Brands are slowly getting to grips with online video advertising, but there’s still much to learn about what content and formats work best, finds Nicola Smith.

Earlier this year, over 70% of respondents to a survey by Burst Media of more than 2,500 people said they watched online video content, with 33% citing advertising as the most popular content to view.
Online video presents a vast opportunity for advertisers. As Helen Bradshaw, national media manager at Peugeot, says: “We can’t afford not to use it; it clearly works.” But working out what works best in a fast-changing environment dictated by fickle and demanding consumers is an ongoing battle for brands.

As Sky has found, incorporating an interactive element into online video advertising is increasingly important. “People want a degree of control over what they’re doing - YouTube has trained them to expect that,” says director of online and partner marketing Scott Gallacher.

Sky has just created some bespoke ad content for Gladiators based on this principle, in the form of an online video game. “The video was specifically shot for the ad and allows users to virtually fight one of the gladiators online in an MPU,” says Gallacher. “It allows us to marry the richness of video with interactivity.”

Renault has promoted its Mégane and Laguna models via online video advertising this year and also sees interactivity as an essential ingredient. It recently worked with Lycos and media agency Carat to create a video ad where users could click on hotspots to see more information about aspects of the cars.

“We saw a very high view-to-interaction rate,” says David Isherwood, Renault’s manager of digital and interactive campaigns. “Click-through was lower than we’d expect but, impressively, nearly half of those who did click went on to satisfy the call to action of the ad. The results suggest that click-through rates will suffer using this format but that it attracts a solid level of interaction.”

The fact that the automotive sector doesn’t rely on impulse purchasing, instead investing in a lengthy sales process with its customers, is one reason Bradshaw believes the industry is less adventurous than other sectors in its online video forays. But it is learning. Peugeot has recently partnered with film and TV clip site BlinkBox, which Bradshaw calls “engaging” and “innovative”, but she reco gnises that “being on there with something dull is worse than not being on there at all. You have to be creative, but it’s always a test, a leap of faith.”

You have to be prepared to learn the hard way, she adds. “We’ve created a couple of online video games in the past that people just haven’t reacted well to. We learned that we need to make them more engaging, more quirky and more interactive.”

Enticing users to interact with online video ads is a gradual process as they’re educated about what to expect, but Boots is already seeing encouraging results. It recently worked with video technology specialist Coull and web portal Lycos to convert a standard 30-second TV ad into an interactive unit that let users get involved. Every object in the video was interactive so users could find out m ore about the product by clicking.

Poor transfer

The growing demand for interactivity in online video ads may cause certain problems for brands that rely heavily on repurposing TV footage. To date, companies have been able to make it work, as with Audi’s recent work with agency GT to repurpose infomercials originally created for its Audi Channel and run them as a series of direct-response ads on motoring sites.

“We cut the videos down from 60 seconds to 15 seconds and they sat in user-initiated expandable ad formats,” says Chris Hawken, head of brand communications at Audi. “The ads were designed to be direct response, so we experienced really strong click-through rates but low dwell times. Many people clicked within the first five seconds. In this instance repurposed content was very effective.”

The film and TV industry is also well-positioned to repurpose TV footage. As Heath Tyldesley, director of interactive marketing at Paramount Pictures International, says, it will use TV footage in most of its mainstream online video advertising because the short-form content of between 5 and 30 seconds suits the medium. “Given the fact that we have broadcast-quality viewing opportunities, a piece of TV media is relevant online as well,” Tyldesley says. “We have had good success with that and I imagine we’ll continue to work that way.”

But Lycos’s Smith is conscious that growing demands for interactivity may make repurposing more difficult. “Very few TV ads are built in a way that makes interaction possible,” she says. “We’re normally given a TV commercial, which isn’t always suitable for online. A lot of brands want to jump on the online video bandwagon regardless of whether the brand, or more importantly the TV ad, is suited to the online environment.”

Renault’s Isherwood also acknowledges the issue. “So far our TV ads have leant themselves well to adaptation for online, but we recognise that, depending on the nature of the ad and the need to edit a small section of it, this won’t always be possible,” he says.

Unit trust

Learning about online video ad formats is arguably easier and cheaper as these can easily be tested and changed mid-campaign. Brands are still playing with the options, but MPUs are widely deemed to be a winner due to their simplicity. “It’s an effective format that integrates well into entertainment and movie pages and tends to showcase our content with immediacy,” says Tyldesley. “It doesn’t ne cessarily have broadcast-quality impact but is certainly very high quality.”

Sky’s Gallacher is also a fan. “MPUs are one of the most amenable formats for video content,” he says. “We’ve experimented with other formats, such as skyscrapers, but MPUs tend to be the easiest and deliver the best performance.”

