EyeView's Blog

Online Video Still On The Rise

It’s that time of the month again. The comScore Video Metrix service has released the data for online video for August 2009. For yet another month all records have been broken as US Internet users continue to tune in and watch video online.

The breakdown goes like this: In the US alone in the month of August people watched over 25 billion videos online. Of this number around 40 percent were watched on Google sites. That percentage represents around 10 billion videos of which 99 percent were viewed on YouTube. You can expect a big announcement soon when YouTube alone accounts for over 10 billion videos in a calendar month.

Coming a long way behind that lion’s share of the market was Microsoft, Viacom and Hulu, each with around 2 percent of all videos consumed.

The highlights of comScores report show that over 80 percent of US internet users watched online video in August, with the average online video viewer consuming 9.7 hours of video over the month. Compared to TV consumption, these numbers are still modest, but I still wonder how long they can continue to rise.

As far as ad serving goes to the 161 million unique video viewers in the US, the largest network, Tremor Media, only reaches 40 percent of the potential audience. So even if the penetration of online video levels out in the coming months, the potential for ad revenue still has quite a way to catch up.

Favorite Headline Of The Week

Sometimes something just tickles you in such a way that you feel you have to share with everyone. I checked my news feeds as normal this morning and stumbled across an article heading which made me stop… look again… and… instantly want to read more.

The headline read: Rossellini Ponders How To Make Online Video Pay

Rossellini is, of course, Isabella Rossellini. Isabella Rossellini – one of the most beautiful women in the world. Isabella Rossellini who was in Blue Velvet. Isabella Rossellini, the daughter of Ingrid Bergman. Isabella Rossellini who was once married to Martin Scorsese and later engaged to David Lynch. Isabella Rossellini who played Sydney’s crazy aunt in Alias, Jack’s ex-wife on 30 Rock and just missed being on Ross’s laminated list on Friends.

That Isabella Rossellini.

Isabella Rosellini is thinking about how to make money out of online video. To give this some context, Ms. Rossellini has written, produced and directed a series of internet shorts called Green Porno all about how animals have sex. Now that she’s into to season three, she’s starting to think of ways to earn back the money she has spent.

Isabella Rossellini is wondering how to get a return on her investment in online video. For perhaps the first and only time ever, Isabella Rossellini and I are thinking about the same thing.

Now, if Isabella Rossellini is thinking about building ROI into your online video spend and I am thinking about how online video should be part of your conversion strategy in order to boost revenue, maybe you should start thinking about it too.

Adobe and Omniture – Visions of the Future?

Today, I'm delighted to host a guest post by the CEO of EyeView, Oren Harnevo. Don't be shy about letting him know what you think. You can also follow him on Twitter @ohnevo. Take it away, Oren:

Last week Adobe declared that it will acquire Omniture for $1.8 billion. While some might not understand this bold move by Adobe, for me it makes a lot of sense. Adobe is entering the online market and is starting to use its elbows against companies like Microsoft, Yahoo and Google. I think the future for OmnAdobe or AdobNiture is bright and here’s why.

It might not be what Adobe wants from Omniture but this is my vision of the future of OmnAdobe!

I see a future in which advertisers turn to agencies no longer for content, but for effective content. What do I mean by “effective content”? Content whose impact can be assessed, measured, optimized and which can deliver ROI. Advertisers want to pay for results, not for mere content, and that is exactly what a company with a range of content-creation products wants with an analytics company – content with results.

Today, the creation of online content is all about experience and aesthetic. The flash application developer and creative designer believe they know what to create and do the best they can. But what if we had a way, to measure how good their work really is? What if we could put a price tag on one designer’s work against another’s? What if we could show that one flash application averages 40 seconds of use and another application maintains its hold on users for more than a minute? We could actually measure which designer was more successful.

This is not so much a vision of the future as a reflection of our normal working day at EyeView - effective content, constantly measured and optimized to provide real ROI.

Imagine this (names are strictly fictitious):

1. Niky, a fictitious online retailer of socks, wants a new flash application that allows its users to see and play with different sock options before purchase. They believe it will boost sales.
2. Niky finds Ogilby, an online, performance-based content creator which does more than just creating content - Ogilby also promises effective content and ties payment to success.
3. Niky loves the Ogilby pitch and decides to sign. Why pay for regular content when someone is offering measurable content?
4. The design team at Ogilby open their Adobe applications, create some killer content and click the “Insert Analytics” button in the toolbar.
5. Niky now log into their OmnAdobe (or AdobNiture) analytics platform and watch how the content performs, how it impacts their traffic, their sales and their users.
6. It turns out that Ogilby improved engagement with the website by 30%. Ogilby earns a bonus for their work.

Sounds great, doesn’t it? It may still take a while for Adobe and Omniture to reach such lofty heights. These companies are different on so many levels that it would another five posts to describe. Adobe is a Software as a Product (SaaP) company while Omniture is a Software as a Service (SaaS) company with subscription-guaranteed revenue. Omniture usually sells to the very high end of the market while Adobe sells to all segments. Omniture is mostly US while Adobe is worldwide. There will be many challenges for them to face together before they provide the end-to-end solution that bundles content and analytics into the perfect package.

When content is measurable and advertisers demand this accountability from their agencies, Adobe may be the only provider in the market to meet that demand. When that happens, people may take another look at this acquisition and reconsider its value.

You Don't Need 300 Million Users To Make Money (... But It Helps!)

