Tuesday, December 22, 2009

Local, Local, Local

The amount of deal activity in local media over the past few months has been breathtaking. Dozens of startups targeting local advertisers and the communities that support them have announced marquee fund raising rounds; and almost every major media company has made a move to expand their presence at the local and hyper-local level of the advertising ecosystem.

Much of the activity follows the traditional media model of creating compelling content that advertisers will want to attach themselves to. AOL is dedicating significant resources to Patch, the hyper-local news network it purchased earlier in the year; CNN just announced an investment in Outside.in, a fast-growing hyper-local content and advertising platform; and ESPN is planning a national network of local sports news sites. All are capitalizing on extraordinary marketplace efficiencies while newspapers and broadcasters are weighed down by outdated distribution and consumption models. Interestingly, the success of these three initiatives are somewhat dependent on the promotional and content resources of a big mother ship.

Many of the venture-backed businesses are betting on the widespread shopper adoption of mobile apps. It was not uncommon this holiday shopping season to see shoppers snapping pictures of intended items and price comparing. Startups like Groupon (which just announced a $30 million funding round) and Postabon are creating social, online and mobile deal finding networks featuring local retailers. I recently typed my zip code and "jeans" into the iPhone Postabon interface and was directed to a 50% off sale for Lucky jeans in my neighborhood posted by another user.

Google's ambitions in local have been nothing short of schizophrenic. Just two months after launching a new search product for local businesses, they pulled the plug and were rumored for a few hours to be purchasing Yelp for $500 million. When Google initially announced their plans for the new product, many local media experts questioned their chances of success without a large, seasoned local ad sales force to cajole digital-media-resistant small advertisers. Undoubtedly, Yelp's 300 person sales force was a critical factor in Google's interest. The new rumor is that Yelp is planning an IPO.

The weakness of the newspapers, the emergence of mobile, and the ease of entry into the local conversations are driving all the activity in local.

But local advertising is a tough business. As a well-known local media consultant said, "local is sold not bought." Three things are needed for a company to succeed in local: a great product, significant capital to drive awareness and, most importantly, a big local sales force. The Yellow Pages became a $20 billion category, dominating local local advertising for years, based in large part on a famously aggressive local sales force numbering in the thousands.

It will be interesting to see who gains traction in 2010.

Wednesday, December 9, 2009

A Massive Oversupply of Media Impressions

Most advertising is wasted. Billions of media impressions every day hit the wrong people. While there is some truth to the premise that advertising is working subconsciously, the reason most of us glaze over ads, confident they didn't have an impact, is because we are right. They completely missed the target.

Every day we are exposed to a few more ads than we were the day before as advertising invades every nook and cranny of our lives. But when so many horns are blaring, we really can't hear anything. A recent study revealed that online banner advertising click-through-rates have fallen to basically zero.

The big media agencies that control roughly half of the $150 billion spent on advertising each year are desperately trying to develop better tools to plan and evaluate media placements while dozens of new companies are introducing more sophisticated ad targeting technologies.

This will help, but for the foreseeable future there will be, in the words of Martin Sorell, "a massive oversupply of media impressions."

Amidst such clamor, never has good, old fashioned, word-of-mouth ("WOM") advertising been more effective. According to a recent article in Media Daily News, WOM is the single most effective tool to promote a TV program after actual TV tune-in ads.

Every interaction I have had with a brand during the last week was based on a WOM recommendation - from viewing a new cable TV program to buying a pair of jeans at a new store to checking out a new item at Trader Joes.

Seems the best thing a brand can do is delight their customer and do everything they can to get them talking about their experience.

Which is why social media has quickly become a brand's most important marketing tool. After all, social media is simply a platform to monitor and amplify WOM.

The two busiest businesses in my neighborhood are Trader Joes and Whole Foods, both notorious for little-to-no traditional advertising but tremendous WOM buzz and social media savvy.

More and more top brands are assigning their best marketing executives to social media roles, putting even more pressure on the standard advertising formats to hit their marks.

Tuesday, November 24, 2009

Cable Operators Secure At The Top Of The Video Food Chain?

