Category Archives: Future of Online Video

book, Future of Online Video, Killer Video, Making Money, Making Videos, Online Video, popular videos, Profit, Viral Video

Southpark on Monetization of Digital Content

April 4, 2008 Nalts 6 Comments

Kyle from Southpark puts it well in this 30-second clip from “Canada on Strike.” The clip’s called “The Promise of Future Revenue.” Thanks to Jan for finding it.

Boy I’m sure glad that’s over with. Me too. Yeah, but you know I learned something today. We thought we could make money on the Internet. But while the Internet is new and exciting for creative people, it hasn’t matured as a distribution mechanism to the extent that one should trade real and immediate opportunities for income for the promise of future online revenue. It will be a few years before digital distribution of media on the Internet can be monetized to an extent that necessitates content producers to forgo their fair value in more traditional media.

In this part of “Canada on Strike,” the Southpark folks meet some YouTube weblebrities (the cliche one-hit wonders). There’s something pervursely symbolic to see all of the Internet stars — laughing baby, sneezing panda, gopher, Chris Crocker, Chocolate Rain, Tron guy, Numa Numa — end up in a bloody mess on the floor.

advertising, AOL, book, Future of Online Video, Killer Video, Making Money, Making Videos, marketing, Nalts, Online Video, popular videos, Video Advertising, Video Business, Viral Video, YouTube

Why Media Buyers Are Stunting the Growth of Online Video

March 21, 2008 Nalts 9 Comments

Balding white marketer desperately wants to meet smart, strategic media buyer. If you’re one, please recognize you’re not the target of this rant. But the rest of you are just so friggin’ short sighted and clueless.

There are some amazing online-video series that could be incredible opportunities for smart brands wanting to engage with early adopters of a medium that is changing the way we relate to content and brands.

Brands can reach depth and relevancy with their target, even if it’s not driving total significant awareness and immediately creating ROI through driving intent, store visits, and trial.

I give you exhibit one. iChannel. A mere 8000 people are subscribed to this series on YouTube, but the views of the weekly series are roughly three times that (I’m the inverse of that with 30,000 Nalts subscribers, but some recent videos ranging in the 8-15K views). So it’s a healthy and highly devoted and interactive audience. Episode 31 had 180K views alone.

And it’s deeply philosophical, well acted, intelligently scripted and short and addictive. I had the pleasure of appearing in one last May.

These guys spend more time setting up one shot than I do on my entire post production. The audience is like a microcosm of those watching Lost. Or The Office. They’re engaged, passionate, and hold their breath waiting for the next episode.

So why would a media buyer pass on this?

It’s not a big media deal. No hot AOL ad reps are pushing it.
The audience isn’t big enough. No scale yet.
The conversion from the episode to a bloated brand microsite wouldn’t be great.
They can just advertise on YouTube’s invideo ads and get there.

Why should an electronic manufacturer dye to have sole sponsorship?

They could probably own it for the equivalent of pocket change they dug from the back of their marketing budget couch.
It would be ground breaking.
The audience is perfect, and the level of product engagement would be far richer than an ad we’re trained to ignore.
It sets the stage for a new model where advertisers contract directly with creators of content (who carry fixed audiences). No worthless intermediaries clogging the pipes between.

What’s the solution to grabbing these types of opportunities? Have these deals championed by someone outside the regular media-buying job. While I was at Johnson & Johnson, the big deals between media players (networks and magazines) were done by folks that weren’t inline marketers like me, but had influence over the way media budgets were set across the many brands. After all, J&J couldn’t get interesting deals if each brand fended for itself, and the interesting partnerships required someone that could step outside the short-sighted world I live in when charged with P&L of a brand.

advertising, book, Future of Online Video, Google, google video, Making Money, Making Videos, marketing, Online Video, Revver, Search, Video, Video Advertising, Video Business, YouTube

What Does Google’s Acquisition of DoubleClick Mean to Online Video?

March 11, 2008 Nalts 13 Comments

Google closed on the acquisition of DoubleClick today, and issued this statement to address concerns (continued Dart service, as well as privacy provisions).