Boots’ experience suggests that consumers increasingly don’t like to be passive viewers. It’s one of the key reasons behind the explosion of video-sharing sites, where users can control the content. Sky has used more than 20 such sites to promote the US Open Golf and the Twenty20 cricket test, seeding humorous footage of golfer Ernie Els being bowled out and cricketer Kevin Pietersen chipping out of a bunker.

Gallacher says Sky will continue to use the platform for content that already has a level of brand awareness. “We’ve tended to use the sites for short snippets of information that people already know about. So far we’ve only measured it on views, but in future we’ll link back to the site and monitor the traffic.”

Its trials have also taught Sky another lesson. “There’s a lot of work that goes into tagging and making content searchable. The difference between success and failure is making sure people can find content easily,” says Gallacher.

Last year YouTube introduced Flash overlay advertising, based on testing that found overlays to be more successful than pre-rolls. It supports some brands’ scepticism about the long-term future of pre-rolls. Tyldesley says, “I hear reports that pre-rolls are tolerated at the moment but I wonder how that will be managed in the battle between user-initiated and forced content.” Paramount is certain ly exploring opportunities on user-initiated content sites, recently working with Mediaedge:cia to create a branded channel on YouTube to support the cinema release of comedy Strange Wilderness.

Richard Stanton, digital account manager at media agency Universal McCann, is also unsure about the future of pre-rolls. “People are reasonably receptive to pre- and post-roll ads, but on most sites you can’t skip through pre-rolls so I think we’ll start to see consumers’ opinions changing.”

He also believes that the increase in advertisers wanting to run pre-roll ads has grown disproportionately to the increase in quality video content. “Video search engines like Blinkx, which we work with, are helping by aggregating video content, but this is likely to be a significant challenge for us in the near future as the novelty of pre-roll wears off.”

Surely the willingness of consumers to have their online viewing experience interrupted depends on how targeted and creative the content is and the nature of the brand? For example, Gallacher isn’t a fan of pre-roll, mainly because it can be seen to devalue Sky’s core product. “We have a lot of content that people are passionate about and want to watch, so we try to use it as a centrepiece rather than tagging it onto other content. We tried pre- and post-roll before and it didn’t work as well as our other stuff,” he says.

Conversely, Peugeot enjoyed success with its online pre-rolls to support its sponsorship of the Rugby World Cup last year. “We ran 10-second pre-rolls on a range of sites including ITV.com, automotive sites and a range of portals,” says Bradshaw. “We had strong content that was also humorous [a bunch of rugby fans driving around France singing Kenny Rogers’ ‘The Gambler’], which helps. I always t hink pre-roll is effective because it’s less intrusive than an overlay and better than an MPU because users are requesting a piece of content and you have their attention immediately before.” The ads reaped over three times the expected results.

Terms of engagement

Yet results and measurement are another key challenge facing brands in this embryonic industry. As companies strive to achieve customer engagement, perhaps the biggest obstacle lies in the lack of any definitive measurement of what this actually means.

Bradshaw says that engagement and its measurement are heavily dependent on the type of campaign. “If you do a branding campaign, measuring leads isn’t a relevant metric, so you’d use impressions, but they don’t really tell you anything. If you have a view rate on a piece of video advertising and a click-through rate that shows people are engaging with the creative enough to play a game or watch a clip, then they’re interested in your brand, which means they’re engaged.”

Gallacher takes this one step further. “Engagement is someone offering to have an ongoing relationship with the brand off the back of an ad. We’ve seen that with our Facebook Gladiators group, which has 200-odd members. People saying ‘I’m a fan of this’ is a true measurement of engagement.”

For onlookers this is an exciting and intriguing time; for brands fighting the online video ad wars at the frontline, though, while battles are certainly being won, the war, it seems, is ongoing.

Quick Facts

1. Online ad spend in the UK in 2007 came in over the £2.8bn mark and was up 38% up on 2006
2. Total internet display advertising spend saw a 31% year-on-year increase in 2007, while the core formats - banners, skyscrapers and embedded rich media including video - grew by 45% to £592m.
3. Spend on embedded formats has doubled during the past two years to account for 79% of total display (all figures from IAB/PricewaterhouseCoopers, April 2008).

Click here to see the article on the NMA web site.

This study delivers clear evidence of just how powerful and effective the TV and online combination is. TV and online are perfect partners and the study urges advertisers to recognise the greater impact  they can have if they use them together.

TV benefits from the way online offers a means of expressing and exploring the desires and motivation TV creates. Online usage is not displacing TV viewing and it is time to celebrate the complementarity of these two most powerful digital media.

