What GOVA’s Gavone Means to Online Video and the New Networks

There’s a new Global Online Video Association led by Paul Kontonis. What does it means to YouTube and the networks like Collective, Maker, Machinima, Fullscreen and others?

He’s the new GOVA Gavone. The leader of the online video association. The guy who’s scream silences a room.

AdWeek reports that Paul Kontonis, former online video producer and agency guy, is heading the new Global Online Video Association (GOVA). Kontonis has been a leader in the online video space from its inception, including such roles as founder of “For Your Imagination,” VP at Digitas’ Third Act, and chairman of International Academy of Web Television.

online, video, gavone, GOVA, association
Paul Kontonis is the gavone who heads GOVA, the new online-video trade association.

By day, Kontonis heads sales and strategy for one of the top “multichannel networks” (MCNs) called Collective Digital Studio. GOVA is made up of nine of the top MCNs (also called online-video studios and “new networks”). These include Collective, Maker Studios, Fullscreen, Big Frame, BroadbandTV, DECA, Discovery’s Revision3, Magnet Media and MiTu Networks. Machinima is conspicuously absent, but unlikely for long (it’s quite common for the biggest in an industry to initially think they don’t need an association).

GOVA represents 9 of the top 10 online-video studios, or MCNs
GOVA represents 9 of the top 10 online-video studios, or MCNs

Caveat: I know Kontonis and like him (which is why I am allowed to call him a gavone as a term of respect). He was even in one of my videos where I thought I turned invisible. But I haven’t spoken to him in a while and know nothing directly about his GOVA appointment. So this is all my speculation based on watching this space mature. And I wrote a book, so shut up.

What’s ahead, and what does GOVA mean to the networks and the maturing landscape of online video?

  • Susan Wojcicki, the leader of YouTube.
    Susan Wojcicki, leader of YouTube, is focused on mainstream players. GOVA may help keep her attention on smaller studios.

    Bargaining Power with YouTube. The online-video networks, or “multichannel networks,” will now have a collective voice they’ll need more in coming years. That’s in part because YouTube, the virtual monopoly on distribution, is increasingly turning its attention to more mainstream studios and traditional networks. As YouTube grows, it will be increasingly difficult for individual studios to command the attention they’ve received in the past. How do we know that? History is the best predictor: Initially top YouTube stars could garner attention from Google and resolve issues. But eventually YouTube creators needed the power of a network. The networks don’t know it yet, but in years ahead they’ll need strength in greater numbers than they have today.

  • Bumpy Road, Herding Cats. Associations can be tricky, as participants theoretically want a collective voice, but they’re also competing against each other for precious advertising dollars. Kontonis has shown he’s got the diplomacy and persuasion to herd these network cats.
  • GOVA may help keep emerging studios independent, which is good for "amateurs."
    GOVA may help keep emerging studios independent, which is good for “amateurs.”

    Could Slow Down Acquisitions. In the coming years, we’d expect to see more of these online-video networks get acquired by larger players. Discovery ate Revision3. Google ate Next New Networks.  GOVA may give some of these players more time to play independently, if they wish, before the eventual consolidation of traditional and “multichannel” networks in the 2015-2020 period.  That doesn’t mean the MCNs will be less attractive to acquiring parties, it just means they won’t be as desperate to be sold. That’s a very good thing for individual creators of these networks. (When they do get acquired, they’ll try to convince you it’s a good thing…  but as a loyal WVFF reader you’ll know better).

  • GOVA can help negotiate with emerging video-playing technologies
    GOVA can help negotiate with emerging video-playing technologies

    Developing Emerging Channels to Reduce Dependency on YouTube. As we look beyond YouTube, the major stakeholders are technology companies, advertisers, and content creators. Years ago, an individual studio could negotiate their video content onto new platforms — like we saw Revision3 do with Roku and College Humor do with TiVo. But that will be more difficult as stakes increase and traditional networks start seeing more meaningful “TV dollars” moving to emerging channels. This coordinated approach through GOVA will increase the studio’s voice with new platforms. Watch for GOVA serving a role to keep them “out in front” of new platforms — from Roku to Netflix and Hulu to Amazon. And more importantly, the emerging video distribution platforms we don’t yet see coming. Maybe one day even AppleTV!

