Since I was dangerously close to having a “dark blog” here, I thought I’d share some recent online-video information that’s worth knowing.
Online-video ad spending continues to grow, with 2017 looking to be passing $9 billion this year (it was $6.8 Billion in 2016). That’s according to recent research by the Interactive Advertising Bureau (IAB) as reported in “Digital Content NewFronts: Video Ad Spend Study.” Advertiser Perceptions surveyed 358 US agency (47%) and marketing (53%) professionals to inform projections.
What do you need to know about online video for 2016? Here’s a convenient “round up” for your viewing pleasure.
Mobilization. Mobile advertising is growing 66% and desktop is just 5 percent. What’s interesting to me is that 36% of our time is spent on TV, and 39% of the ad spending is there. But we’re spending 25% of our self on mobile, while only 12% of ad spending is on mobile. Implication: watch for way more advertising in your apps, on mobile-enabled site, and perhaps even while you text. (KPCB Internet Trends, June 1, 2016)
Mobile vs desktop tie. By 2020, online-video advertising will be about 50% mobile and 50% desktop.
Pay TV is stuggling. About 86% US Internet users think pay TV is too expensive. Some forecast a decline (source: TVFreedom, : SNL Kagan as cited in Video Advertising Bureau, 2015).
TV ain’t dead. According to eMarketer “TV will continue to grow and remain the top video advertising format through 2020.” That said, our time with digital video (versus TV) changed in 2012 and the gap has widened, with digital outpacing TV (Nielsen, eMarketer).
Netflix is rocking it for time. The streaming time of Netflix is growing insanely. 600M hours in 2009 and 42 billion hours in 2015. And originals are the reason (Netflix and Cowen & Company, 2016)
Digital Video Ad Spending is Growing But Slowing. We’re seeing about 30 percent growth in digital video ad spending this year, but in the next few years the growth will slow somewhat…. Down to 20 percent next year and about 10% by 2020. Still growing, just not as radically.
Video ads need help. Many Online video ads are ineffective. About 80% of us mute video ads, and the majority (62%) are annoyed with pre-rolls. And 93% consider using ad-blocking software (Unruly Future Video Survey, July 2015). Given mobile use behavior, online videos are going to have to adapt.
Block You. You know that thing about mobile users being annoyed by ads? The growth of mobile ad blocking is happening radically faster than desktop (as cited by the KPCB report, PageFair & Priori Data 2016 Adblocking Report.).
What works in mobile video ads? Keep it less than 10 seconds, shoot it for mobile, and try for full-screen delivery. (Snapchat and other sources).
What makes for good video ads? Unruly’s recommendations: be authentic, entertain, evoke emotion, go personal/relatable, be useful, give viewers control… and work with sound off and in non-interruptive ad format.
What does it mean to top YouTubers now that Yahoo, Disney and Google are showing them love? Will we see the online-video landscape resemble network/studio relationships?
It’s a good time to be a YouTuber… or at least own a popular YouTube channel. We’re seeing the online-video landscape mature, and start to resemble how networks and studios connect. The networks (Disney, Yahoo, YouTube) are working with studios (online-video studios and some individual partners/channels) in some interesting ways….
What’s interesting about these big moves is how markedly different this is from the past behavior of these companies.
We saw Disney making some early bets with its own home-grown online-video content. Remember Stage 9?
Yahoo contacted me and other YouTubers around 2008 to discuss potential revenue-sharing deals. They were considering exclusivity at the time, and that’s a deal breaker for YouTubers that won’t give up their primary audience.
And Google? It hasn’t even marketed itself well, much less its partners. And who would ever imagined the tech-engineering company would advertise YouTube partners on TV, print or outdoor? They’re doing it, but you know it pains them.
So what’s all this mean?
These events don’t impact your typical YouTuber, but the winners of the Yahoo/Google efforts will be the YouTube creators with large audience and studio representation by one of the online-video networks. That’s because Yahoo and Google will have to deal with the complexities of Discovery to get to Revision3 content, and Disney to get to Maker channels/creators.
But watch for partnerships between Yahoo and smaller studios like Fullscreen, BigFrame and Collective.