The study also reveals that “tech-savvy” population regularly go online while they are watching TV, enabling instant online response to TV ads.

Click here to read the full article.

Irfon Watkins, CEO at online video company Coull and chairman of the IAB Video Council discusses how brands can monetise video in a competitive and social media driven environment.

If implemented and managed well, interactive marketing can be the most effective (and cost effective) way of not just raising brand awareness, but also resonating with your audience, creating brand loyalty and driving sales. Video is almost certainly a key area that social networks, publishers, brand owners and advertisers are looking to increase awareness. We are likely to see this trend steadily increase throughout the rest of 2008 and into 2009.

Forrester estimates that US online video advertising alone will be worth in excess of $7.1 billion USD by 2012 which represents a 72 per cent increase whilst interactive marketing as a whole (of which online video is a huge component) will more than triple to reach $61 billion by 2012.  Forrester also predicts that budgets for interactive marketing will grow from 8 per cent of all ad spend to a very significant 18 per cent.  It’s safe to assume that similar growth will be replicated here in the UK.

Moreover, as online video grows in popularity among consumers, advertisers are also seeking new and creative ways to reach this key audience in a non-intrusive, fully interactive manner. New rich media ad formats continue to be developed that are integrated within a streaming video, do not interrupt the viewing experience and match to the most relevant content in non-intrusive ways.

As consumers flocked to user generated content (UGC) sites such as YouTube and MetaCafe, the most obvious conclusion was to place “pre-roll” in the videos – and this seemed to offer a solution for UGC sites who were struggling to return a profit to their investors.  Now, “pre-roll blindness” is hot on the agenda where users are ‘seeing’ the advertisements, but they are not ‘seeing’ them, certainly not connecting with them on a deeper level.  Pre-roll is often seen as disruptive and intrusive and the challenge for both publishers and advertisers is creating compelling videos to communicate that will be on-brand.

We are seeing traditional production companies snapping up the rights to online video content, such as ShineReveille recently taking on MySpaceTV content to distribute to traditional media outlets such as television and DVD; the reverse being broadcasters such as The BBC and Channel 4 distributing their content through platforms like Bebo and YouTube.

Brands are producing more videos, hosting these in UGC sites predominantly and employing a seeding strategy to increase pick-up, interactivity and longevity of the content.  Video represents more opportunities to communicate marketing messages in creative ways; so we are begin to see this realised on a scale that has taken many by surprise.  We are starting to experience video come into its own finally, although it is still somewhat finding its feet in some quarters.

Social networking sites are monetising their video content through contextual advertising, sponsorship and placement – all of which are passive rather than interactive.  As with all things ‘Web2.0’ a proposition, be it a video, a text ad and/or a widget, needs to be ‘value-adding’ in order to capture imagination and more importantly, retain interest, follow through a call to action and invite recipients to share it with others

Video (until now) has not been particularly interactive, though companies like Coull offer publishers, social networks, agencies and brands the ability to create something special in using video in order to maximise their potential.  New platforms and ad formats have enabled the fusion of consumer created advertising and non-intrusive content with active participation by viewers. This creates one of the most compelling and comprehensive models in the online advertising industry. 

Bebo’s success of Kate Modern (which since it launched in August 2007 has received over 27 million views) is now followed by Sofia’s Diary where key brands are sponsoring the series and paving new ways to connect with users. Brand engagement and monetising opportunities can also be reinforced and married to traditional advertising sales.  Product sponsorship can be married to online video advertising placements that are non-intrusive and reinforce the value of the product.

Consumer-inspired commercial opportunities are a real opportunity to capture monetising opportunities. Online video opportunities allow users to interact with the brand in a more interesting way, access more information about that product and emotionally connect with brands.  Perhaps the ‘Rolls Royce’ of them all is when your target audience becomes your brand ambassador and takes the time out to create an ode to your brand, product and or service - whether this is a mash-up (a video re-mix) or original content. 

When brands embrace ‘consumer power’, involving them in successful ads that are driven by the evolution of video and this translated well in digital environments; you can see how the medium holds the potential to inspire others to capture similar interest.

Click here to read the article on the Mad.co.uk web site.

There are several ways in which social networks can monetise on content, including advertising (product placement, behaviour targeting and contextual), social commerce and, perhaps in the future, mobile.

New advertising formats such as interactive video or rich media formats allow higher engagement rates and do not interrupt the user experience, thereby bringing user engagement to a different level and providing brand engagement and better monetisation opportunities.