  • Other Boring But Important Crap. GOVA can also help with legislation/regulation, advertising formats, metric standardization, growth of the online-video, and thought leadership. Depending on the issue, they will likely partner and challenge other players like IAB, ComScore, traditional media associations, and marketing agencies.
  • Four More Years. That’s how long I see this lasting. By 2018, we’d expect GOVA to roll into the Internet Advertising BureauIRTS or some other association. But no other association has the knowledge of or focus on this medium.
  • Bottom Line. Creators and studios need GOVA whether they know it or not. Otherwise the technology platforms and advertisers will set the agenda.
maker, deco, big frame, deca, magnet, fullscreen, collective, web, studios, networks, online, youtube
9 out of the top 10 “multichannel networks” are included in the new association.

How to Measure Online-Video Advertising: Shaping the Fog of “Engagement”

“Video advertising is still ‘in its diapers’… you gotta remember that most people don’t want to see ads” said eMarketer’s David Hallerman in a webcast last Thursday (October 21, 2010). eMarketer provided highlights from a report (“Video Advertisement Engagement: What Marketers Need to Know”) in the one-hour webinar, and slides are excerpted from that.

Engagement is worth defining considering it's what advertisers want most (after awareness)

Hallerman says online-video is the most expensive form of digital advertising, and skews toward professional content not user-generated. He explores both the definitions and forms of engagement. Per the chart on the right, awareness is still the #1 goal of marketers followed closely by engagement (according to an April 2010 study by Tremor Media of 98 advertisers/agencies).

So what is engagement? Some say it’s paying attention, others refer to interactivity, and still others refer to what happens afterwards.

I’d prefer to focus on what Hallerman calls server based data (a view, start-rate, completion time, mouse-over, sharing) and not survey data (like “brand health” metrics like awareness or intent, reported by Insight Express or Dynamic Logic). However those “brand health” metrics can be vital to determining “intent to buy,” which is often not captured by server metrics (although some cookies provide advertisers data about purchases that occur long after a video view).

Engagement metrics include:

  • Interactivity (clicking ad or mousing over): Scanscout’s cost-per-engagement. Hallermans says there’s an increasing desire among marketers for interactive pre-rolls.
  • Sharing or commenting
  • Interactions, experience (Forbes)
  • Two-way

Context is also important… an auto-roll on gaming or entertainment site is not going to be as powerful as a self-directed and completed video on a shopping site. Hallerman reminds us that consumers value HD (above many other factors) and that quality (original versus repurposed) is vital, and that’s an important insight. During the Q&A Hallerman later acknowledged that some studies are showing that repurposed television commercials are faring better than once expected.

Online-video advertising spend is growing in strong double digits through 2014 according to eMarketer

eMarketer projects continued growth of the medium as depicted above — reaching at least $5.5 billion by 2014. But when it comes to online-video ad views, all video sites aren’t created equally (comScore, Sept. 30, 2010). The report shows that “ads per viewer” on Hulu is more than seven times higher than Google/YouTube sites. See the rank of video-advertising properties, and Hulu tops followed by Brightcove and Tremor Media (both which serve ads on websites not exclusively devoted to video content). At 30 ads per viewer per month, it’s no wonder Hulu is considering cutting its monthly subscription in half.

Far more online-video ads are consumed on Hulu and networks (Brightcove and Tremor) than on Google/YouTube

Time per month per viewer on YouTube is nearly twice that of Hulu, despite Hulu’s content being generally longer (22 minute shows versus 2-3 minute videos). Hallerman refers to Hulu’s experience as “lean back” because we allow the show “to wash over” us, whereas other sites (YouTube) require a more “lean forward” experience. Marketers, says Hallerman, are looking for what they know from broadcast advertising — pre or mid-rolls played “in stream” during a video’s view.