It’s been a good couple of months for cable companies. Comcast is buying NBC; TW Cable’s stock is having a nice run and Cablevision’s profits tripled in the third quarter.

What’s most striking is how effectively they are leading their enormous customer base into the new world of on-demand, time-shifted television viewing. VOD usage is showing double-digit month-over-month growth and DVR subscriptions are soaring. (Driven much by cable’s efforts, more than 1/3 of US TV households now subscribe to DVR.)

The DVR story is actually quite compelling in its own right. Maligned by the advertising and programming communities for its ad-skipping capabilities as recently as a few months ago, DVRs are now seen as a powerful ally, adding millions of viewers (now tracked by Nielsen), giving some faltering shows new life and adding much needed ad revenue to the networks. That’s right – adding ad revenue- because, it now turns out, only 50% of DVR users actually skip the commercials.

In a recent blog post, Mark Cubin wrote with religious fervor about the enormous opportunities created by DVR technology:

"Do you not realize that the DVR is the one device that can save all things traditional and holy to your business and stock price? That the DVR is what every internet based TV delivery device or service aims to be when they grow up? That the more powerful and feature rich that you allow DVRs to become, the sooner your customers, the people that pay an average of what, $80 dollars a month to consume your content, will realize that all the capabilities that the internet pundits predict that the future of the internet will offer, are available today for the DVR ?"

The cable operators are making every move to be sure they control their own destiny as video consumption habits change with breathtaking speed and dozens of competitors eye the ultimate prize of the living room TV screen. (Including, now, game consoles like the Xbox 360 and PlayStation 3.)

Comcast and TW Cable's still somewhat nebulous TV Everywhere plan has captured the attention and imagination of the media blogosphere. Through an online authentication system, TV Everywhere will provide cable customers access to premium cable programming online anytime they want.

Like VOD and DVR, TV Everywhere could become another enormously successful product that keeps the cable companies firmly in front of consumer viewing behavior and at the top of the video distribution food chain.

Wednesday, November 11, 2009

User Generated Ad Campaigns Come of Age

Jim Farley, Ford's VP of Marketing, gave a thoroughly revealing and insightful presentation at the JD Power Automotive Marketing Conference last month.

He was particularly forthcoming about Ford’s marketing strategy, showing examples from more than a dozen initiatives across every budget range and media platform. What he seemed most excited about were the relatively low cost, user generated/crowd sourcing campaigns like the Fiesta Movement introduced earlier in the year to support the launch of the 2011 Fiesta.

He showed various clips submitted by users "that didn't cost a dime" but more importantly provided buzz, customer feedback and probably a treasure trove of ideas for future campaigns.

The initiative has generated hundreds of submissions like the one above.  Regarding performance, Ford provided the following stats to Mashable:
  • 4.3 million+YouTube views thus far
  • 500,000+ Flickr views
  • 3 million+ Twitter impression
  • 50,000 interested potential customers, 97% of which don’t own a Ford currently.
Just last week, an article in iMedia colorfully described mass collaboration as the single biggest marketing trend.

"It's no secret ... that user-generated content was a sucker punch to the jaw of the marketing world over the past several years. A fundamental shift has now occurred in which brands have become a conversation -- and audiences have just as much of a say in the shape of that dialogue as marketing directors and agency copywriters."

And while a marketer with billions to spend was waxing poetic about the power of customer collaboration, Etsy, an online crafts marketplace with a loyal and growing following, ran a contest inviting users to submit 30-second commercials. The contest and subsequent submissions got the attention of none other than Bob Garfield at Ad Age, who was effusive in his praise and stark in his prediction of a new order.

"The results are positively remarkable. The 10 semi-finalists are as a group better thought-out and realized than any 10 random commercial running on TV anywhere in the world. And a whole lot more charming," Garfield said.

Is there any doubt that user generated ad campaigns have come of age?

Friday, October 30, 2009

Measurability and Creativity

Google has successfully pushed the advertising industry towards a much higher standard of accountability with their performance-based pricing model. It has been a critical factor in their enormous success.