Video is a key area that social networks, publishers, brand owners and advertisers are looking to increase awareness of. Traditional production companies are snapping up the rights to online video content. Shine Reveille  recently took on MySpace TV content to distribute to  traditional media outlets such as television and DVD, while broadcasters such as the BBC and Channel 4 are distributing their content through platforms like Bebo.

Brands are producing more videos, hosting  these on their sites and using seeding strategies to increase pick-up, interactivity and longevity of the content. Video represents a unique opportunity to communicate marketing messages.

Brands are monetising their video content  through contextual advertising, sponsorship and placement - all of which are not engaging and interactive. And by placing users at the centre of the online video, new platforms and ad format have enabled the fusion of consumer created advertising and non-intrusive but active, participation by viewers.

The success Bebo has had with Kate Modern is now followed by Sofia’s Diary where key brands are sponsoring the series. Product sponsorship can also be married  to online video advertising placements that are non-intrusive and reinforce the value of the product.

Consumer-inspired  commercial opportunities are a real opportunity to capture monetising opportunities. Online video opportunities allow users to interact with the brand, access more information about the product and emotionally connect with brands.

Perhaps the Rolls-Royce of that is when your target audience becomes your brand ambassador and takes the time to create an ode to your brand, product or service. When brands embrace consumer power and involve them in successful ads that are driven by the evolution of video and how that is translated in digital environments, you can see how the medium holds the potential to inspire others to capture similar interest.

Irfon Watkins, CEO

Coull, Bristol

Click here to see the article on Mad.co.uk web site.

Lycos Network Europe, the online advertising sales network, is using a new advertising format, which allows users to interact with content in online advertisements like never before. The format, pioneered by Lycos with Coull, interactive video advertising tools provider, and media agency Carat, is the first of its kind in the industry The new formats enable users to interact with video content while a film plays.

This exciting format, delivered on the Coull Engage platform, means advertisers can now showcase video content online while, by clicking on product features, users can get more information as details are shown in the unit.

Renault is the first automotive brand to trial the format across Lycos Network Europe and sales network partner site About.com.

Users will be able to interact with Renault’s latest advert, learning more about the standards set by the Laguna in quality, comfort and driving pleasure.

Renault has also staged a complete takeover of the Lycos site, using a “push-down homepage takeover” format. The format enables users to roll-over a banner at the top of a page, which scrolls down, pushing the site content down the screen, rather than covering it. The new Laguna TV advert then plays in the space created by the push-down.

Sam Kayum, Sales Managing Director for Lycos UK, said: “These new formats point towards the future of online advertising, encouraging users to interact directly with content - key in today’s cluttered media environment”.

David Isherwood, E-Marketing Manager for Renault UK, said: “Renault has a long history of incorporating innovation into its product development, so it’s only natural we wanted to be the first car manufacturer to pilot this new technology.

“As a continually forward-thinking company, interactive marketing is an area we are increasingly developing an interest in, and its pioneering technology combined with customer experience fit perfectly with New Laguna”.

Lycos has recently signed up a similar campaign by Nivea, which will use the new format in coming weeks.

Click here to to see the article on Marketingservicestalk web site.

The webmission event has been fantastic. There are some very smart companies here and they are doing the UK proud. However there has been some ill informed comment on some blogs in the UK, see Mike Butchers post here dealing with that. I have no plans to relocate coull to the US, we have a great team in the UK and we will grow that team there. However it would be crazy not to visit a ‘centre of exellence’ and try and pick up best practices.

I would fully support and encourage  Oli Barratt and the team to start organizing webmission09. Well done Oli

Irfon�

the first two days of webmission in San Francisco have been a whirl of social networking. We were invited to the home of Jim Buckmaster, CEO of craigslist and Susan Best from BestPR  on Sunday for Brunch and Cocktails, which was fantastic. Met some very interesting people, worth the trip already! We then headed off to Redwood City in the Valley for a BBQ. It seems food and beer oils the wheels of the web 2.0 community here. No difference to the UK then!

So far the event has been very useful and there are some really good companies here from the UK and the reception from the Valley so far has been great. Just off to the Oracle campus now followed by a tour of Google…..

Irfon

Twenty UK Web 2.0 businesses are going on a charm offensive to Silicon Valley, the home of hi-tech start-ups…

As part of a new initiative called the Web Mission, 20 UK tech start-ups have been selected to fly out to San Francisco, where’ll they spend a week hanging out drinking skinny soya lattes with Web 2.0 luminaries like Bebo’s Michael Birch and representatives from the likes of Google, Facebook and Amazon – not to mention investors who are keen to spend their money on backing the internet’s next big thing.

