The Digital Looking Glass

Online Video GRPs (Internet GRPs)

2009-06-28T23:12:00.001-07:00

Some folks on the online side readily dismiss GRPs as outdated and a poor measure of the value of digital media.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!

2009-05-08T00:14:00.001-07:00

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

2008-10-15T10:10:00.000-07:00

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

2008-10-01T09:29:00.000-07:00

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

2008-09-21T20:25:00.001-07:00

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

2008-08-15T18:01:00.001-07:00

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?

2008-07-30T00:23:00.000-07:00

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.

ARF Audience Measurement 3.0

2008-07-10T07:09:00.000-07:00

Co-presenting our video research with comScore. June 24, 2008.

Segmentation of online video viewers into four segments:

(1) Sight & Sounders
(2) On Demanders
(3) Television Devotees
(4) Content Explorers

Video Research Focus

2008-06-30T19:32:00.000-07:00

The ad landscape for professionally-produced online video has advanced significantly in the past 12 months.

The initial research focus by the networks was determining whether online viewing was cannibalizing over-the-air viewing. It makes a difference because it doesn't cost the network any more to have 100k additional viewers over-the-air. However, if those same 100k viewers watch online, the network incurs significant bandwidth costs. (Content delivery networks are more smartly delivering download-and-play streams by pausing stream delivery when the video is paused. This prevents wasted bandwidth in case the viewer doesn't come back to watch the rest of the stream.)

With sufficient evidence (for now) that online viewership is incremental, the primary research focus by networks is optimizing the ad experience for viewers. They are sharing best practices with advertisers and agencies. Fewer advertisers are using the same spot throughout an entire episode (for which they "own" that consumer-viewing experience). Rather, they know that to enhance the user's experience, they have to rotate creative. For example, on Hulu, DirecTV rotated their TV spots about a fictional cable company it is mocking. You won't see the same DirecTV spot twice.

Four or five months ago, online viewers were barraged with the same TGIF or Palm Centro spot (with the mini-me's) four or five times during an hour-long episode. Not every show is an "owned" experience anymore, with creative wear-out concerns and negative repercussions very realistic possibilities.

Other general findings show that the more interactive and/or memorable the ad experience, the more positively it reflects on the advertiser. Hence, a "branded canvas" (during a commercial pod) with multiple interactive components rates significantly better than a flat 15-second or 30-second spot. A Media Contacts advertiser, Choice Hotels, is running on NBC.com with a Pac-Man like game during the break.

Video and BT

2008-06-20T23:14:00.000-07:00

I agree with eMarketer's Hallerman in the most recent Behavioral Insider blog entry (Video is BT's new BFF) that behavioral targeting (BT) will eventually come into play when there's more video inventory. Besides, how can you not love a blog entry that uses the acronym BFF?

Even now it could be applied to UGC and short-form content. But my take is that UGC will be on the lowest rung of the video pricing ladder and will continue to be dominated by overlay units rather than any pre-, mid-, or post-roll. Many, if not most of this inventory, will be sold on a CPA basis, and video ad networks will come into the forefront - it's the monetization (and arbitrage) of remnant inventory all over again. So BT will definitely play a role.

Then, as we go the next rung up the video pricing ladder, BT can also play a role with short form professionally produced content as well.

As you go higher up the value ladder, BT will have the least influence with premium first run shows online. They will still command premium rates and there won't be enough eyeballs generating the supply, especially with the networks offering makegoods on audience shortages with digital makegoods. The most profitable aspect of BT is taking remnant inventory and tripling or quadrupling the CPM with data. You can do that high ROI at the bottom rung of the value ladder but not at the top.

Out-of-Home Video - The Real Third Screen

2008-06-20T16:06:00.000-07:00

Mobile is touted as the third screen. Mobile video, though, has an unjustifiable amount of buzz as the hot topic. In the US, only 6% of subscribers watched video on their mobile devices (according to a recent M:Metrics release). Granted, that number will push upward with more 3G devices and especially widely popular ones like the 3G iPhone. But it will take a while for the penetration of mobile video to even approach 20%.