Advertisers spend roughly $150 billion in the US each year and most will tell you they are not really sure what works and doesn’t. By offering advertisers a clear measure of success (only pay when someone clicks), Google is providing some definition to one of the most inefficient marketplaces in history.

Traditional media formats like TV, Radio and Print are now under much greater pressure to prove their value. In a recent issue of The New Yorker, Ken Auletta writes about a 2003 meeting between Mel Karmazan (who was COO of Viacom at the time) and Google’s Eric Schmidt, Sergey Brin and Larry Page.

Karmazan was incredulous that Google was creating such a highly measurable system that would starve the media planning and buying process of all creativity and emotion. “You’re fucking with the magic,” he said only half in jest according to Auletta.

There is no doubt that the media buying and planning industry needs to become more accountable and measurable, but not at the expense of it’s creative, emotive, entreprenurial and risk-taking nature.

The industry always has to have a place for people who can come up with ideas like this:

Daffy's Live Movie Theatre Ad: During selected evening showing of "Amelia" at the massive Zigfield Theatre in Manhattan, 10 live dancers took to the stage accompanied by music and images on the screen behind them and performed a 3-minute ad for Daffy's.

Thursday, October 15, 2009

Google Needs A Local Sales Partner

One of the initially compelling synergies of the AOL-Time Warner merger was to use Time Warner Cable’s 1500-person local ad sales organization to sell geo-targeted AOL ad placements to their local clients.

The idea made a lot of sense. Local cable advertising was becoming a force to be reckoned with, quickly building share at the expense of newspapers, radio and broadcast TV. The typical cable system at the time was inserting advertising on 50 or more national cable networks creating an environment where sales executives were comfortable packaging and selling a broad collection of properties. Local advertisers wanted to better understand emerging online marketing opportunities and AOL was the biggest player.

Unfortunately, as it is well known now, AOL had very little ad sales infrastructure at the time. Cracks started appearing on the national side and there was very little attention left for local. The project was disbanded just a year or so after being introduced in 20 markets.

Time Warner Cable quickly built their own digital offering, an automotive dealer listings service called BeepBeep.com that today is an important revenue driver for the company and a key source of differentiation from the other local traditional media outlets.

Comcast, with a sales organization twice the size of TW Cable’s, has had similar success with their own automotive offering, Vehix.com.

At both companies, the local ad sales executives, most steeped in the world of 30- second commercials and other traditional media formats, were quick to embrace a new media platform that enhanced their business opportunities and professional development.

More importantly, both initiatives showed how large local traditional media ad sales organizations could leverage their relationships and coverage to introduce new digital media offerings.

The largest radio, newspaper, yellow pages and local broadcast companies all have massive local sales organizations supporting core products that are in decline. Look for them to start aggressively adding new digital offering to their portfolio just like Clear Channel’s recently announced ad sales partnership with Pandora.

Earlier this week it was reported that Google has its sights set on the local market with a new fee-based search model that dramatically simplifies search advertising for local businesses. (Most local advertisers have been reluctant to engage in Google's traditional bidding and optimization process.)

Gordon Borrell, an infuential local media researcher, was quick to note that infiltrating the local market will not be easy for Google. As he said in Paid Content, “Local media is sold, not bought.”

Will Google go it alone or partner with a big traditional media company?

Friday, October 2, 2009

All Companies Are Now Media Companies

PR firm Edelman Communications recently released a white paper summarizing key insights from a social media summit they hosted in Washington DC a few months ago.

The summit was attended by some impressive players including marketing heads from some of the biggest companies and the Chief Technology Officer for Obama’s presidential campaign. 

One key take-away: the importance of all companies to now see themselves as media companies.

“Companies no longer have to filter their content and messages through the media; they have the means to create and distribute their own content – and potentially to advance their own reputations – through the channels they choose.”

It seems every day we see another noteworthy example of this - most still representing a small part of the company’s total marketing commitment, but still, a clear indication of a new order.

