What’s the ROI for Brand Advertisers and Online Video?

With Emmy nominations going to Netflix’s House of Cards and Arrested Development, the world of online video can say, “Well we finally made it.” But despite a growing viewership, and TV awards on the horizon, the question remains whether these signs of online video success will actually drive a significant return on investment (ROI) for brand advertisers and the video platforms. We were pleased to bring together a panel of experts at our BRITE ’13 conference to prognosticate on this issue.

Jonathan Knee, Faculty Director of the Media Program at Columbia Business School, began the debate by asking if this disconnect was a product problem or a marketing problem. “I think there are definitely measurement complications,” stated Kerry Trainor, CEO of Vimeo.com, “the internet is so fragmented it’s like trying to measure a sprinkler system. For all of the evils of the 30-second spot, it is standardized. You can build a marketplace around it…. so we have an ad product problem.” This was a sentiment agreed to by all on the panel.

Nielsen Cross-Platform Report Q1 2013

However, John Montgomery, COO of GroupM Interactive, stated that he doesn’t see an inequity between the level of viewership and the ad spend going to online video. Using Nielsen’s 2012 figures, he notes that Americans are spending about 3% as much time watching online video as compared to TV while GroupM spends about 5% of its “TV ad budgets” on online video ads. This was a prescient use of dollars for GroupM, as Nielsen’s recent reporting for Q1 2013 now shows online video as indeed reaching 5% of the time spent on TV.

Thinking even bigger when it comes to measurement, Michael Keriakos, Co-Founder and President of Everyday Health, talks in detail about how his company has developed what amounts to a big data strategy that merges its own data with a range of 3rd party data. Through such efforts Everyday Health calculates, with good confidence, the pharmaceutical sales lift that is driven by peoples’ exposure to, and interaction with, a particular online video ad or marketing effort.

In the end, Larry Aidem, CEO and Founder of IconicTV, brings the discussion back full circle to the marketing problem that online video still faces. “Selling television the way CBS does, for a shrinking audience, continuing to see prices go up is a breathtaking accomplishment.” Larry believes that online video companies need to better sell their ad offerings and package them as if they were a TV spend. Although he does note there are still targeting problems with the ad serving technologies, like his own experience with a Romney ad running on JAY Z’s online venture Life+Times and an erectile dysfunction ad that ran on myISH.com which has a primary audience of teenage girls.

The complex ecosystem of online video will certainly lead to more growing pains, but marketers and advertisers are certainly paying much more attention to it. The latest IAB Internet Advertising Revenue Report (April 2013) found a 28% increase in ad revenues for online video from 2011 to 2012. And as viewing and spend increases, Americans will indeed watch more online video ads. Just last month, comScore reported that a record 20 billion ads were watched by US consumers, reaching nearly 54% percent of the total U.S. population, who saw an average of 121 ads in June.

BY MATTHEW QUINT

What’s Next for Brands in Online Video

In the last few years, marketers have increasingly turned to visual storytelling through online video platforms, like Vimeo and YouTube, to get their brand’s message across to consumers. As a result, the competitive landscape for online video went into overdrive in 2012.

With new kids on the block like VooPlayer, LeadPlayer and Wistia, established companies such as Vimeo and YouTube have had their work cut out to differentiate themselves and retain their lead in the marketplace. These players are offering features that marketers can tap into. According to Business2Community, these sites allow creators to brand their content, conduct data analysis, create call-to-action overlays and automatic video sitemaps, as well as offer a more intuitive interface. The options for uploading and sharing high quality video online are endless these days.

So, how is Vimeo, the IAC-owned video platform, handling this uptick in competition? CEO Kerry Trainor is more focused on generating revenue for the user than increasing functionality.

Trainor tells Fox Business, “It’s always been part of the vision to not just provide that great environment to showcase this content, but to start to empower these creators as they build businesses.” Last fall, Vimeo launched a new feature, a virtual “tip jar.” Take for example an amateur filmmaker who posts a timelapse video of the breathtaking Aurora Borealis in Alaska on Vimeo. Say a viewer is wowed by that video.  At the click of a button that person could tip the content creator anywhere between $0.99 and $500. When you consider the fact that Vimeo attracts about 41 million unique viewers each month, that’s a tremendous audience to potentially reach.

Vimeo does pocket 15% on every donation. And only creators who subscribe to Vimeo’s premium services can participate. Trainor, however, alludes to an option down the road where content developers and brands will be able to bypass cable companies and offer their unique video content directly to their audiences on their own terms and pricing.

Regardless of how the fast-moving video industry continues to evolve, Trainor is confident that bolstering Vimeo’s top-line is the best course of action in the short-term – perhaps to seed future innovations in features and usability.

See Mr. Trainor speak about the changing role of online video in brand strategies at the BRITE ’13 Conference (March 4-5).

BY NANDITA RAY