Direct Response Online Video

By Paul Soltoff

Video on the web is exploding everywhere, and it may represent a new opportunity for marketers currently using DRTV. This next paradigm shift, following on the heels of the web itself, e-mail and search, closes the gap between the traditional TV screen and your PC monitor. There’s a lot to learn and understand about making the right decisions in this new and emerging media.

INDUSTRY INSIGHTS
Following are some interesting industry tidbits:

• Many networks are making programming available online, either free or at a cost. So if you miss “Lost,” you have the opportunity to watch it on your PC within a couple of days-free on ABC’s site or for $1.99 elsewhere. TV Guide publishes a directory called Downloads.
• Many of the big players are heavily involved in online video, including MSN, Google Video, AOL’s In2TV, Apple’s iTunes Store and others.
• Klipmart (www.klipmart.com) claims to be able to deliver seamless video to 98 percent of Internet users, and other startup networks, such as Interep’s Interactive Video Network (www.interactivevideonetwork.com) and AOL’s Lighteningcast. (www.lighteningcast.com), are offering innovative ways to reach online audiences with video.
• Google is experimenting with its famous pay-per-click model with video, offering advertisers a performance-based option.

EYE-OPENING STATS

• Consumers viewed 3.7 billion videos online in March 2006.
• They spent an average of about 100 minutes (per month) viewing those videos.
• In terms of time spent watching video, males are watching more than females, by about a 60/40 margin.
• During that same month, about 42 percent of all Internet users watched (streamed) video through an entertainment site, and more than 33 percent from a portal. That’s a lot of people watching video online!
• YouTube, the video search site where consumers can upload and share videos, has come out of nowhere and now attracts 50 million viewers and 50,000 uploads per day.

So now that you know what’s going on, and that online video really is the next big paradigm shift, should you be rushing to put DRTV ads online? Here are seven key areas to explore before you rush to start testing:

Are the economics viable yet? We’re all used to a world of single-digit CPM rates, with an entire discounted structure for DRTV advertisers. Some video sites are charging as much as $20 CPM or more, which puts it out of reach for most direct marketers. Google has indicated that its system may result in single-digit CPMs, so investigating these sources obviously is an important first step.

How will the size of the online screen affect your existing commercials? My monitor is 17″ measured diagonally, while one of my smaller TVs is 27.” But I’ve observed that most people don’t watch videos at full-screen size, usually much smaller, like 3″ to 5″ diagonally. So given that, how will your commercial play in a significantly smaller size? Will the type on your screen even be visible?

What is the response mechanism? How will consumers get from the page on which the direct response online video (DROV) spot runs to your website? If it’s a click from the site on which the spot airs to your website, that’s a trivial exercise to set up tracking. If it is within the video, it’s more complicated. And if phone numbers are permitted, well, we already know how to do that. These are key questions to ask as you explore this nascent field.

What is the tracking mechanism? While I don’t think tracking is an impediment for most sophisticated e-marketers or direct marketers, you still need to nail it down. However, a new measurement is now being introduced; and therefore, you may want to consider the percentage or time viewed. How will this correlate to your response, and how much is charged a view if you are in a pay-per-view media placement?

Can you target specific audience segments? The size of the web and targeting capabilities of ad networks usually results in the ability to hone in on niche audiences. While we all tend to produce DRTV spots aimed at the widest audience, we may in fact be able to start going in the other direction. At the very least, you may be able to see higher response rates based on targeting.

Understand the different types of options. Within this new world of video online, you have video that plays only when the visitor clicks to view it, pre-roll and automatically played video. Each one has pros and cons and requires thought on which makes the most sense for your business.

What will work online? We all know that you need to capture the TV viewers’ interest in the first 5 to 10 seconds or they will click away. Thus, the same applies to online video. It’s easy for them to stop the video and move on. Think about what you might have to do differently in order to capture their attention, get them to keep watching, and motivate them to action.

While DROV isn’t ready for primetime right now, it is moving so fast that it’s likely to be in the near future. I believe this space will be flooded with advertisers anxious to test the innovative uses of video on the web. What you need to do is assign a point person to start investigating the future potential of DROV and finding the answers to the questions I’ve raised. This person also needs to think about how to leverage current footage, animations, testimonials and other assets. Do this now, because before you know it, you’ll need to shift gears from idle to drive.

In fact, perhaps we as direct marketers should convene a high-level task force to explore these opportunities, vet through the issues and make recommendations to us as a group.

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].