  • Whole Foods has one of the largest followings on Twitter (1.5 million followers) - more than almost every mainstream media brand and personality.
  • The Pringles fan page on Facebook, one of the most popular based on fans (2.8 million) and time spent, has quickly become a multi-media social networking hub featuring photos, videos, comments, games and contests.
  • Johnson and Johnson’s BabyCenter.com is now the largest parenting site in the world.
  • Hasbro recently purchased a 50% stake in a new children’s cable network being launched by Discovery Communications.
Ironically, most of the summer was spent focusing on the upfronts – an outdated marketplace where billions are spent by leading advertisers to air 30-second commercials in programming produced by others that appears on networks owned by others.

And while many of the brands still see tremendous value in the reach and impact provided by the big media companies, look for them to more aggressively launch their own content and distribution networks, often using the established media outlets as partners in these efforts.

Wednesday, September 23, 2009

Moving Fast, Testing and Being Clever

I was just reminiscing with a friend about a technology platform we developed 10 years ago called Streetbeam.  If you lived in NY, San Francisco, or London at the time, there is a good chance you saw one of Streebeam’s “beaming” outdoor media displays. Phone Kiosks, Bus Shelters and Subway signs were deployed with infrared hardware that enabled consumers to point their Palm Pilots (the hot mobile device at the time) at an advertisement and get more information downloaded on the spot.

There is actually a short flash movie showing the technology in action still posted on a random web site.  The clip was shown at an ADWEEK awards ceremony.

Viacom Outdoor (now CBS Outdoor), one of the largest outdoor media companies in the world, invested in the business and provided distribution. They recognized that emerging technologies could make their static media assets interactive and provide greater value to advertisers.

Streetbeam was an immediate hit. Banana Republic, Warner Bros, HSBC and American Express were among the A-list marketers that developed campaigns, using the technology to offer consumers the opportunity to download everything from coupons, store locations, and games. Simon and Schuster, for the release of a new Stephen King book, offered a sneak peak at one of the stories. Stuart Elliot wrote about the campaign in The New York Times.

Some applications were more popular than others, but in every instance, a forward thinking marketer pulled their creative and media team together and identified a compelling way to extend their brand into this new media stream (or beam.)

The budgets were small, as was the media reach, but it taught marketers how important it was to be able to react quickly to new technologies and media platforms and test them out.

Although infrared technology quickly ran its course in mobile devices, (I do miss the famous Palm Pilot digital “hand shake” used to exchange contact info.), Streetbeam helped usher in many new interactive forms of out-of-home media.

We see the same responsiveness from many marketers today as they develop applications for the iPhone. The best of the lot are just plain clever and imaginatively deliver user value and sales opportunities.

My favorite is the Ben Color Capture App from Benjamin Moore. Take a picture of anything and it identifies a Benjamin Moore paint color to match. Using the iPhone's GPS it then locates the nearest Benjamin Moore retailer.  You can see a demo here.

Why do some media companies and marketers seem to move so much quicker than others?

Tuesday, September 15, 2009

TV Everywhere Takes On New Meaning

We have gotten used to seeing TV screens just about everywhere - taxis, airplanes, airports, sides of buildings, stores, gas stations, elevators, etc. Seems the media industry has been on a tireless mission (“No Screen Left Behind?”) to place screens in so many places that we are never more than just a few feet away from our next video exposure.

Considering the amount of video we already view on our computers and phones, is it now possible, with an extraordinarily well crafted media plan, for an advertiser to reach someone every step of their way throughout the day? In essence, follow them?

Here is a list of places, in chronological order, where a video screen flashed an ad message at me during a 5-hour journey from my office in NYC to a hotel room in Detroit:

Office computer
Billboard on Long Island Expressway
LaGuardia Airport Gate
Detroit Airport Gate
Hotel Lobby
Hotel Room

Certainly a big job to research, plan and buy all these media outlets, but not very difficult.

Coming home from my trip I arrived at LaGuardia and hopped in one of the few cabs in NYC without a video screen. I enjoyed a few video-free moments until I noticed something floating high above the nearby National Tennis Center where the US Open Tennis Championships were in full swing. Hanging from the side of the DIRECTV blimp and filling the night sky with TV programming and ad messages was the largest HD TV screen in the world.

