momentum built from advertising in the fourth quarter of the Super Bowl.

A Video Insider post cites estimated revenue of $120 million compared to $200 million for YouTube. However, they have very different infrastructure costs. Hulu pays out a lot to Akamai for high quality video experiences. YouTube has the ability to play video backs at a decent quality. The number of clips at YouTube is extremely high because videos don't play longer than 10 minutes. The net effect is 6X more minutes on YouTube than Hulu (incurring bandwidth costs) according to comScore Video Metrix data. So a key question in evaluating financial viability of these two video giants is the average compression and bandwidth rates per hour of video delivered for each site.

My bet is that for YouTube, the average bandwidth cost will surely increase in order to retain users. Consumers have many options for watching video these days. YouTube is well past days of free gritty video to draw users when there's also Metacafe, Daily Motion, Vimeo, Veoh.

Viral Video article in Mediapost

I've been trying to keep this blog from devolving into a series of links to news articles and other blog posts. without additional commentary. However, I felt this Mediapost article was too good to pass up. It features a study by Feed Company ("Viral Video Marketing Survey: The Agency Perspective") and provides useful views on measuring success.

Sports and Digital Video

In the latest MediaPost Video Insider, Joe Tartaglia does an excellent job recapping the advantages of (1) sports for online video and (2) the trend of more streaming sports programming availability, which is coming with the NHL and we saw both with the NCAA basketball tournament and the Olympics.

1. Ease of aligning a brand with a target audience
2. Natural breaks in sports make for more natural outlets for advertising
3. Increased reach for people at work
4. Increased frequency across multiple platforms (simultaneous TV watching and Web browsing)
5. Increased engagement across multiple touchpoints (especially with gamecasts, fantasy sports updates)

Revised Expectations

A few weeks ago, eMarketer drastically cut back its online advertising forecast, based on the IAB's/PWC's numbers, separating out video from rich media.

The revision says two things: 1) eMarketer forecasts (and the same should probably be said for Jupiter/Forrester) are definitely more art than science, and 2) the economic environment will keep online advertising slow longer than expected. No doubt, in better economic conditions, the video ad market would benefit from more generous budgets, test-friendly moods, and experimentation. On the side of the content owners, the networks would be going along, pouring more money into digital content expansion and being more aggressive with user experience guidelines, for example, further limiting pre-roll to 10 seconds instead of 15.

On the topic of revised forecasts, about five years ago, an analysis took research firms to task for providing overly rosy forecasts by then comparing against actual numbers. It would be nice to see accountability in forecasts again.

Viral Video

All advertisers these days would love to get extra mileage out of their advertising. They ask us (their agency) how they what they should do as far as a viral video strategy. The problem is that the concept of creating a viral video is practically, although not completely (Nike), an oxymoronic concept.

Can any old TV :30 be a video with viral potential? Hardly. There has to be a hook. I mentioned Nike because if there is one company that has done an outstanding jobat creating amazing spots that consumers will watch repeatedly, it's Nike, by way of its long-time creative agency Wieden-Kennedy. Specifically, I'm thinking of the "freestyle" basketball spot from a few years ago of NBA stars intermixed with streetballers dribbling and doing tricks. That spot was decidedly cool and resonated incredibly with basketball players everywhere, of all skill levels. By contrast, should another brand, not nearly as iconic as Nike, say a CPG, hope to do something with their TV assets, like put them on YouTube and count on additional exposure?

What downside is there to doing that? How much do marketers want to protect his or her brand? The downside is that a consumer stumbles upon the site and thinks, so what? What a waste of time. The downside is that on the Internet, once it's out there, it may be impossible to reel it in. What happens when there's a quick change in the brand direction? If the previous message was all about affordability (as an example) and there's a decision to move the brand upscale and emphasize quality, the old affordability video is floating out on the Internet. It may have been copied onto dozens of smaller sites or talked about in blogs. Does that matter?

Impact depends on the company. It may not matter. Creative with messaging about promotions or guarantees would be best not to be made available online. Creative with more enduring appeal (like the Nike basketball spot) definitely has a place.

Jarvis

New Research - Cannibalization?

The next wave of online video viewing is upon us. While initial research indicated that online viewing of long-form television content was incremental viewing, new research by IMMI indicates cannibalization.

A full half of viewing by people measured by IMMI were shows that aren't watched in any other way except online.

This threatened erosion of the television audience was what led the CW to eliminate online viewing of Gossip Girls in April.

The economics aren't yet working in the networks' favor. This indicates a few likely scenarios in the short term: (1) Networks scale back dramatically on making shows available online, (2) a week-long (or longer) delay in episode availability to encourage live viewing.

However, while the report implies cannibalization, it is also possible that the online viewing is incremental because the online availability of the show generates trial that may not otherwise have occurred.