An August 2010 study by comScore shows time per viewer leading by YouTube then Hulu

Marketers choose ad-networks to target online-video ads based on two factors: demographic or content. A beauty ad on Break.com, Hallerman explains, won’t likely get high engagement. As for viral?

“…You don’t just make something go viral,” Hallermans says. “It’s really a whole process that needs a blend of paid, owned and earned.” He provides the recent Old Spice example, which involved paid ads on television and the web, a microsite showing more content, and “earned” media where video answers responded to specific bloggers. He credits the paid ads were the “spark.”

Aside from viral or its own reason, here are what some marketers claim to have accomplished on YouTube. So one in five (20%) say their YouTube videos have driven sales via links. But recognize that the data are not saying that happens twenty percent of the time- it’s usually in the low single digits in my experience.

YouTube marketing tactics reported by marketers (MarketingProfs 2009).

Branded content (where the marketing is not “heavy handed” and is “almost a bi-product”) is the most effective forms of marketing according to an October 2010 report by the CMO Council. Branded content tops more traditional online advertising models or even database-driven behavioral marketing. Video content, for instance, about dogs with dog-food product placement… may have a greater impact than dog-food ads alone. “Creating an experience,” Hallerman says, “is hard but important.” These can be tracked by brand-equity scores. He provides another example of a hair-care product that might show entertaining or educational fashion tips (focusing on benefits) rather than advertising about the product (features).

During the eMarketer webcast, EyeWonder shared “server side” data that show higher engagement rates for ads in the financial sector, with travel or electronics on the low side of engagements. EyeWonder showed a case study involving Gatorade’s G Series, which featured a 15-second ad that allows customers to see how the beverage helps before, during and after an athletic event. The click-thru rate was a tame .13%, but the a video completion rate was an impressive 62% across all of the impressions.

Hallerman was asked to comment on how to make a video more likely to be viral, but said if he had the answer he’d be working at an agency. Perhaps he just needs a copy of “Beyond Viral.” 🙂

The Fourth Generation of Online-Video Advertising

Stop. Do not read another word before pausing for 15 seconds. Really.

Okay. How’d that feel? Chances are you ignored the advice, and perhaps it compelled you to defiantly plunge ahead with more interest. After all, the headline promised 4 generations, and that usually begs the question “what were the first three?”

But I made       you        wait. What if I forced you to wait?

Would you click the headline next time? I suppose it depends on how saucy it was. Maybe “New Video Compression Technology” would have instantly given your brain a pro/con dance. But “Fat lady falls down stairs and onto YouTube” might be the “spoon full of sugar” that made the interruption “medicine go down.”

According the book I read last night (Neuromarketing) your "old brain" (the prehistoric one that actually makes decisions) will love and remember this image. But your less important "new brain" (intellect, feelings) may find the text interesting.

My point is this: the third generation of online-video is preroll ads. Let’s get past this, shall we? They’re usually void of entertainment, unavoidable and will continue to proliferate and erode the medium — if unchecked. And according to my media friends, they’re hot. They’ve made me far more selective about what content I view on YouTube… it better be worth it. And this morning, in a move that might surprise you, I asked YouTube to turn them on my Nalts channel.

Think About.com in the mid-1990s, when it fell from a coveted curator of credible content to a cesspool of ads masquerading as content, and ads masquerading as more obnoxious ads.

So many ads you'll get an epileptic seizure (ask your doctor about ZIMPAT)

But let’s back up and look at the first three generations of online-video advertising in simple terms:

Lurker hangs around playgrounds and sometimes finds a victim.