As a buyer of interactive media (primarily paid search but also targeted display), I like this deal. Google’s muscle, innovation and discipline from the paid search origins means this could enhance the metrics around otherwise cute but unaccountable display ads. I’m tired of the “let’s do another bloated consumer survey to find out what display does to awareness, recall and intent.” There’s got to be a way to get conversion rates tied better to display, and if anyone can now prove the “one-two-punch” theory of paid ‘n display (think chocolate and peanut butter yummy), Google now can. And should.

Oh, I almost forgot. Here’s my “Enlightened Stupid Marketers” video I posted this morning to spoof my profession, and it touches on the impact of friggin’ newspaper ads versus paid search. Did you know that stupid marketers have two choices: to remain stupid, or pretend not to be? The core YouTube audience really doesn’t care much for these niche videos, but readers of WVFF might.

Where was I? Oh. Now here’s the challenge. This deal kinda makes some online media buyers a little twitchy, as some get threatened by consolidation downstream. Some of those flickering-bulb types (you know- the pretty ones that talk too much if they talk at all) will feel they’re one step closer to being as obsolete as their moms or older sisters who were, naturally, travel agents. Maybe they should be doing PR afterall?

In reality, the online media mix is dynamic and will always require smart, strategic buyers. It’s just that they’re only about 10 of them in the world, and 7 of them lose their charm exactly 6.5 days after they win the new account. Like Candycorn, the first few handfuls are delicious, and then suddenly you feel like you’re eating sweetened candles and can’t stand the site of them. You loved the little puppies in the litter, and now they’re just pissing on the furniture, biting the couch and barking all night.

So get to the damned point, Nalts. What does this acquisition mean to video? Well, probably nothing initially. But long term it’s good news for two reasons:

Text ads are currently more relevant than display ads around videos. Since Revver hasn’t been selling many single-frame display ads these days, we’re seeing the Google-run text ads (Adsense) served “InVid” style. Guess what? They’re actually relevant and capture my attention more than current display ads. I watch a lot of videos, and have developed ad anethesia for the limited number of CPG companies doing “run of site” ads across YouTube. Don’t stop, guys. I owe my YouTube partner income to you.
Since it’s Google buying Doubleclick (and not the other way around), we’ll see display develop some of the maturity of paid search. Harnass the visceral medium of InVid (quarter frame ads) with their sister display ads, then add the relevance of text relevancy. And if the databases can be merged in ways that don’t freak out the privacy people, then ads become even more relevant albiet sometimes creepy.

Now Google has two more challenges to make video advertising really interesting.

The Google account teams have to grow beyond paid search. This is not an easy transition. SEM (search engine marketing) buyers have a very hard time with CPM (cost per million- a term for buying for an ad based on impressions not performance). Meanwhile SEM sellers need to be trained to talk to CPM junkies. It’s kinda like being bilingual. You need a translator around for a period. Currently, it’s a buyer’s market for video advertising. I am convinced that the “marketers are afraid of buying ads around CGM (consumer generated media)” hype is a big, fat, stinkin’ red herring. It’s just that nobody is showing marketers how online video ads and more creative sponsorships can move their business. Google plus YouTube plus DART should be able to pull that off, but it’s going to require behavior and organizational shift.
Now the big challenge. If I get a CPC (cost per click) based on text ads around my videos, then I’ll tag them all with free Viagra, mortgage, loans, lawers and digital camera. So we need that ever-evasive “text recognition” technology that turns my droaning voice into targetable text. Blinkx was supposed to be doing this years ago. Then, of course, I’ll just start saying all those tag words as part of my scripts. 🙂

advertising, Blogs on Video, book, Contest, Future of Online Video, Making Money, Making Videos, Nalts, Online Video, popular videos, Video Advertising, Video Business, Viral Video, YouTube

The Marketeter’s Cheat Sheet to Viral Video

February 19, 2008 Nalts 13 Comments

You’re running a brand that is trying to “dip your toe” into social media and online video, and you’re facing some important questions:

Is my brand right for this?
How can I experiment without ending up as a “case study” failure?
Can I convince my company that we should do this?
What are my options for developing compelling content and distributing it widely?