The idea of the trip, which was arranged by entrepreneur Oli Barrett and funded by sponsors UK Trade Invest, BT, HSBC and law firm Heller Ehrmann, is to show the Americans just how splendid our internet businesses really are – while giving these companies a chance to learn from their US counterparts and hopefully make some contacts that will help them develop faster in the future.

The businesses – which were selected from over 100 applicants – have all been chosen because they have the potential to expand into the US. And there are some impressive companies in there: the list includes WAYN (Where Are You Now?), a social networking site for globe-trotting types; edocr, which makes business documents interactive; Coull, an interactive video platform; and our particular favourite Silobreaker, an online search that aggregates news and provides all kinds of graphical content for additional context (although it did give us a video of The Charlie Goodwin Quartet when we were researching Sir Fred Goodwin this morning).

To be honest, we wouldn’t claim to understand exactly what all of these jazzy web 2.0 businesses do – but we’re happy to go with the opinion of former Dragons’ Den stalwart Doug Richard, a member of the judging panel, who reckons that ‘some of these companies are as good as anything coming out of the Valley’. Let’s just hope that they can follow in the footsteps of Silicon Valley graduates like Google and eBay and turn themselves into global behemoths…

Click here to see the article on Management Today web site.

The advent of interactive online videos gives advertisers a new way of capturing consumer interest. But Irfon Watkins, CEO at Coull, argues that success with this new format requires more than just rehashed TV ads…

Over the past few years, the surge in consumer use of online video has happened faster than many people expected.  According to eMarketer, more than 70% of Internet users viewed online videos in 2007.  Despite this rapid growth, advertisers have been surprisingly slow to develop creative optimised for the possibilities of this new medium.

The interactivity of the web has caused it to stand out over and above more traditional forms of advertising. Consumers can click and interact with content; advertisers can provide immersive, engaging experiences that inspire interest and action.

But this full potential has not yet been realised within online video. The increase in bandwidth and consumer appetite for online video has largely been met by advertisers with standard fare. TV slots are simply re-run online. What was once an engaging, interactive medium shifts down a gear to becoming a one-way, linear form of advertising, much like watching TV, or reading a newspaper.

Online video advertising today demands little more from the consumer than a lean back experience.

But what of the web’s intrinsic functionality? Why can’t a consumer watching an online video do all of the things expected on a standard web page – clicking and interacting with objects and information at will? 

Coull has launched Coull engage to help advertisers answer this very question. Brand marketers and digital agencies can use the online video advertising format to easily create interactive video adverts – enabling unprecedented levels of interactivity and consumer engagement.

The first trial of this new interactive ad format was by Boots, running its ‘Here Come the Girls’ ad across the Lycos.co.uk site. Viewers were able to interact with products during play, finding out more information and clicking through to the e-commerce site to purchase.

Results from the campaign highlight a very responsive viewer base, with 29.3% of consumers interacting with the various products within the video -taking engagement with the Boots brand to another level. The Coull Engage format also drove five times the average play rate for a non-auto play MPU ad.

The success of the Boots commercial has been followed closely with a Renault campaign, now underway, and a first in the automotive industry. The Coull Engage format has again been utilised to allow viewers to interact with the new Renault Laguna advert during play, clicking on objects to book a test drive or request a brochure.

Boots and Renault’s experiences highlight the increased scope Interactive video offers brands scope to engage directly with consumers. Maximising the power of online video to drive deeper brand involvement, customer acquisition and sales.

But what results could be expected from content created specially for this new medium? The emergence of two-way, interactive functionality within video offers a significant boost in creative scope. Narrative and content can be designed around this, creating fresh and different ways to engage consumers and keep their attention.

When TV first emerged, producers largely imitated radio, with presenters talking straight into a camera, with no camera movement or editing. Direction of film was also very limited in scope until the creative brilliance of Orson Welles’ Citizen Kane shone light on new ways to bring the medium to life.

Online video is at a very similar stage. The medium offers creative opportunity not possible on TV or film. As trials by the likes of Boots and Lycos highlight the increased potential for online video, attention will inevitably shift to production of content directly for this new medium. Exciting times lie ahead.

by

Irfon Watkins

CEO

Coull

Click here to see the article on Netimperative’s website.  

FMCG brands have been traditionally slow to embrace online advertising.
A research from PHD and Yahoo, featured on Brand Republic,  revealed that consumer exposure to both TV and online video campaigns led to an 18% increase in purchase intent and a 12% rise in brand favourability compared to consumers who were only exposed to TV advertising. The research shows that “online video advertising can impact on a brand’s marketing objectives - particularly in key metrics such as purchasing intent and brand favourability”.

Online video advertising campaigns are not a mere extension of TV advertising but they can provide added value in terms of brand awareness.