First Generation: Lurker. Nickel CPM ads surrounded videos, and didn’t even subsidize the bandwidth. YouTube was a voluntary non-profit, and companies like Revver and Metacafe compelled creators with ad-sharing. Unfortunately the advertising industry saw online video with the same disdain it viewed the web in 2000. Oh- that’s the Wild, Wild West. We can’t put our brand next to that nonsense. In fact people aren’t even using the medium. You want reach? Look no further than the original tube.

Second Generation: Overlay ads. The healthy compromise of ads like YouTube’s “InVideo” model was what saved the medium. The ads had critics, but as an advertiser I felt like my brand got enough attention. As a viewer I felt like I could tolerate it. Ad a creator I felt like I enjoyed the higher revenue. But then the illness started with our children. They began reflexively closing the boxes, almost like you hit “skip” on the flash/splash screen on the publisher’s website. So click-through and presumably all the other polite terms for “no immediate action” (awareness, recall, attitude, purchase intent, favorability) dropped too.

You peeked the first few times, didn't you?

You want access to the party? You'll deal with him first.

Third Generation: Pre-Roll Bouncers. You won’t have to look hard to know my POV on these little bastards we call pre-roll ads.They’re annoying, intrusive and deceptive (you often mistake them for the video you thought you’d be watching). And I just asked YouTube to turn them on my content. Why? They’re profitable. Why? They work… for now.

Fourth Generation: In the Show. Before I explain what I hope will be the fourth generation, let me guess what you’re thinking… that these surround, overlay and pre-roll ads are here to stay. You’re right. The lurker, flasher and bouncer will be around as long as media buyers are held accountable to buying space like purchasing agents buying #2 pencils and copier paper. As long as reach, “frequency and single-minded impression” is chanted like monks by students of advertising 101.

Hmmm. I'm thirsty.

Now think like a receiver of advertisements. The Coke room on American Idol. The weather brought to you by Smuckers. They’re gentler on the stomach and more effective than the leading medication. Advertisers need to get within the show. It’s not easy to scale, it’s hard to do an “insertion order,” and it may not be the “path of least resistance” to getting your brand’s aided recall up by 50%. But it’s polite, there’s an implied endorsement, and it’s impossible to ignore. The brand is hero not the Soup Nazi. Most of Beyond Viral addresses this model of advertising, however my “lurker, flasher, bouncer” model is conspicuously absent in the book. It came to me in a dream last night. Shut up. Most of my dreams are better than your acid trips. This one just happened to be about advertising.

The burden of proof, I’d contend, is not on “in the show” to prove it’s scalable and drives purchase intent (although it certainly can’t be without accountability). Rather the burden of proof is on the less Darwinian evolved models to prove they’re a better bang for the buck.

Is Online-Video Recession Proof?

Online-video advertising is still dwarfed by television advertising. But fear not the recession, online video advocates! Fear not these gloomy photos of the depression that you’re seeing on all of the weekly magazines. And this is according to  Christine Beardsell from Digitas writes in a ClickZ article.

Here are three reasons Beardsell says online video advertising will come out ahead during an economic downturn. Parenthetically, search “recession” on Google Trends to see how freaked people are getting.

  1. No Longer Experimental. Past economic crises often led CMOs to cut back on experimental advertising, and they rely on the skills and responsibilities they’ve traditionally relied upon… as Keith Bobier, senior director of marketing at Unilever, put it: “We are not pulling in the reigns at all…there is nothing experimental about this for us.” In fact, during financial struggles, aren’t the customer-centric things exactly what brands and their customers need most?
  2. Possible, Affordable Optimization: If you’re a marketing executive given the option to either make two new TV spots for the year… or create several video brand content experiences throughout the year that can guarantee measurable, detailed, optimized results and build engagement with your customer, which option would you choose? You get less for more when it comes to TV spots.
  3. Less Buying, More Conversation: While there may be a lot less money to spend when money is tight, that doesn’t necessarily mean people will spend less time engaging with your brand. In fact, frugal spending often means longer hours researching products and discussing those products with trusted friends and family. And with research and conversations now happening predominately online, brands more than ever have the opportunity to join these discussions and help customers make smart purchasing decisions.