An influential media executive once said that "the future belongs to those brands who are able to travel wherever the consumer is moving."

Tuesday, September 8, 2009

The Direct Response/Brand Advertisting Connection

MTV received a fair amount of press last month from a study they commissioned to identify the most effective ad format for short form online video. The 5-second pre-roll combined with a 10-second lower third overlay was officially declared not only most effective, but most consumer-friendly as well.

Reading about the study, I immediately recalled a terrific guest column in Online Media Daily titled “Beyond Advertising, A Strategic Path to the Digital Consumer.”  The columnists, both partners at IBM Global Business Services, argue that every contact an advertiser makes with a consumer in a digital environment should impact the brand as well as drive an action - direct response and brand advertising should always be wrapped together.

“Traditional boundaries are fading, creating opportunities for innovative business models for content platforms. Thus advertisers that previously focused on delivering either ROI-driven marketing or brand-oriented advertising can cater to both sets of objectives. The result is what we call "brands-actional" advertising.”

What better way to accomplish this than an online video campaign with a brand oriented pre-roll and a follow up call to action in the overlay?

As online video providers frantically look for ways to effectively monetize their fast-growing traffic and finally move closer to some industry standards, it appears they could find themselves center stage for a new ad model that is embraced by the industry and fundamentally changes outdated marketing practices.

Marketers and their agencies need to move quickly to seamlessly connect their traditional/digital and brand/direct response efforts. Surprisingly most agencies still do not create a short, pre-roll version of their standard 30-second TV commercials.

And shouldn’t overlays and other call-to-action ad units (hot spotting, post roll, etc) be part of a unified and integrated TV creative and media plan? After all, TV and online video viewing are coalescing.

Seems this is just one more example of the immediate need for marketers to centralize multiple disciplines that still often exist in different silos and often different agencies. At the recent Chicago Ad Tech Conference many of the CMOs in attendance were outspoken in their preference for bundled, do-it-all approaches.

Monday, August 24, 2009

The Most Powerful Media Entity on the Planet?

We all have our Facebook stories; here is mine:

Just about 3 months ago I was "friended" by a former classmate from my elementary school days in the mid-70s. It was the first such social media connection from this chapter of my life and brought back a flood of memories. Within a few weeks 7 or 8 more classmates connected, one posting a picture of our class from the fourth grade that I am sure I haven’t seen since I was in the fifth grade. Within a couple of months, the group had grown to over 40, many participating in conversation threads about ferocious nuns and a planned reunion this coming September.

Many of us have similar personal stories about the stunning connectivity power of Facebook and other social networks. Some media experts claim Facebook is the most powerful media entity on the planet and will only continue to grow in reach and influence.

A compelling video titled “Social Media Revolution” started making the rounds last week: http://bit.ly/RTzPe. It opens with a bold question that might have seemed far-fetched a few years ago but not today: “Is Social Media a fad or the biggest shift since the Industrial Revolution.”

The video then goes on the present a list of eye-popping data points that support a social and media phenomenon if not a revolution. One example:

Years to reach 50 million users:

Radio - 38 Years
TV -13 Years
Internet - 4 Years
iPod -3 Years
Facebook - Added 100 million users in less than 9 months

So, the multi billion dollar question: How can Facebook and others monetize this extraordinary usage and why are there still questions about their ability to do so?

There is no doubt that advertising is more effective accompanying search results than in social media environments, but there still must be significant value and a considerable measure of effectiveness in placing an ad message along side a stream of 47-year-olds reminiscing and interacting with each other.

And what other ways can Facebook monetize all the data revealed by their 250 million users? Just the other day they announced plans to move aggressively into e-commerce including physical goods from third-party companies. Imagine 1-800-Flowers targeting friends of people who have a birthday coming up. (Most Facebook members include their birthday in their profile.)

The monetization opportunities seem endless when you consider Facebook’s reach and depth of connectivity. I keep waiting to see a local party planning company's ad to show up on the pages of my elementary school classsmates.