Here’s a quick guide that encompasses a lot of topics we’ve covered on this blog. It’s the “least a marketer or agency needs to know” about online video, and will give you a roadmap for a good program.

Step 1: Determine if your brand is right for online video. Is your brand compelling and simple, or complex and direct-response oriented? If you’re a consumer-product goods (CPG), it’s a no-brainer. If you’re in a complex, crowded, regulated and boring industry, it’s going to be more difficult.
Step 2: Keep it quiet. The more senior management and attorneys you bring into a pilot, the more internal battling you’ll do before experimenting. Get some “air cover” from an executive sponsor, and avoid excessive internal scrutiny.
Step 3: Let go. Your marketing message is critical to you, but if your content is driven by an advertising objective it’s at risk of being a flop. If you want to go viral, you’ve got to entertain first and promote subtly. There are countless case studies on this, and it’s an inarguable fact. If you buy media, your ads can be boring. But if you expect people to share your video, it better be entertaining, provocative, sexy, funny, outrageous or at least interesting.
Step 4: Develop a creative brief. Don’t make it too narrow, but give it some focus. If you ask people to make a funny video that includes your brand, you’ll get a lot of stuff that may or may not support your objective. But if you require creators to insert a series of “unique selling propositions” then you’ll end up with ads instead of entertaining videos. With my smaller clients, I develop the brief. Larger clients often already have one, and simply need ideas or video content.
Step 5: Engage creators. You have four options here.
- Option one, you can hire your agency to create video content. This gives you control, but most agencies (advertising, online, and public relations) lack experience in social media and online video in particular. I’ve found this to be extremely expensive, and often the agencies lack the expertise to make the videos “not suck” and get the videos widely viewed and “seeded” in the right places.
- Option two, you can hire individual amateurs. This gives you access to people that know the medium and have established audiences. Some smaller brands (and larger ones) contract directly with people like me, InvisibleEngine, Rhett & Link and Barely Political (just a few creators that are interested in building entertaining, promotional content). This keeps things safer, but requires some oversight since you’ll need to interact individually with these companies or people.
- Option three, you can run a big, public contest. These are still quite common, but rather expensive. You’ll spend a lot on media to promote the contest (money I’d prefer to see brands use to promote the brand itself). You’ll also get a lot of lame content, but hopefully a few winners.
- Finally, you can contract with a third party that can represent a variety of proven creators. For example, a few large brands have contracted with Xlntads to help reach a collection of experienced amateur creators (note: I consult with Xlntads, and run its creative ad board). There are probably similar brand/creator models that offer this service, but I’m less familiar with them. I see this as an evolving industry that can either contract directly to brands or via agencies. For instance, Daily Motion has brokered between certain major advertisers in France, and works from the agency’s creative brief to identify, engage, pay and leverage the presence of appropriate creators that produce content on the site.
Step 6: Get the videos seen. If you want to buy media, you can run your videos as advertisements on a variety of sites. The second and third tier video sites are especially receptive to giving prominence to promotional content in fairly inexpensive media buys. If your content is good enough, you can hope it will travel “viral” style: people will share it with friends, post it on their blogs, feature it on their websites. There are three magic tricks that make this work:
- First, your content has to be good.
- Second, it really helps to leverage the distribution and audience of known creators. If an amateur has a popular blog or YouTube channel, this gives you a much better chance of wide distribution.
- Thirdly, you can “seed” it yourself or have the creators, third parties or agencies do it. This “seeding” involves reaching out to appropriate online properties, channels, discussions, forums and blogs. If it’s good content and you reach out to people politely your chances increase. I’ve seen bad videos that get lots of attention, and good videos that die. So this third step is non trivial and often overlooked.
Step 7: Evaluate. Did the videos get lots of views and positive feedback? What did the comments say? Did people take a measurable action after watching the video? Keep your expectations in check: few marketing videos break into the millions of views, and very few of those viewers will take an immediate action (visiting your site, and making a purchase). These videos will, however, help your rankings via Google and other search engines. So maybe the next time a prospect is searching for your brand on Google, they’ll find your brand-friendly videos instead of a competitor’s content or disgruntled customer. This is a powerful and often overlooked outcome of a good video pilot.
Step 8: Scale as Appropriate. Most online-video marketing projects are simple experiments to help brands learn and “test the waters,” and few have scaled radically. However some brands have been so excited about results with online video that they return annually with programs that are hard to miss.

