Video marketing gets off the ground
Videos on the Internet are nothing new, but it is only now that this medium is gaining importance in professional communication and advertising. — The start of a "Advertising Week" series.
According to an American study by YouTube service provider Pixability, the world's hundred biggest brands (with one exception) have all jumped on this bandwagon. The annual growth rate is 73% and it is predicted that these top brands will post over one million videos on YouTube in 2015 (see chart). The market research company eMarketer expects spending on online advertising videos in the USA to grow by around 40% this year and next year and assumes that sales will reach 5.7 billion dollars by the end of 2014.
At the expense of TV budgets
This growth is at the expense of TV budgets, as findings from the Interactive Advertising Bureau (IAB) show. In a survey, 70 percent of buyer representatives stated that they would probably shift TV dollars into the digital video business in the coming year. There seems to be a lot of excitement around digital video: Among all executives surveyed, this figure was as high as 75 percent. When it comes to digital video ad formats, pre-roll advertising (73 % of respondents) and social video ads (53 %) are at the forefront of interest, according to an April 2013 survey by BeOn, a division of America Online (AOL). The forecast by network equipment manufacturer Cisco Systems, according to which the average US Internet video traffic in 2012 was 4.6 exabytes per month and is expected to increase to 17.1 exabytes per month by 2017, thus more than tripling.
Video consumption as a driver of internet growth in Switzerland
In Switzerland, NetMetrix has been documenting the online video trend for three years with its biannual streaming report. The proportion of internet users who consume audio or video content via the internet rose from 59.3% in 2011 to 65.8% in 2013 (and was 65.8 % in 2012). And it is not conventional radio or TV programs that are streamed most frequently (the proportion of such content is around 30%), but videos on video portals such as YouTube, Clipfish or MyVideo are the most popular among online audiences at 53.8%, followed by videos on news or TV portals and clips on websites in general: around four in ten online users (41 %) use such services at least several times a month.
In Switzerland, too, there are increasing signs that online video is being taken more and more seriously in communication and advertising. An important signal came in April when YouTube launched a special Swiss channel. The timing of this is remarkable, namely a good five years after such a country-specific channel was introduced for Germany. This gives an indication of the market leader's assessment of the Swiss online video market. Just like Google, the subsidiary of the search engine giant also makes its money with advertisements that are tailored as precisely as possible to the target groups. The market entry of the market leader will probably have two effects in this country: Growth in the digital video advertising market will accelerate and volumes will grow, and at the same time prices will come under pressure from the existing players (and earnings will at best at least be maintained by rising sales). The Goldbach Group expects online video revenues in Switzerland to grow at an annual rate of 23% between 2012 and 2015. While they amounted to CHF 15 million in 2011, they are expected to reach CHF 27 million this year and CHF 39 million by 2015, with Goldbach claiming a good half of this market. The second-placed Swiss Video Network from Stailamedia is reporting even steeper growth. Since its launch in May 2011, its gross reach has more than quadrupled, with the number of video plays climbing from 7 million to over 30 million in August 2013. And the number of unique clients almost doubled in the same period, rising from 2.9 million to 4.5 million.
Many questions unanswered
Even if the growth rates in video marketing are currently impressive, this should not obscure the fact that the share of online advertising is still in the single-digit percentage range - in the USA and here in Germany. There are also still many unanswered questions: Is it enough to recycle TV commercials on the web or what does it take for good marketing videos? What is the ideal length for web video spots: 15 seconds or 30 seconds? As pre-rolls or better as longer pieces to better present the brand? Sponsor your own web show or other people's channels? What are the benefits of social video ads? What to look out for in mobile video marketing? What does it take for a video to go viral? Which service providers are ahead of the game and which video portals are particularly suitable for distribution, or is it all just YouTube? Which performance characteristics can be used to assess the success of marketing videos: with the good old clicks or via viewtime and clicks-to-play? What standards apply to pricing? And how can video playouts be purchased not only online, but also programmatically (via RTA mechanisms)? We want to explore these and other similar questions in more detail in the series on video marketing - the author will be happy to receive any relevant information by e-mail: [email protected]
Christoph J. Walther
Market conditions in the TV market are shifting
This fits in with the trend of shifting the TV business to the internet, which is particularly evident in the USA: the video-on-demand service Netflix has been focusing on exclusive in-house productions since this year, including the political drama "House of Cards". The first 13 episodes are said to have cost 50 million dollars, Oscar winner Kevin Spacey was signed up for the lead role, and in the end it won one of the prestigious Emmys, the most important television award in the USA. A similar strategy can be observed at the largest online retailer, Amazon: In April, pilot episodes for 14 potential series were released via its own streaming service and the audience was asked to vote on which series should continue to be produced. And Hulu, the video streaming service of media heavyweights NBC, FOX and ABC, is also focusing on in-house productions for the web. It is becoming clear that market conditions in the American TV market are shifting. This also includes offensives by technology giants Apple and Google. With Apple TV, the video library on iTunes can be brought into the living room, and Google launched Chromecast on the market at the end of July for just 35 dollars. This small add-on enables TV sets to easily play content from the Internet. Google has thus made a new attempt to penetrate TV screens after the failure of Google TV.
















