July 2006 - Technology Talk

Of Plastic and Video

By Paul Soltoff

Those of you old enough to remember the movie, The Graduate, will surely recall the single word uttered to Dustin Hoffman as a major opportunity for the future: plastics. If that movie were remade today, the gospel would be: media…and more specifically, personal media.

While the worlds of TV and the Internet have been bumping up against each other in recent years, we are now witnessing the first wave of real integration between the two-one that will rapidly change the landscape. Someday in the next few years or so, the lines between traditional TV and online TV and archived TV will be nearly indistinguishable. This is of critical importance to electronic marketers and DRTV advertisers in particular.

Look what’s happened to our personal consumption of media over the last decade:

  • We’re now online more than all other forms of media consumption except for TV, and online should surpass TV soon. We spend more time online than reading newspapers, magazines, books, video games, listening to radio and viewing movies. According to Jupiter Research, that’s about two hours a day we spend online.
  • The Center for Media Design at Ball State University reports that we spend 30 percent of our waking hours (that’s about five hours) consuming media.
  • The amount of time we spend watching TV and listening to radio has been declining steadily, while online time has increased. BURST! Media reports 35.5 percent of consumers watch less TV and 27.1 percent listen to the radio less.
  • We’re combining media consumption as never before. We spend 18.5 minutes a day watching TV and on the web simultaneously (see chart).

And we’re entering the age of content being delivered via cell phones and PDAs. It’s just astounding!

So, without a doubt, all of the elements for this next wave are in place:

  • Broadband penetration is sufficient that there are plenty of eyeballs that can view streaming video online.
  • Video content is more widely available, whether it be movie and news clips, day-after shows or even commercials.
  • The infrastructure to serve video in all forms and formats keeps getting better and better.

In fact, Internet video ad spending in the U.S. is projected to grow from $30 million just a few years ago to $1.5 billion by 2009, according OMMA magazine’s April 2006 issue.

All that needs to be seen is what companies will emerge as the gatekeepers (companies that control the content and technology) and market makers (companies that package everything together, making it easy for advertisers to purchase online video commercials) for online video advertising. There are hurdles to overcome-such as video ad formats and ratings analysis-but they will be dealt in short order, because there’s plenty of money to be made from serving video commercials online.

Here’s a look into what’s here and what’s coming down the pike so that when you are thinking about both the short and long term, you can start integrating video into your future marketing plans. Highlights include:

You can now run your DRTV commercials on major portals. MSN has taken a leadership role with msnvideo.com. MSN’s entry is the largest video-only streaming service on the ‘Net, with 41 channels of content that is updated multiple times throughout the day, plus live events. Over 9 million unique users visit msnvideo.com each month. Still in its infancy, over 50 advertisers are using it. It’s free to consumers in the U.S., Canada and Japan.

You can easily add your one-minute spot, or strip out parts of an infomercial and add them to your web site to enhance response. We’ve been doing that for years, and it works.

You can take the next step and create an interactive site involving video and other rich media applications. This involves the viewer rather than simply playing a commercial. Since no one is really doing this, here’s how I envision it working:

  • A consumer visits the advertiser’s web site and fills out a form or participates in a survey, sweepstakes or poll.
  • Based on the responses, short video clips are shown. For example, if the site sells insurance and visitor #1 is 50 years old and visitor #2 is 25, each get video with images appropriate to his or her age group.
  • Using cookies to track users’ experience moving around the site, marketers learn their interests and present video to drive home key points and as a call to action (CTA).
  • Consumers who see the short spots can link to longer video content to learn more.
  • Upon arrival at a sight, based on an IP address and/or cookies, specific video can be shown, targeted to a consumer’s interests or geo location.
  • Also upon arrival, based on the link from a search engine, a video can be shown that addresses visitors’ keyword search.

Sometime in the future, you will be able to run spots on what I’d call a “video ad network” in the same way you can now run banners on any number of networks. Sites in this network would display video ads in the same way they now display banners, served by ad network companies, or by new companies that spring up for this very purpose.

Questions that you need to ask yourself when thinking about these options are:

  • Do I simply take my existing spot and run it as an online video commercial? One critical factor affecting this question is size: Will a spot running in a 2-inch box be as effective as one running on a 27-inch TV?
  • Do I run the entire spot as is or snip out portions of it? You’ll undoubtedly need to test 30 seconds vs. 60 seconds online to see if shorter spots work better than longer spots.
  • How do I distill messages into shorter lengths since many of the streaming portals are only offering 30-second and at the most 60-second formats?
  • Unlike intrusive media, the Internet provides interactive capability, so ask yourself how to empower the CTA to do more than just call the consumer to respond.

While this may be obvious, it’s worth emphasizing. Traditional TV is a one-way medium, with commercials that interrupt programming and are designed to arrest the consumer and either send a branding message or motivate them to call an 800 number or go to a web site in the case of DRTV.

Internet TV, on the other hand, changes TV from one-way to two-way, giving advertisers the ability to create interactive advertising, where the viewer actually participates in the ad and will go down different pathways based on responses. This is truly exciting!

So now that you know what the future holds, how will you start researching, planning and implementing video? The prophecy of “plastic” in 1967 when The Graduate was released certainly came true. The prophecy of “video” is happening right before your eyes. Don’t let it pass you by.

What’s Hot and What’s Not in Media Consumption
Gaining share
Losing share
TiVo’ed TV
Simultaneous offline and online media consumption
Mobile media
Video & Online games
Mass TV
Yellow pages
Classified ads

Paul Soltoff is chairman and CEO of SendTec, a direct marketing company based in St. Petersburg, Fla. You can reach him at (727) 576-6630, or via e-mail at [email protected].


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