With a few exceptions, I haven’t yet seen many online-video pilots driving significant, immediate sales for a brand. But I have seen online-video initiatives that have increased the awareness of the brand, and changed the attributes and preference of target consumers (as measured by awareness trackers). Most of my clients have enjoyed an online presence they wouldn’t have gotten on their own and found it a good investment. A few have confided that more people watched my stupid video than visited their big, bloated agency-developed website (which contained a variety of expensive videos they produced). It’s much easier to reach people on the highway of YouTube than to hope they’ll stop at the little rest stop you create (which is usually a huge expense and a “throw away” at the end of the project).

Other suggestions? Bring ’em on. This is a blog, for crying out loud.

advertising, Blogs on Video, book, Future of Online Video, Making Money, Making Videos, Nalts, Online Video, Video Advertising, Video Business, Video Sites, Viral Video, YouTube

Bubble Bursting for Video Creators Hoping to Monetize Content?

February 17, 2008 Nalts 26 Comments

Online-video creators are sobering up after an intoxicated 2007, as they realize that the “road to riches” via online video is fraught with challenges. Business Week proclaimed “amateur video hour” as over in December. Crackle and other sites migrated from UGC (user-generated content) some time ago. And here are some quite recent data points that, alone, aren’t really newsworthy but tell a sad story together:

Metacafe set a higher bar for revenue-sharing “Producer Rewards” program, much to the dismay of some creators who saw their popular videos drop from the program (see Metacafe forum).
Revver, the pioneer of online-video revenue sharing, was sold for pennies.
The initial participants of YouTube’s Partnership program (which shares revenue with creators) hit their one-year anniversary in March. Although YouTube and its creators are not permitted to disclose the specifics, I do have sources that reveal early participants received fixed fees that (in some cases) allowed them to quit their day jobs. The rest of us joined when YouTube had adjusted the program so that we’re paid a percentage of ad revenue, and I can’t disclose specifics. Compared to nothing, it’s welcomed cash. But it’s far from enough to live on.

For sure, some creators are doing well with sponsored gigs, DVD sales and rare television contracts. I’ve managed to augment my income by creating sponsored videos, and have done fairly well in the past 6 months. But it’s certainly not enough to quit the day job, and I’m not patient or risky enough to hold my breath for a lucrative television contract.

Solution 1: Pay for Content?

With few exceptions, viewers don’t yet pay for amateur content. This is especially true for early adopters of online-video, who have enjoyed free video, including amateur stuff, copyrighted material via YouTube, and free movies & music via P2P sharing. As the mainstream audience moves in, the market for paid content will increase, but mostly for professionally produced and well marketed video. Perhaps we’ll see a third-party aggregate some second-tier amateur content and develop a paid subscription model (especially if that content can be fed into PC, mobile and television). However an individual amateur would inarguably lose the vast majority of their audience if they required the audience to even move to an alternative channel (their own ad-supported site) or charged for it. Even Howard Stern lost most of his audience when he moved to Syrius. So it’s no surprise that I’ve sold only four copies of the “Best of Nalts” DVD.

Solution 2: Ad-Supported Content

As much hype as we’ve seen about consumers avoiding ads, this is the most viable, sustainable model. Simply put, good content won’t sustain for free, and amateur content hasn’t a prayer unless it’s supported by ads. Currently, this model is rate-limited by two sad realities. First, advertisers have been slow to buy ads around amateur content — even YouTube doesn’t appear to be selling its full inventory of InVid (overlay) ads. Secondly, there’s not yet broad enough distribution of this content.