On the other hand, out-0f-home video is the real third screen. Ad spending reached $1.3 billion in 2007 and is forecasted to reach $3.2 billion by 2011 (according to DigitalSignageExpo.net). The potential reach is staggering because it can take so many forms in a variety of venues: gas stations, retail locations, bars and restaurants, taxi cabs, sports stadium, health clubs, doctors offices, movie theaters, and more. According to a recent study by Seesaw Networks (Digital Out-of-Home Media Awareness and Attitude Study), on average, people recall having seen digital signage in six different types of locations in the past week.

The variety of venues, screen sizes, and network operators make it a daunting medium to take on. The entities of CBS Outernet and NBC Everywhere , as umbrella networks with familiar content, will go a long way in bringing media agencies and advertisers to a comfort level for making buys in the medium. OVAB (the Out-of-Home Video Advertising Bureau) will be releasing some audience research this month. In addition, OVAB also has RFPs out to develop a planning tool.

IAB Digital Video Ad Format Guidelines

2008-05-15T16:41:00.000-07:00

Last week, the IAB released video ad format guidelines for publishers, advertisers, and agencies. Because video encompasses a lot, the scope of the guidelines only covers in-stream video. The formats outlined by the IAB are exactly what's needed for the industry and covers the highest priority areas in a sensible manner.

In-banner video is covered under rich media guidelines. The most important aspect there, as part of the user experience, is that audio is user-initiated. In-text video is a minimal part of the user experience. Standardization isn't an issue.

The next area of standardization for publishers for video is measurement of each of these video ads. The key is determination of a set of measures that would be standard campaign reporting. Many of these are already provided in-depth by rich media providers like Pointroll for their ad units. This needs to extend to the publisher and/or ad server side, in terms of what is provided to advertisers and agencies.

Video ad impressions should only count when associated with user-requested content. For in-stream video, these impressions correspond to a specific piece of user-requested video content (URL). As part of a standardized set of metrics, publishers need to provide the percentage of impressions with user-initiated audio for the ad unit (where applicable), a key measure of the campaign's engagement (or at least eye-catching ability). As for video that automatically plays when a page loads (think the front page of espn.go.com), the page was still user-requested. However, the video was not specifically user-requested. Hence, it ought to be considered less engaging to the viewer than if he/she had requested the piece of video content. The counter example to ESPN would be a video URL linked from the CNN front page on which a viewer clicks. Ultimately, though, this differentiation of value likely falls to advertisers and agencies to assess among various publishers.

Ad:Tech - Online Video Panel

2008-04-16T15:02:00.000-07:00

I was a last minute addition to the San Francisco Ad:Tech panel on Online Video. The title of the session was "Beyond the Pre-Roll: That State of Online Video." Our moderator, Daisy Whitney, of TV Week, started by criticizing the intrusive pre-roll format. We walked through several other ad formats that accompany online video content. On Monday, the day before Ad:Tech, Eric Franchi of Undertone Networks wrote in MediaPost's Video Insider about pre-roll and the new video ad formats, mentioning the heavy fire that pre-roll has been getting. What is aboundantly clear is that there is a big disconnect between the consumer experience of pre-roll and the agency/advertiser view of pre-roll as a valuable sight/sound/motion messaging vehicle. You simply don't get that with a sponsorship or display unit.

Chris Allen of Starcom and I discussed that from the advertiser side, pre-roll is what our clients are comfortable with - they are re-purposing TV :30s. The advertisers have already spent money on the production costs and want to stretch the creative dollar even further. They have also approved the brand messaging for the TV spot. Finally, with the proliferation of ad formats accompanying online video advertising, pre-roll and mid-roll are as standard as they come.

Overlay units (generally unobtrusive and can be performance-based) are generally better for the consumer experience. However, there is a monetization issue for the publisher. Overlay units will never be able to charge the same CPM as pre-rolls or mid-rolls (Gordon McLeod of WSJ.com said they charge $90 CPMs in the TV 3.0 session). If performance based, the revenue won't match either. Hence, Eric summarized well in the Video Insider blog post stating that pre-roll is best for professionally produced content and overlays are best for the long tail.

A couple other discussion points I brought up is that advertisers are trying to figure out how to reallocate their media budgets. If they spend on online video, where should that budget come from? TV? Online? They look to us, as their agency, to compare effectiveness.

