The online video market will grow by more than 70 percent per annum, according to Forrester Research. Yet many people are still questioning how online video will ultimately be monetized.
Advertising is the natural answer. We all agree that repurposing 30-second TV commercials for the web is not the ticket to online video monetization; however, there still isn't a consensus as to what will succeed. Thus far, much of the debate about online video advertising has centered on ad formats.
Marketers wonder which ad format -- pre-roll, mid-roll, post-roll, overlay or something else -- will be the driver for successful online video ad monetization. But is that even the right question to ask?
Let's hold that question while we take a step back to a look at the video discovery process. When I search on a search engine, I am usually looking for textual information. But when I search for videos, I am seeking out some sort of experience; that is the nature of engagement with video. The sort of experience I am seeking will be a good indicator of the types of ads to which I will be receptive -- much in the same way that the search terms I type in my search query box are a good indication of the sponsored listings to which I will be receptive.
With search, the results presented are based on page rank and the latest algorithm modification being implemented by the search engine. Although search engine results are influenced by user behavior, results are not generated predominantly by user behavior. On the other hand, with online video discovery, the results presented are based on the behavior of others who previously queried similar terms in the video discovery engine.
Perhaps the most telling difference between informational search and experiential discovery can be found on music discovery site Pandora. For every song that is recommended, I have the option to tell Pandora's technology engine whether or not I liked the song. It is this user analysis engine, which is continuously refined based on the collective user experience and behavior of all of Pandora's users, that determines which songs are served. I believe Pandora's solution has served as the catalyst for other discovery solutions while helping to define the difference between search and discovery.
Based on Pandora's model and other discovery solutions driven by user experience, it is clear that user behavior will shape how we discover video content online. Therefore, I believe that it is only logical that, as today's behavioral targeting processes progress, they will overlap the user's discovery behavior and thus play a significant role in online video ad monetization -- regardless of which video formats ultimately dominate the market.
So how can marketers take advantage of this opportunity? Based on my viewing experience, I'm not sure that many -- if any -- video publishers are using behavioral targeting yet, but it's only a matter of time. But marketers shouldn't wait for behavioral targeting to be implemented in video discovery. They should already be creating video ads that can serve as content to users in order to improve the targeting -- and ultimately, the effectiveness -- of their video advertising. This means:
- Creating videos that are great content, and not self-serving ads.
- Creating videos that are tied to user behaviors. For a sporting goods manufacturer, this might mean creating a daily sports highlights video with the marketers' a logo and message at the end, or perhaps a Q&A video session with a leading athlete. A consumer packaged goods manufacturer could create a web series in which product usage is woven into the plot. A daily 3-minute video showing users how to make specific recipes could be effective for a food manufacturer. Ideally, marketers targeting multiple demographic and ethnic marketing segments might want to consider creating multiple videos that would appeal to each segment.
- Creating videos that are relevant to the user's experience. For runners, a Q&A session in which a professional runner discusses exercises that can be done in-home during a cold and snowy winter day would resonate with viewers, even if the marketer's logo only appears in the final frame of the video. If the videos aren't relevant, they are less likely to be recommended by the video recommendation solution and are, therefore, less likely to be viewed.
Personally, I believe that the pre- versus mid- versus post-roll debate should come to an end. The winning video ad format will be great, relevant and engaging video content.
As for video publishers, video advertising based on great, relevant and engaging content and powered by behavioral targeting data will create more finely targeted triggers that enable publishers to better target such videos. And better targeting will enable video publishers to charge higher rates. This will help solve the video monetization problems currently being experienced by all online video publishers.
Meir (Iri) Zohar is the CEO and founder of eXelate.