I’ll argue that good video content and consumer demand exists, but people there aren’t yet enough viewers of amateur content to warrant significant dollars from advertisers. And we’re in dire need of an easy vehicle to view UCG via our mobile and television boxes, which will increase both viewer demand and advertising inventory (my next post will explore web/TV devices, which I believe are the lynch pin here).

advertising, book, Future of Online Video, Making Money, Making Videos, marketing, Online Video, popular videos, YouTube

Diet Dr. Pepper Cherry Chocolate Wins Our “Viral Video Marketer of the Year Award”

February 14, 2008 Nalts 14 Comments

Well actually WillVideoForFood doesn’t have a “viral video marketers of the year award,” and even if it did, we’d wait until December to give it out. Still, this “Cherry Chocolate Rain” video sponsored by Diet Dr. Pepper’s Cherry Chocolate is a near perfect case study on smart online-video marketing.

First, it leverages the viral fame of TayZonday, who sprung to viral fame with his deep voiced “Chocolate Rain” (more than 14 million views on YouTube).

Proof of the viral-video campaign’s strength is in the (chocolate) pudding…

TayZonday cost relatively little relative to typical CPG ads (but probably wrote the biggest check the unsigned 25-year-old musician will ever cash).
The brand identified a producer/director to help the singer, but gave creative freedom away… and kept the branding to a bare minimum. Had the branding been more overt, the pass-along would have dropped precipitously.
The spot is funny, self-deprecating, transparent, tantalizing, and engaging. It includes music, pretty women, a bedazzled amateur with talent, and chocolate being tossed on squirrels.
This same video posted by Dr. Pepper (instead of posted on TayZonday’s popular YouTube channel) would have been viewed maybe several thousand times at best, but it’s already up to nearly 3 million views since its November launch. By comparison, my most popular video was 4.5 million views and not sponsored. That view count is quite rare for a sponsored video — if each view is worth a nickel or dime to the brand, the program has probably paid for itself already.
More importantly, it’s been featured on television which is equally rare for an advertisement. This alone probably justified the moderate cost of the program, and in fact may be worth more than the viral view.
Check out the Google search results for “cherry chocolate dr pepper.” The video outranks the Dr. Pepper website, where a visitor will fumble through a bloated flash interface before finding the Diet Dr. Pepper Cherry Chocolate page and not even find the video (an intentional move). So the brand has a better experience now for curious consumers.
While a few criticized TayZonday for “selling out,” most of us were happy to see an amateur capitalize on his talent. It’s a bit long for my taste, but it made me smile and made me aware of a brand I didn’t know existed until now (despite the fact that Diet Dr. Pepper is my second favorite drink after Diet Mountain Dew). Say, that reminds me. The Mountain Dew site is pretty cool, but they sure could use a viral video about farts.

advertising, Blogs on Video, book, Future of Online Video, marketing, Online Video, Video Advertising, Video Business, YouTube

Ad Blindness and Online Video

February 14, 2008 Nalts 4 Comments

The more we surf online video the more savvy we become about content versus advertising.

A marketer recently told me he was pleased by the impressions he got from a YouTube homepage advertising buy, but…” I finished his sentence for him.. “your featured video didn’t get a lot of views.”

I told him we’ve been trained that the YouTube featured video is an advertisement, and he said he was working on ways to produce a more provocative headline or thumbnail. This “learned ad blindness” (I just coined that) was true with Revver ads, where virgin viewers would click the end-frame ad out of curiosity while the regulars learned to move to the next video. Revver is now adopting overlays jam packed with what appears to be Google Adsense Ads. Meanwhile, Adsense itself is under performing. Jason Lee Miller of WebProNews wrote recently about performance declines of Google Adsense, and one of his theories is:

“People are ignoring ads at a higher rate, and this has been evidenced by eye-tracking studies, especially when the ads appear in the places they expect them to appear.” (Note: to reinforce Miller’s point, I’ve displayed an image tracker of where eyes go when viewing a Google search-results page… hot in the top of organic area and rather cold on the ads).