Another interesting question that Daisy posed was whether made-for-Web productions are viable models. Those ventures absolutely can make money because production costs are dramatically lower. On the flip side, they are hard pressed to get sufficient distribution to become a massive hit, which will always be the advantage of the television networks. Web-only series have the appeal of podcasts in that they can reach engaged but niche audiences. It takes motivated media buyers to find those outlets for their clients.

To circle back to the pre-roll discussion, my own feeling is that the eventual winning execution for online video (winning proposition for both advertiser and consumer) will be a persistent rich media companion ad that pauses the video content upon interaction with the ad unit and contains expandable panels of video.

IAG acquired by Nielsen

2008-04-08T19:31:00.001-07:00

Nielsen adds a highly complementary and fast-rising business with the addition of IAG Research to its stable.

IAG Research is the company that produces the lists of most well-liked TV ads, which is featured on AdAge.

The company gathers its data by creating questions around broadcast TV content and advertising during that time slot. Those questions are provided to the public not by way of survey invitations but a contest that provides points for correctly answering questions. With that kind of approach, there are definitely ways to cheat or game the system, which IAG needs to constantly prove it effectively accounts for. It certainly appears to have provided a satisfactory resolution such that Nielsen (my previous company) deemed it appropriate to acquire the firm.

In addition, IAG had sufficient weight that it was becoming a second currency used in some broadcast contract negotiations.

The acquisition makes perfect sense at a time where TV content and advertising is now easily consumed online. The most intriguing possibility lies in the idea of assessing effectiveness of sequential messaging for a single advertiser in a single program. For example, if Hulu can prove that sequential (and exclusive) messaging that builds and tells a story is 3x more impactful than the same 30-second spot repeated, then online video has a nicely quantifiable high-value proposition. Online video CPMs no longer need to be driven by supply-demand. Also, the exact same ad spot can be evaluated in both the TV viewing environment and the online viewing environment to compare branding effect and relative cost effectiveness between them.

Video Analytics

2008-04-03T14:47:00.000-07:00

The introduction of YouTube Insight gives content creators some nice options for tracking distribution of video assets around the Internet. In addition, this arms viral video marketers with data tracking to show evidence of impact.

Before YouTube Insight, there was also TubeMogul and VidMetrix (part of Visible Measures). These services appear to crawl for publicly available information on video views each day in order to track video view counts. Hence, they are able to provide video views and comments on a daily basis.

When videos are transcoded through their services, TubeMogul and VidMetrix would be able to attain more detailed information and provide geographic and demographic detail. (However, in this video, TubeMogul states that demography is inferred from IP address, so data quality is highly questionable.) In order to entice content owners to upload through them, the sites offer a single upload service in order to distribute across multiple sites, including YouTube, MySpace, Y! Video, Google Video, Metacafe, Revver, and Veoh, among others.

Two other companies in the video analytics space are Streametrics.tv and divinityMetrics. I will have to spend more time reviewing their services before posting.

Online Video Ad Format Experimentation

2008-03-17T19:36:00.001-07:00

Many, if not most, of the big Web video publishers are experimenting with a variety of ad formats. Everyone is familiar with pre-roll, mid-roll, and post-roll. These early ad formats have been essential in bridging the comfort gap for mainstream advertisers between traditional TV spots and digital video.

Some of the uniquely digital formats that have been utilized in the past few years are overlays and companion units, of which many are rich media ads. One video publisher has found through its analysis that the more interactive the unit, the better it is perceived by viewers. Complex games with multiple elements perform better than simple games. Simple games perform better than rich-media but non-playable ad units, which are in turn better than static display ad units.

The stories highlighting Hulu's efforts to allow consumers to choose their advertising are exciting. Think "Choose Your Own Adventure Books" in the 80s. What Media Contacts has confirmed with our own research is that there is no single bucket of viewers and their perception of online video ads. Allowing viewers to choose among different spots is nice. What's better is
being allowed to choose between a 3-minute trailer with uninterrupted programming and a show with a few short commercial interruptions.

Online shows have brought back (and in most cases, features prominently) the single-advertiser sponsorship.

Upcoming blogs: Viewer research, Distribution model challenges

Online Video Equals...

2008-03-14T19:24:00.000-07:00

Online video might well be equated with user-generated content. Now the next generation of online video is professionally produced content, driven primarily by the massive wave of first-run television content being made available on the Web.

Hence,
Online Video 1.0 = Web 2.0
Online Video 2.0 = Web 1.0