I’d add two things. When I tighten my marketing budget, I tend to focus on squeezing down the largest spend, and not starve innovation. So as long as online-video ads provide metrics (see Daisy Whitney’s article on TubeMogul and Visible Measures) then they’re not going to be the first part of the mix that’s cut.

Online-Video Ad Spend: Optimistic But Still “Sculpting Fog”

Don’t get depressed about the economy folks. Even wrecklessly stupid brands are squeezing old-media spending in favor of paid search, targeted interactive advertising, and … yes… even online video.

Marketing and advertising spend on online video has a good future. Even though it’s a small sliver of online spending and difficult to measure (slicing fog), Uncle Nalts has some ideas for the industry that can help. I’ve even numbered them below, but let’s look at the problem first.

Today’s eMarketer reports that LiveRail (LiveRail is a video ad server, so take this with a grain of salt) estimates 2010 at $1.4 billion, up from a 2008 spend of about $619 million. eMarketer is a bit more conservative (and recently downgraded its forecast), but may not be counting special programs… for instance, it’s hard to measure sponsorships that are unique to a creator or a website. Nonetheless, most agree that online-video represents just 2% of online spending, which is asburdly low. It reminds me of how slow media buyers were to capitalize on paid search in the early 2000s. I need to say that again. It reminds me of how slow media buyers were to capitalize on paid search in the early 2000s.

Daisy Whitney wrote a nice article summarizing the issues with measuring the online-video advertising. Uncle Nalts spoke to Whitney, but she had tossed her phone in the bathtub before he got his points across… Whitney reports that IAB (Interactive Advertising Bureau – see its blog) likes its methodolgy for capturing spending.  IAB measures “digital video commercials” or “TV-like advertisements” that appear before, during or after a variety of content, but not brand integration. “We believe we are capturing the biggest part of a growing market,” said David Doty, senior VP, thought leadership and marketing, at IAB.

Clients for whom Nalts has done promotional videos, or consultingI couldn’t disagree more. By IAB’s definition, I make zero income on online-video advertising. That’s because my YouTube Partner revenue is based on “InVideo” ads that presumably don’t meet IAB’s definition. And certainly the low income CPM-based “display creative” around my videos is not captured in that spend. But as grateful as I am about YouTube sharing advertising revenue, I make far more money through custom videos (aka sponsored videos).

What are sponsored videos? See this page for examples of entertaining videos that have subtle brand messages. My fellow creators do more subtle “product placement” for money, but I haven’t messed with that yet because I fear backlash if I’m not transparent. And I don’t want someone thinking I’m getting paid by Coke if I take a swig in a video. Even though I totally would if my friend Mike at Coke Interactive would throw be a friggin’ bone.

So what do we need to spur further uptake in online-video advertising?

  1. Measure it more precisely to help brands understand how to allocate their spend, and increase online-video advertising from 2% to something closer to 10%.
  2. Conduct more studies that show video advertising works — even if it’s surrounding (gasp) amateur or consumer-generated content.
  3. Encourage experimental marketers who are not only open to new channels, but pressure agencies to identify creative options so they’re not lost in the clutter.
  4. Reward agencies for exploring new vehicles to reach target consumers when they’re engaged in their experience (and not brain dead on the couch). The inventory is there, folks, but we’re not going to solve the problem by hiring stupid CPM media buyers that are recently graduated, hungover and trying to find a new boyfriend.

IAB online video metrics standardsThe Interactive Advertising Bureau (IAB) has now proclaimed metric standards in a PDF document available here. According to the report, “These definitions are part of a larger IAB effort to stimulate video industry growth by making the reporting of metrics for agencies and advertisers across multiple media partners more consistent”

Thanks to Mike Abundo of Inside Online Video for alerting me to important stuff like this that I might otherwise miss.