So what’s the solution? Is it constant rotation of ads so they masquerade as content or perpetually innovative ways to interrupt, arouse or tantelize? YouTube’s “videos being watched right now” is a combination of sponsored videos and popular ones. They’ve changed the name of this section several times, but I believe it remains an advertorial blend.

That’s not the answer long term. Your most trusted sources of media (television, print, radio, web) usually make it abundantly clear what’s an advertisement and what’s content. Google pioneered this delineation by giving a color to ads while some engines continue to advantage advertisers in the “organic” listings with something called “paid inclusion” that creeps me out. The “advertorial” game, where advertisers sponsor what appears to be objective articles, is for the bottom feeders.

My first job after college was for a small Georgetown newspaper where the editor literally put a small white fence between the editorial and advertising department. I proudly stood on the content side, and the newspaper went bankrupt in 9 months. It was what prompted me to attend business school and move to the marketing side. I’d need to shower more frequently, but I’d at least have some control of my destiny.

The solution to “learned ad blindness” (copyright Kevin Nalts) is making ads that appeal to viewers and targeting people based on relevancy. If I’m in the market for a car, I want your car ad. If I’m not, it better have dancing clowns, hot models and site gags. If watching videos about the new overpriced talking parrot toy in late November, I’m probably ready for a 20% Toys-R-Us ad. See my next post (Cherry Chocolate Rain) for an even better example of when advertising does indeed become content.

Initially advertisers were terrified by technology that would block ads — from FireFox plugins to TiVo remotes. I’d content the greater barrier is the technology of the human mind, which learns quickly to discriminate between valued content and noise.

Like my old boss used to say, “even an amoeba learns by repetition.”

advertising, book, Future of Online Video, Online Video, Video Sites, Viral Video, YouTube

Do Marketers Understand Online Video?

February 11, 2008 Nalts 7 Comments

So it’s been a week since my last post. I’m rusty. Yet I’m down in Florida at the iMediaConnection Brand Summit, and the theme is “Turning Advertising Into Content.” I simply love that tagline, and quite possibly may steal it.

The event is packed with marketers from some of the largest names in the world — Coke, Best Buy, Bank of America, AOL, Cadillac, Martha Stewart, Target, Microsoft. Thank GOODNESS nobody is here from USAirways. The 6th best-rated video of the day on YouTube is my story of the horrible flight I took down here last night.

Highlight was meeting the guy behind the YouTube promotions for Intuit. We’ve all seen the Quicken tax ads (from the raps to the recent comedy contest), and it was fantastic hearing about how Intuit’s approach has evolved. Today is the one-year anniversary of the tax rap program, and obviously YouTube has grown a bit since.

To give you a sense of how much variance there is among marketers, I’ll contrast a few comments from marketers. On one hand, we have Intuit — the first brand I’ve even heard acknowledge (without any prompts from me) the value of promoting through creators who have established audiences. On the other hand, we have some eMarketing “administrators” that believe they’re exploring online video because they have video testimonials on their website.

The world is changing quickly, and Brad Berens (iMedia Communication) did a charismatic opening that allowed participants to vote on remote devices. I was encouraged to see that both agencies and vendors expect their television and print budgets to migrate online rapidly in 2008. Jeff Rayport (Fonder of Marketspace, LLC and former Harvard professor) gave a fascinating keynote that set the bar high.

Tomorrow I’ll be on a panel titled “The Golden Rule of Consumer-Generated Advertising: Know Thy Ad Creator.” If they videotape it I’ll post it. I usually take a camera with me on the panel, but I’ve yet to post a video… it’s not very entertaining to see me rambling about marketing. Maybe tomorrow I’ll fart audibly. That should make a good video.

advertising, Blogs on Video, book, Future of Online Video, Making Money, Making Videos, Online Video, popular videos, Video Advertising, Video Business, Viral Video, YouTube

What Should a Viral Video Cost a Marketer? (Killer Post)

January 26, 2008 Nalts 17 Comments

“The price of a thing is the worth it will bring.”