Monday, August 10, 2009

Newspapers Can Still Deliver

This reprint of a famous New York Times headline story dropped out of my home-delivered paper over 3 weeks ago, providing immediate delight to my entire family. It has been sitting on our living room coffee table ever since, often picked up and browsed by visiting friends.

The reprint is sponsored by Louis Vuitton and their latest “journeys” ad celebrating the “greatest journey of all” occupies the entire back page. This particular ad placement was a keypart of a broader association with the 50th anniversary of the moon landing.

It’s been discussed ad nauseam how difficult it has become for advertisers to stand out and effectively reach and influence their target audience. Here we have one of the oldest media properties in the country, the flagship of a media category deemed by most to be on it’s last legs, delivering a truly compelling offering that serves ongoing value to itself, its readers and a large advertising partner.

A recent forecast by Borell Associates actually shows newspaper ad revenue rebounding next year. http://bit.ly/14D5zd The forecast points to better and more innovative ad selling.

Tuesday, August 4, 2009

The Power of Traditional Advertising, Part One

With marketing budgets inexorably moving to all things digital and the teams that manage them barely able to keep up with the pace of change, sometimes the most effective advertising relies on the oldest forms of media.

Advertisers have been painting their messages on the sides of buildings in NYC for over 200 years. One of the largest such ads covers the entire side of a 30+ story building on 23rd street and Park Avenue. Warner Bros has had the exclusive rights for many years and uses it to promote new film releases. Every few weeks, a new image is hand-painted over the previous one. The process and the subsequent showing is seen by hundreds of thousand of people walking and driving north on Park Avenue.

What makes the ad so effective is the sheer size, but also the painting process that creates a near photographic image. Most importantly, it is also the only building-size, outdoor ad in this part of Manhattan giving it a particularly impactful placement in the urban landscape.

New zoning laws make it unlikely any new ads will appear nearby. (During the past 15-10 years, NYC somehow lost control of the outdoor ad business resulting in complete overload in certain commercial areas like Times Square and the Queens side of the Midtown Tunnel. They have made a 180 degree turn and are now aggressively regulating.)

This dramatic recurring ad in a relatively ad-free environment gives Warner Bros a unique marketing franchise on one of the oldest ad platforms, a platform that does not appear to be weakened by the digital revolution.

Monday, July 27, 2009

Online Video Advertising: Finally Getting Some Respect?

After years of confusion and endless trial and error, it seems the media industry is finally figuring out how to more effectively monetize online video with advertising. And while online video viewing is still miniscule compared to TV viewing, effective ad formats that provide reasonable revenue streams to content providers and do not aggravate viewers will open a flood gate of great content.

The pre-roll has gone from pariah to relative acceptance thanks to shorter, more entertaining units and better targeting. Simple tools like countdown clocks that tell you how many seconds to the start of the actual video also make the pre-roll more tolerable. CNN uses this tool quite effectively.

Although the consumer refrain “I don’t notice the ads” seems more relevant than ever, it’s hard to argue the effectiveness of a single ad, playing 12” from your face while you wait for a piece of content you requested. (All the more so with the audio track being pumped through your earphones.)

Traditional 30-second ad units also work well in a longer form premium content environments like Hulu. But the ad load is far smaller than on the corresponding TV airing. – one unit per break, representing ¼ of the TV commercial time. Hulu’s plan is to charge more for the ads based on performance.

It will be interesting to see the results of Comcast’s highly publicized new Web-TV trial which will include significantly more ad time than Hulu. It will foster some meaty discussions between advertisers and networks on the market value of a low clutter environment.

Overlays are also finding their place and seem to work best in informational content. At driverTV, we are seeing 3% and higher click-through-rates for the lower screen overlays accompanying our new car video overviews. You can see a sample here: http://autos.aol.com/cars-Toyota-Camry-2009/videos

The other truly compelling aspect of all online video advertising is the additional ad messages that can live outside the video player and reinforce the in-video messaging

All in all, it seems like a recipe for growth: great content along with advertising you can’t skip or ignore.

Monday, July 20, 2009

Does Free Lead to Paid?

