Dara Nasr
Industry Head of YouTube.
A third of web traffic is online video and Cisco predicts that this will rise to 90 per cent by 2013 so advertisers are taking notee. Recent IAB figures show that although all online advertising has grown, video is driving this with 82 per cent year on year growth in the first half of 2010.
In the early part of 2005 YouTube was born, a site created for friends to share clips. . From these humble origins, YouTube has grown: users are now watching 2bn streams a day on the site and they are now no longer merely watching clips. There are full-length shows, live concerts and sports events to grab their attention. When Harry Hill or Steve Coogan’s Alan Partridge debut their new TV shows, they do so on YouTube.
Like other forms of new media, it has taken advertisers a while to crack online video – but this year there’s evidence that they’ve really cracked it. According to Brand Week in the US, Old Spice’s genius YouTube/Twitter campaign has led to sales of their shower gel doubling. Tippex has produced a global impact from a brilliantly interactive campaign which pushed YouTube to its very limit.
Advertisers keen to embrace online video have a range of options. Virals have been a popular way of creating content and seeding it in the hope that it grows. Great creative can provide fantastic results but recent work from Millward Brown suggests that without proper promotion, most of that video will not succeed, instead getting lost amid the pure volume of YouTube’s content.
Undoubtedly the Video On Demand (VOD) market provides the easiest crossover from TV advertising and this is the largest area within video. Pre-roll advertising is continuing to grow and traditional broadcasters such as ITV and Channel 4 have benefited from this hugely. However, this space is changing. The ads are more interactive, driving consumer engagement or click-through which goes beyond pure TV creative.
Buying models are also evolving, giving the user more control over what they see. In the States, VivaKi have run a research project called The Pool which trialed various VOD ad formats, the most popular being the Ad Selector model where the user chooses one of three ads to watch before the content streams.
Similarly, YouTube are launching a skippable ad test where the user can skip the ad if they choose, and the client only pays if the ad is viewed. Both these new formats are priced on a cost-per-view basis which gives the advertiser the benefit of knowing that the viewer saw the ad because they chose to, rather than the ad being enforced upon them or merely serving as wallpaper. These innovations do not replace the traditional CPM reservation model but sit alongside it and perhaps broaden the appeal of pre-roll advertising to a wider group of clients.
Building on that thought, YouTube’s Promoted Video product launched in the UK in 2009 with the aim of allowing advertisers to keyword-target viewers. Again using a CPC model, this marries the search ad model with video. This has been a huge success in the UK with clients including Honda, O2 and Nokia adopting the format. However, this format is not exclusive to large advertisers. SMEs and start-us are using it very much as an entry point into online video advertising.
There has been no bigger success story than Orabrush, a product developed by a retired doctor to treat bad breath. Initially he could not sell the product to retailers so enlisted marketing students to help. Their research showed that 92 per cent of people would not be interested in the product. However the 8 per cent that would represented a huge opportunity. With their help he created a video for a couple of hundred dollars and promoted it on YouTube. Not the most sexy brand but through clever optimisation and relevant targeting, this video has received over 15m clicks and the company has become a multi-million dollar business.
Video will continue to grow in the future not just in popularity but also accessibility. All smartphones have video streaming functionality and we are seeing that smartphones owners are more engaged with and watch more video than those without the high-end devices. Additionally TV sets are now wifi enabled, and they all come with several video apps, allowing viewers to easily embrace VOD from their TV sets.
Online video goes beyond audio-visual advertising; it combines the breadth and reach of TV with the interactivity, creativity and accountability of online. As a result advertisers are now often putting online video at the heart of their plans and the flexibility around formats and pricing provides them with different opportunities for success.
Dara Nasr
Industry Head of YouTube
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