And what about Google’s efforts to promote YouTubers beyond the YouTube regulars? I would expect to see “the rich get richer,” because it’s most likely to promote the proven content with top views. So like a marathon’s second half, we’ll see an increasing distance between the leaders and the rest.
There will surely be some more attempts to lock creators and studios to “exclusive” arrangements, although Yahoo won’t get anywhere requiring that of popular YouTubers. But it makes sense. TV shows don’t get to broadcast on every channel. The networks pick the shows, and promote them to “their” audience. We’ll see that happening with top YouTube channels in coming months and years, which is why YouTube will have to work harder to cultivate relationships and keep stars/channels.
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.
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).
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?
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.
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).
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 Bureau, IRTS 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.
I’ve had a few requests from readers/viewers to clarify YouTube’s evolving Partnership program, and help “up and coming” YouTube creators understand how to make money via video. As always, I’d caution YouTube video creators to keep realistic expectations on earnings– right now there are hundreds of YouTubers earning six-figure income from YouTube. But the majority are earning small amounts, and the driver is daily/monthly views.
Below is some information about the evolving YouTube Partnership, and 9 additional ways to make money via video.
A YouTuber can expect to make anywhere from 50 cents to $5 on every 1,000 views. So a channel getting 1,000 views per month can maybe cover a cup of coffee. The bigger YouTubers like RayWilliamJohnson are making anywhere from $500K to $4 million a year (SocialBlade), and I’d guess it’s around $2 million. It’s a steep pyramid, folks.
So here are the ways to become a YouTube Partner, where you’re eligible for “revenue sharing” on your videos. Ads appear before and around your videos, and Google shares a percent (roughly 40% of what advertisers pay for those ads).
Sign up to become a Partner on YouTube. Unlike previous years, most are granted Partnership (including my dog, FreddieNalts). In truth, this isn’t a full Partnership as we previously knew it. You’ll make a smaller amount of money because the ads are not exactly premium. YouTube has effectively changed the name of “monetize your videos” to Partner.
If you’re getting tens of thousands of views per month, you could approach an Online Video Studio (OVS) to come a full-fledged Partner with advanced branding. You’ll need to share a percent of your earnings with the studio, but you’ll get some help resolving issues, and potentially some help building an audience. This type of Partnership also allows creators to customize their channel page and put a small icon over the videos that appear on “watch page.” This used to be available directly via YouTube, but YouTube is increasingly encouraging intermediaries to handle this process… remember Google doesn’t like to deal with people. It’s a technology firm, and isn’t resourced to provide personal attention to millions of YouTube creators. So becoming a full Partner can be accomplished broadly in two ways. First, you can sign with an “Online Video Studio” (OVS). In that post about web studios, I neglected to mention The Collective, which has helped a couple YouTubers (Fred, Annoying Orange) cross over to television.
Finally for smaller YouTubers, there’s another option I discovered via Jason Urgo last night. Urgo/SocialBlade is helping smaller YouTubers (maybe 1,000 views per month) you can apply to become a Partner via Maker’s RPM Networks. The result is similar to option #2 but the bar is lower.
Don’t think of YouTube ad revenue as your only source of income for video creation. Here are 9 other options for making money via online video:
Create Commercials. If you’re talented and have high production capabilities (but don’t have an audience), you might join Poptent and create videos and commercials for brands… you’re not guaranteed to be compensated, but if a brand selects your video, you can make $5 or $10K.
BYOS. If you have a large audience, you can pursue your own sponsor (bring your own sponsor- BYOS). Just call a company and see if they’ll pay for a custom video or some product placement. These are easier to get if you’re in a web studio/OVS.
Get Free Loot. Call a company and see if they’ll send you free loot in exchange for your mentioning them. It’s not easy to find the right person, but I’ve been surprised how receptive companies are. They often have programs to reach online influencers, and if you have a decent audience… that includes you.
Sell Your Stuff. This DailyFinance reminds us that artists can sell their stuff via video. Got something on eBay? You could mention it in a video, and see if you can get the video SEO-optimized so it might appear via a Google search.