First of all, congratulations to young Mr. Zuckerberg and the rest of the team at Facebook. According to his blog post yesterday, the site now has over 300 million users. This is a remarkable feat by any standard and places Facebook firmly in the pantheon of internet gods. Given that the announcement about reaching 250 million users only came in July, we can see that Facebook continues to experience remarkable growth as it becomes an essential part of many people’s lives.

Perhaps even more importantly for Mr. Zuckerberg, he was able to announce that Facebook had finally become “cashflow positive”. An interesting choice of words that is open to interpretation as Alan Patrick of Broadsight amusingly points out on his blog. At least one thing is clear and that is whatever interpretation of “cashflow positive” Facebook uses for this past quarter, it is not likely to have made much of dent in the $700 million that has already been invested in the site.

So, if it takes one of the world’s most popular sites five years, 300 million users and $700 million of investment to make money, what hope is there for the rest of us? Plenty. And the reason is this. You don’t need 300 million users to make money. What you do need is a clear conversion strategy for the users or visitors you do have.

Facebook has built its user base with fantastic word of mouth and viral expansion through every demographic. The rest of us are using a combination of PPC, SEO and other SEM tactics to generate traffic to our properties. But even without a viral tsunami we can all still do more to optimize the value of the traffic we generate for our sites.

You may even find that your real online business is not an ad-supported behemoth like Facebook, but a lean and keen revenue-generating machine with a real product and an open and defined strategy for turning your visitors into purchasers or subscribers or downloaders. Facebook needed 300 million visitors in order to start making money. My bet is that you can achieve the same goal with far fewer.

Online Video Will Not Save Advertising

There is a lot of speculation as to why advertising dollars have failed to follow eyeballs into online video. Tania Yuki over at comScore offered her two cents last week on this thought-provoking conundrum.

Yuki describes online video as a party crasher knocking on the door of Big Advertising with a bunch of unruly (and unsavoury) friends expecting to be welcomed into the fold and recognized as one of the guys. As Yuki describes it -- brand advertisers responded blankly and fairly, “who are you and what are you doing here?”

Yuki goes on to talk about the disconnect between agencies and content producers contributing to the lack of enthusiasm on the agencies’ part for online video.

I would take this even further and suggest that disconnect is between old-fashioned outbound marketing and the strength and importance of inbound marketing. Agencies are still trying to use video outside of a brand’s site to drive interest and build recognition for that brand. It’s the old problem of putting ads for cat food on TV when you know that only one in three households owns a cat. Most of the time you are trying to sell something to someone who will never need it.

The new reality is that everyone currently spending money on video is already spending more money on generating traffic for their property. By using video to attract business they are competing with their existing spend and, most of the time, wasting their energy.

I believe the future for online video is worlds away from the current advertising model. Following the principles of inbound marketing, an effective online video on your landing page will complement rather than cannibalize your SEO spend and be viewed by people who have already chosen to visit your site to learn more.

In other words, rather than trying to sell cat food to dog lovers, you first go out and attract the attention of cat owners and when they find you, you can tell them why your cat food tastes best.

Online Video Up. Ad Revenue... Not So Much.

Recent figures released by comScore show that even in the traditionally slow, summer month of July, audience figures for online video are still outperforming expectations. According to the report, more than 158 million US internet users watched online video during the month. This is the largest figure recorded so it comes as no surprise that the number of videos watched, 21.4 billion, was also an all-time record.

Over 40 percent of videos are watched on what comScore euphemistically calls “Google sites”. While that figure is more than 10 times the size of its nearest competitor, it still means that 60 percent of online video is being watched in places other than YouTube.

With US video viewers watching an average of 135 videos each in the month of July, there is no further proof needed that online video watching is as mainstream for internet users as reading email or checking last night’s sports scores.

Interestingly, the most wide-reaching ad network has a potential reach of only half the online video viewing audience with no ad network actually delivering more than 20 percent of that audience. This implies that the overwhelming majority of online video viewers is watching without the interruption of ads and will probably expect this to continue.

While the world of video as entertainment, which is reliant on ad revenue, may be concerned by this slow-to-improve statistic, companies that are using video for branding, exposure, SEO and conversion have less to be worried about.

New Online Video Provider Comparison Site

I was excited to be contacted this week by Kris Drey. During daylight, Kris is VP of Product Marketing over at Fliqz, a video hosting service. But late at night, when the moon is full, Kris is launching a new site called VidCompare.com. According to the homepage VidCompare is “a free comparison service for business decision makers looking for an Online Video Platform Provider”.

Although the site is still officially in Beta, Kris and his partner, Alex Polonsky have done a great job reaching out to different sites and creating a directory of companies working with online video at varying levels. Each entry gives a brief outline of the site’s offering and a breakdown of the different services. You can see information about the company’s target market and pricing models as well as a sample video to give you a taste of their player. It’s easy to filter your search and distinguish between white-label players and full-service production houses.

Satisfied users can come back to the site and add a review of the companies they’ve worked with. It’s not a new model, but it’s already proven its effectiveness in other markets.

Whether you’re in marketing for a huge multi-national or a one-person start-up looking to include some video on your new site, VidCompare takes the headache out of researching a bunch of companies to find the best fit.

From my perspective as a vendor, the arrival of VidCompare is a validation of the online video market as a healthily competitive place. We know more and more business are looking to incorporate online video on their sites and presenting the range of possibilities in an accessible way increases visibility and adds transparency to this search.

It’s too early to know how much value the site can provide to vendors in terms of leads, but I’m sure customers will welcome the chance to compare their options and that will ultimately provide benefit to everyone.

So far, it looks great and I will update as the site grows.