It almost embarrasses me to join the fray of people covering the world of online video. Admittedly, though, the world of online video has begun to take shape, and quite a bit has unfolded within the past week. This week’s news synthesis on the world of online video might offend regular readers of TechCrunch, of which I’m not yet one, and Mashable (awesome stuff). For the rest of the us, especially those entrenched in search, lead generation, and affiliate marketing, this should at the least save you a few hours worth of time. So, where to begin? In Part 1 here, we take a real stupid simple approach by exploring what exactly we are talking about when we say online video. In Part 2, also in this week’s DM Confidential, we dig a little deeper at some of the stories making news in the online video space.
The term online video encompasses almost too much. Online video can reference both content and ads. For content, this generally implies the homemade, pirated, and in-between, found hosted on YouTube, which by design acts as a hub for content and a platform for distribution. Videos hosted on YouTube can be found in just about every nook and cranny of digital distribution, with a few probably in your inbox. But, online video content also encompasses the more traditional, TV on Internet experience found in the free and paid footage at news sites such as CNN. In a category all its own are fee based video download services, such as those now found at iTunes and via Amazon’s Unbox (not to be confused with Microsoft’s Soapbox).
Similar to video as content, video advertisements also come in different flavors. As has existed for several years, there are video ads that show on a variety of content sites. As a subscriber to the Wall Street Journal Online, I can’t seem to dodge them, and this might be my bias speaking, but I would rather try to ignore a flash game than an old guy selling investment services. The newer version of online video advertisements comes from leveraging video as content. This is a newer use of online video only because video as content didn’t represent a significant source of traffic until sites such as YouTube came to prominence. These video ads tend to come in two varieties – pre-roll and post-roll. The former are ads shown before the particular video piece plays with the latter showing after. The different types of video ads remind me of SEO and PPC. They might sound related, but completely different skill sets are needed. The person that buys video ads on content sites (as a standalone unit) will not be the same person doing pre- and post-roll spots.
As Baris Karadogan, partner at venture capital firm ComVentures, pointed out in his recent piece for Venture Beat, there is a reason that so many people are going gaga over video. If online advertising is going to continue to increase, then there needs to be new channels that open. Google will earn more than $7 billion dollars this year from what he called phone book listings, that means almost all of their money comes from text ads with no pictures, no animation, and certainly no video. Changes made to the algorithm for showing those ads helps squeeze more revenue through increased efficiency. Deals with Intuit to acquire the longer tail of businesses also increases revenue but it does so by trying to fill in the gaps of its existing platform. None of those help Google (or anyone else) tap into the demand for video, although one could easily see Google simply deciding to create VideoSense where it takes its current text feed and displays it in a pre or post roll format by scraping the tags associated with the video.
Many advertisers have already jumped on the video bandwagon, but all of the dollars available have yet to find a home. While there are more than enough video impressions available (namely videos as content that can have a pre- or post-roll inserted), the head / tail, premium / remnant issue exists. There is a limited number of what advertisers feel comfortable buying, and more than enough impressions of what they don’t want to buy. It isn’t obvious exactly where performance marketing might fit into this, but if there is one thing that has proven itself time again, where there’s remnant, there’s a way; and, where there is an opportunity to arbitrage, there is a play.
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