Sell your videos if you think there’s a market for them. Learn more here. I believe you need a Partners account to do this, and I wouldn’t count on this tool. Most people don’t purchase amateur video content, unless you count porn or Louis CK. I suppose there’s some “how to” video that’s worth buying, but I don’t see this as being lucrative.
Drive to Website: you can try driving traffic off YouTube onto a website that allows you to sell loads of additional advertisements/sponsorships. It’s difficult to get people to follow a link of YouTube, and I’d estimate low single-digit numbers (depending on the reason). But Smosh’s “Smosh Pit” is a nice example of how YouTubers have created adjunct websites where additional monetization is possible.
Affiliate Links: If you’re really cheesy, you can try making videos an inserting affiliate links into the description. I’ve never seemed to make anything notable via affiliate links on my blog and in a few links from a video.
Merchandise: CafePress and other sites allow you to create your own branded merchandise and sell it to viewers. I think I’ve sold max. a dozen things on CafePress, but I haven’t put much effort into it.
Get Rich Quick: Try one of the bullshit “get rich quick” schemes. Good luck.
The Brightroll data comes from a survey of advertisers about how they’re approaching online video and what their budget plans are for the coming 12 months.
64 percent said they believe that online video advertising is equally or more effective than the ads that show up on TV. That’s a big deal.
Why is online-video rivaling TV? Because 70 percent of Internet users watch video online, meaning scale/reach is now possible.
Most respondents see online video as more effective than both display and social media. That’s notable given the market’s increasing obsession with mobile and social-media ads.
30 percent of respondents said they expect online video to grow faster than any other type of advertising. That’s actually oddly conservative. Remember eMarketer estimates that US online video ad spending will grow by a compound annual rate of 38% in a five-year span ending in 2015, making this by far the fastest-rising category of online spending. Do the other 70% feel otherwise?
Performance metrics continues to confound media buyers. About 70 percent said that they needed a more clear ROI and success metrics to justify increasing spend on online video. And about a third want more info about the impact their online video buys have on offline purchasing. TV has had more time to develop metrics and prove results.
As any new media emerges, there’s a dance between the evangelists and skeptics. We saw it when the web arrived. We saw it at the dawn of display. We saw it with paid search (which the survey suggests is still the favorite of advertisers). Now we’re seeing it with the ongoing debates about the merits to TV and online-video.
But now it’s hard to deny online-video and praise TV has the bedrock of branding. With apologies to Mark Cuban (who is still a skeptic of online-video). It’s time to recognize that both TV and online-video have a powerful role in advertising and marketing, and that’s why most media-buyers are savvy enough to plan, buy and measure TV and online video together (eMarketer).
Remember what Nalts has been saying for many years, kids. Eventually we won’t have terms like “TV” and online-video. We’ll just view video as a channel or media manifestation whether it occurs on a computer, mobile device, HDTV, pad or those new fangled cathode ray tubes.
The headline is a quote by Mark Cuban, who is very rich. The full quote, as captured by Adam Kleinberg in last week’s Videonomics event in Dallas Cowboys stadium, is: “Online video is irrelevant. The top videos most days on YouTube get 250-750k views. If you got that kind of traffic on TV, you’d be a huge failure.”
Before I comment on Mark’s thoughts, I gotta say… I love Adam’s post for three reasons:
He references me before Mark Cuban.
He captured the quote I was too lazy to write down.
Adam let me kiss him on the head, and he’s like a human teddy bear. I told him I almost want to go back to a big company just to hire his agency, Tractionco.com. If you know anyone from Studio Lambert, tell them to get Traction Co on The Pitch (AMC) NOW.
I did get a photo of Mark Cuban and me, but nobody seems to care as much as I might have thought. Only 5% of the people I know seem to recognize him, and only 14% of that segment seem mildly impressed that I arm wrestled him. Some were more impressed that he’s on Shark Tank than the fact that he sold Broadcast.com for 55 billion.
And now to the point (you buried your lead again, Nalts): Mark Cuban’s point was that the view count of “YouTube’s most viewed videos of the day” pales against television-show viewership. He’s got two reasons, the first is that YouTube most-viewed daily videos sometimes don’t often more than a few hundred thousand views. Second, the views are brief relative to viewing durations of Shark Tank, which Mark says is the show most watched by entire families. Mark appears on that show.