I love that quote, but the reality is that “viral” video pricing has been less about worth and more about cost plus.

If anyone should know the “fair market price” of a viral video it should be I — or me (depending on which one is grammatically correct, and I really don’t want to know, because I don’t plan on framing a sentence that way again).

After all, I interact daily with brand marketers, big and digital agencies, and video creators. Yet prices range irrationally, and the market is in desperate need of guidance. This post is a long one because this is a complex and important issue to brands and creators. I really should clean this up, and adapt this for one of the advertising and marketing trade magazines.

Nalts Discloses Fees
Let me disclose my own fee structure and hope others will do the same. I initially was happy with $1,000 per video (for Mentos and some of my early work), but soon discovered my hourly rate computed to less than minimal wage. And I was juggling more work than I could handle with a day job. I also didn’t want to junk my YouTube channel with excessive sponsored videos, which alienating my subscribers (especially since many resent YouTube’s InVid ads, which produce far less income for me than sponsored videos).

Now I’m pricing between $3,000 and $10,000, but there are a few reasons I can price this way:

I have a decent track record, and fortunately more demand than time.
I have a steady audience on YouTube so most of my videos will get at least 20-40,000 views.
I have a marketing background, and provide strategy and a creative brief before diving into the video.
I try to produce several videos so a brand can amortize the cost (and generally I get some efficiencies out of a series).
I have gobs of debt (hey, just keeping it real here).

How Marketers & Creators Find Each Other
There are, of course, plenty of video creators who can perhaps do better videos for less money. I have developed a network of specialists that can, for example, do a great score, logo or animation very inexpensively. But I haven’t yet discovered a good “business exchange” site where advertisers and creators can find each other (viral video could use its own eBay, Craig’s List or Match.com). I’ve thought about starting one, but it is labor intensive and not something that automates well without significant volume. And I don’t feel like being the “viral video” middleman or talent scout.

Xlntads (with whom I consult occasionally) is approaching that model because hundreds of creators have registered and sometimes partner via the site (a director and a musician team up for an ad). A brand can generate a variety of videos via Xlntads without hunting down and dealing with individual creators (not to mention multiple contract negotiations). I like that as a marketer, and as a creator I’m happy to work for a smaller fee if I can avoid some of the incredibly time-consuming and frustrating “business development and qualifying” hassle.

Going from Prospect eMail to Payment
My visibility means most of my clients find me, so I’m fortunately not cold calling (yuck). But there’s a huge cost associated with qualifying something and having multiple phone calls and documents, and some of these go nowhere. I probably ignore valid opportunities because I miss an e-mail, or it reminds me of a previous discussion in which I invested time and energy understanding the brand, building a creative brief, proposing video concepts… then the agency or brand inexplicably “went dark.”

More importantly, many video creators have no interest or experience in selling their work, and simply want to create something for a modest profit. Historically, I don’t charge until I make a video, and yet much of my value occurs earlier and I’ve been giving that away naively.

Project or Retainer Video Consulting
As of this post, I’m moving to a flat-fee model where I charge $250 an hour (or a discounted day rate) to: understand the brand’s goals, conduct some informal research of their “space” in online video, build or adapt a creative brief, and present a series of video concepts. This initial fee will help me qualify clients and provide better service initially (as opposed to scrambling together a few weak concepts 10 minutes before a conference call). Then I’ll scope and price videos separately. This seems fair, since much of my value is in the initial phase, and the fee justifies my time and makes me a partner instead of a video production guy desperately pitching a few Nalts videos in hopes that I haven’t wasted my time. If I’m not right for the client’s production (or if I’m swamped) I can refer it to other creators.

As a marketer, I’d maybe prefer to pay upon completed video, but I am accustomed to paying for my agency’s time by the hour (and usually at a rate that far exceeds $250 when you burden it with overhead).