There is an interesting debate swirling around media industry blogs in response to the following question:

Does it make sense (and lead to long term profitability) to invest tens of millions of dollars in a new media platform, give it away free for years, build a big following and then figure out how to make money?

I think it is fair to say that the jury is still out on the 3 highest profile examples of this model – Facebook, Twitter and YouTube. All have massive followings, have become iconic brands and yet are losing significant sums of money every month.

Advertising seems to be the best way for these companies to monetize such enormous reach, but initial response from the ad industry has been circumspect as they question the impact and acceptance of ads in social media and user-generated content environments.

Another compelling option is to charge consumers and/or companies for some customized and/or premium use of the service. I guess at the end of the day, this model depends on how valuable the service really is to its users.

A year ago I started using Pandora – the free online music service. It would be an understatement to say that I am completely hooked - 95% of the music played in my home is streamed through the Pandora iPod app.

The company recently announced that free listening will be limited to 40 hours per month, but can be extended to unlimited for that month for 99 cents. Seems they will also be focusing more aggressively on advertising. Advertising around songs is a long-proven model. (They also have a premium version of the service that is ad free.)

As I provide my credit card info to Pandora, I guess free does lead to paid in this sample of one.

Friday, July 10, 2009

The Importance of Influencers

Spent some time this week with some ad agency execs chatting about the challenges of building an audience for branded video content on the web. One told me about a piece of humorous content they created for a major package goods company. They posted it on all the usual outlets – YouTube, Facebook, MySpace. It languished until a popular YouTube vlogger praised it. Views spiked from 10,000 to 250,000 in a week.

There is a distinct hierarchy in the social media system and at the top are the people with the ability to influence the stream of conversation. 360i just published a social marketing playbook http://www.360i.com/pdf/360i-Social-Marketing-Playbook.pdf and in it illuminates this hierarchy, describing 6 levels of participation:


The Creators and Critics share the top, are mutually dependent on one another and often exchange roles. For example, a popular blogger or vlogger might be all about identifying interesting content that they praise and send off on a viral run.

Now more than ever, you need friends in the right places.

Monday, July 6, 2009

Online Video Misperceptions

I have been looking at some recent research regarding online video consumption. Yes it is growing explosively (+40% year over year.) But it is definitely following the laws of “if you have a little and it grows a lot, you still probably have a little.” It’s like when your favorite stock goes up 50% in one day, from $1.00 to $1.50. Sounds big, but in the scheme of things, not really.

When I asked a sampling of friends here in NYC what percent of their total video viewing is online versus TV, responses ranged from 15% - 50%. (I am leaving mobile out of this discussion for now.) Seems my sample was skewed towards early adopters or the results reflect the enormous inaccuracies of memory based data.

The actual number, across the entire population – 1%!

This from a recent well documented study by a big name research organization. Another study showed online’s share at 2%. Like that micro cap stock, even 50% year over year growth doesn’t have that big an impact.

98% of video consumption is still happening in front of the television. Looking at another way - the average American watches nearly 160 hours per month of TV and just over 3 hours of Internet video.

No wonder the television upfronts seem relatively healthy with broadcasters and particularly their stronger cable network siblings feeling upbeat.

Is there a huge disruption lurking?

I think so. Everyone online is watching video. (80% of web users according to the latest data) They are just taking lot of small bites – 3 minute clips of Sarah Boyle, or a 2 minute news segment from Iran, or a user generated clip emailed from a friend.

It just doesn’t add up to whole lot of time and most of what is being viewed is still user-generated with poor production values.

A few things need to happen to significantly move the needle. First, more professionally produced (30 Rock, Heroes, etc) and semi- professionally produced (Next New Networks, My Damn Channel) content needs to find a home and an audience on the web. (Hulu, for all its success and publicity still only generates a fraction of the total online video viewing.)

Second, viewers need to begin looking at their computer as more of an entertainment viewing device and hub – watching in full screen format (as opposed to a 300X250 pixel window) and connecting to their home TVs using new applications like Boxee and the Hulu desktop.

If online viewing is 2% now, where will be in 12 months?