What Mark didn’t point out is that the most-viewed YouTubers (top 50-100) typically have daily views that exceed top television shows. Annoying Orange or Ray William Johnson get 10x the daily views of many network shows. They are, in effect, small networks. Sure the views are minutes not 30 or 60 minutes. And they’re less monatized. Furthermore, here’s another little secret for Mark. Sometimes a creator’s “daily views” are not, in fact, driven by their most recent video — a creator’s daily views are often driven by the cumulative views of the creator’s collection. (For instance, my recent videos tend to be viewed a mere fraction of the total daily views I have; the latter number is driven by a few older videos, like “Scary Maze” or “I Are Cute Kitten,” that continue to accumulate views).
During last week’s Videonomics event, Mark invited people to challenge him, but I declined because… this is all a moot point. Why? For starters, advertisers want eyeballs, and they don’t generally care if they bought 100 ads on 100 YouTube videos or 5 ads on 5 television shows.
They want targeted reach with spending efficiency.
Period. Advertisers also need scale, and if media fragments so too will their media spend. Most studies show that online-video advertising growth will come at the expense of television advertising in years ahead… but eventually these budgets won’t be separate. That brings me to my second point… in the next 4-8 years we won’t really discern between online video, cable TV, mobile and television. It’ll all be video, and the long and short tail will both matter to advertisers.
Lately I hear childrens’ voices coming from most of our devices. And when I lose my temper, my road can be heard live in households across the globe:
My 11-year-old son speaks regularly with fellow Xbox gamers all over the planet… hopefully some are actually his age.
My 9-year-old son talks to his mates via Skype while playing Mindcraft on the PC.
My 13-year-old daughter does homework while talking with her classmates on FaceTime.
I did consider that this was just my bad parenting, but apparently my children are not alone.
According to a new Pew study, 37% of internet users ages 12-17 participate in video chats with others using applications such as Skype, Googletalk or iChat. Girls are more likely than boys to have such chats. A PC magazine story reports on the research and points to some of the new tools to facilitate live video.
The research was fielded in the first half of 2011 so it’s probably dramatically understating these activities as reflected today.
So apparently the Nalts kids aren’t too far off the norm… at least on this particular topic.
AOL is launching an online-video hub that will feature 14 content channels and centralize AOL video in one place, according to The Chicago Tribune.
“We believe that in years ahead people will want to watch television on their PCs and Blackberrys,” said AOL CEO Tim Armstrong. “Wer’e unrivaled in this new category of web-based moving pictures.”
Armstrong was not immediaetly familiar with YouTube, an online-video website acquired by his former employer, Google. Nor did he seem deterred that YouTube has more channels created hourly than the 14 he’s merging into “one place on the AOL portal.” One AOL channel is entirely devoted to Mark Day comedy routines.
Ran Hernveo, SVP for Video at AOL, said in a statement that AOL On “goes beyond the traditional online video experience by delivering video that’s different from other online videos.”
Hernveo and Armstrong agreed they were especially excited about coming years, as AOL plans to stream videos far faster than the 56K modem limitations of today.
Though television may be losing viewers to online video, it continues to hold advertisers. Fewer people have been watching traditional TV channels so far this TV season, the first such decline since at least 2007.
Here are some details, punctuated by my favorite “cringe worthy” quote of television versus online video.
broadcast networks’ “upfront” will rise 1% to $9.16 billion, and that cable-network upfront commitments will increase 4.3% to $9.68 billion.
This year, for the first time formally, online-video companies, including Google and Yahoo, are holding upfront-like ad-sales presentations this week and next. Online-video networks will showcase new webisodes, and YouTube will boast of its new “originals.”
Ultimately, advertisers continue to see television as a place to scale, and media buyers have historically been very tentative about adjusting to new mediums. However online video is an easier conceptual leap for even the thickest media buyers.
Here’s that favorite cringe-worthy quote by UBS Securities analyst John Janedis:
“There is a lack of confidence around the measurement of online video at this point and that means it will be challenging to see big money move from TV to online this year,” added Mr. Janedis.