In 2008 (recession or not) companies and agencies will need marketing/video expertise, but can’t justify a full-time employee until this space matures. Do you remember what smart agencies and clients did when paid-search was emerging as a discipline? Rather than hire a firm with overhead or pay a full-time employee, they tapped specialists who were compensated for their objectivity, expertise and time. My career goal is to move from corporate marketing to online-video consulting retainers for a few companies and/or agencies. But don’t tell my boss yet. 🙂

Various Creators. Various Fees.

There are a number of video creators that do work for hire.

Some are simple and some are complex teams with expensive budgets.
Many are brilliantly creative but couldn’t market their way out of a paper bag. Others are sound marketing strategists that suggest creative concepts that make you cringe inside (I need to start documenting some of these because they’re so unfunny they’re funny again).
I’ve known brands that have spent $250,000 on a series of 4 short viral videos (not kidding), and I’ve known brands that have done almost the same thing on a shoestring $5K budget.

As a marketer, I tell people to keep their costs down since there’s no guarantee the video will pop. As a creator, of course, I want to profit from my work and want the same for other amateurs.

If you make online videos, please feel free to pimp yourself below- as long as you provide some information about your pricing.

“Fixed” versus “Variable” Payments
Should a marketer pay for a video, or pay the creator based on its viralicity? I have a strong opinion here, but I need to first explain why I cringe at “per view” payments. A view isn’t a view. Views can be manipulated in various ways – I don’t know how the “viewer robots” work (and don’t really care) but I assume they replicate a view by refreshing a video in intervals using various IP addresses. Most sites are developing safeguards against this, and counting only true views as those that last more than, say, 30 seconds. I’ve notice my view count darts to 200 and then stops for a while before it reflects that actual views. Presumably someone is validating the view count before it’s reflected accurately.

Any video site can fudge the view counter and it would be hard for a marketer or creator to know otherwise (candidly I suspect some of the second-tier sites are manipulating view counts to make the site look popular for visitors and advertisers).
“Auto roll” is another way to manipulate views. My YouTube profile page has a feature where the video plays automatically on the unwitting viewer, which gives me the ability to get any video thousands of views pretty quickly.
Even a real view isn’t always the same as a real view. Why do we pay different CPMs to media properties? Because some are worth more than others. If I do a video highlighting a U.S. hotel chain, it’s going to be worth much more to my sponsor to have that viewed on a travel blog or golfer website than on Break.com by a 14-year-old kid in Russia. It will be years before we can target views by demographics, so we assume some degree of waste.

As a video creator I’d prefer to be paid for my time and creativity, and not be gambling on the video’s popularity to find out if I’ve made $4 an hour or $7. As a marketer I don’t want to inadvertently reward the creator to junk and manipulate views. And even if I “capped” the view incentive, it’s a pain on my budget system to hold a reserve. Try explaining to the folks in finance why you’ve set aside $20,000 in case your video gets popular.

Pay for Seeding
Finally, there are two distinct costs associated with videos. First is the “creative” cost, like producing an advertisement. Second is the “promotion” cost of getting it viewed. While that can involve direct media fees (paying a site to feature a video), this is typically a retainer-based service that involves a person or agency seeding the video and reporting on views. Generally this is a temporary retainer since most of the views will take place in the first 30 days (I’m over simplifying this, but I wouldn’t hire an agency to report on my viral video for six months if each bi-weekly report was changing by .2%). After a few months, you move on. There are a few creators that have mastered this art, and a few agencies that are claiming it but have no idea about how to do it well.

This, like public relations, is a difficult thing to sell. But rest assured that “earned” media (locating a relevant blogger and asking them to post your video) is more targeted and effective than paying to flight crappy preroll ads. My recent Mac Spoof went well past 200K, and we’ll never know that’s attributed to the timliness and humor of the video itself, or the few e-mails I sent to Mac blogs (which took about 5 minutes).

There’s an art and science to video seeding, and it’s often done inappropriately. But it’s a vital step, and I believe this will spawn a cottage industry that eventually gets consumed by big agencies, interactive shops or PR firms.

A lot of information here, and I look forward to reading the comments. I hope this spawns some discussion about this important topic. We’ll set up a forum for it too.

Will Video for Food