By Brad Howarth
Alan Perrins never set out to be part of a revolution. He simply wanted a better way to explain the workings of his business, The BEAN Machine. But by engaging the production company BizTube to produce a low-cost one-minute video for his website, Perrins joined the early adopters of the internet’s new killer application.
Sparked in part by the rise of YouTube, and the realisation that online video does not need to meet the same production standards as television, companies all over the world are promoting themselves using video more effectively than they could through words or pictures.
“Video shows a lot more than a static website or a flyer or a telephone call,” Perrins says.
It won’t ever win an Emmy, but Perrins says the video clip is useful for explaining his company’s Coffee Pod portable coffee-vending machines to potential clients and local councils. He says creating the video was more cost-effective than producing 1000 high-quality flyers for direct mailing.
The growth of video online has resulted from a combination of both the falling cost of digital video production equipment and the increase in penetration of the broadband connections needed to watch it. Numerous companies have emerged offering low-cost production of standard video formats. For less than $2000 businesses can have a short video produced for the web.
And it’s not just small companies that are benefiting. Larger companies are combining their familiarity with television advertising with the internet’s ability to better target consumers.
The group operations manager for Sensis’s MediaSmart Group, Rob Manning, believes that online video will further accelerate the already rapid growth in online advertising.
“One of the things that has kept the fast-moving consumer goods companies out of the [online] market is they haven’t had the ability to properly target the audiences that they wanted, nor have they been able to reach them with rich messaging in a way that they can now,” Manning says.
According to Nielsen/NetRatings, 36% of Australians have downloaded video, while 33% have “streamed” content across the internet. The question now for websites and advertisers is how to make money from that activity.
The managing director of Insomnia Marketing & Communication, Mellissah Smith, says video is clearly the hot area among her clients, and is frequently being used in direct marketing campaigns. Smith also sees strong potential for video in press releases, particularly in fashion and consumer brands.
“Our clients are looking at it as part of the integrated marketing mix,” she says. “And it’s allowing companies to tell messages more often, because of the ability of having a camera on your desk and saying a message and putting it online. It can be done in a matter of minutes.”
In one instance, a direct marketing campaign using online video produced a 93% response. “That’s enormous – where else can you get that sort of response?” Smith asks.
For many advertisers, the entry point into online video is simply to put their existing television commercials on to their website.
But the managing director of Sydney-based online marketing company Bullseye, Jason Davey, says online video is better used in contextual placements that match the other content that the consumer is looking at. He points to a study by Viewpoint in the US that measured the responses of 4000 web users to campaigns run by four advertisers, where the “annoyance factor” associated with video advertising was only 26%, as opposed to 57% on television.
Davey says video also holds great potential for allowing consumers to interact with the advertising they are viewing, such as clicking on a link to request further information. He says the interaction rate for video advertising is around 8% – much higher than click-through rates on banner advertisements.
“Video is a very emotive medium, and online allows you to extend that, and perhaps take part in and direct the narrative,” Davey says. “With our clients, if we know that there is a film shoot happening, we will typically work with them to make sure they shoot some footage specifically for online, and we can consider how to repurpose footage before it is shot.”
In the case of the health food company Blackmores’ sponsorship of the Sydney Running Festival, Bullseye used video blogs to show the training regime of high profile athletes.
Further, sites such as YouTube have led consumers to accept lower-quality images, although Davey says it is important that the quality of the content itself remains high. For its work with the Sydney Aquarium, Davey says Bullseye used lower-quality equipment than it would if making a television commercial.
“The production cost of actually producing video is lower than television advertising but higher than banner advertising, so there is a slow swing towards that as bandwidth levels increase and as digital advertising budgets increase as well,” Davey says.
The rise of video also has implications from the perspective of how search engines find and rank sites. The director of search engine marketing company PayPerClick, Stephen Murphy, says sites video clips must be properly titled and tagged so that search engine crawlers can find and categorise it.
He says Google’s universal search is also capable of returning video and audio files in addition to simple web pages, improving the chances of video content being seen.
“Humans can process images a thousand times faster than words, so what we are seeing in search engine result pages is that if you have an image that represents a video clip in the search engine results, even if it has a lower ranking, people’s eyes are fixing on the image much more so than the top rankings,” Murphy says.
The interest in online video is extending all the way through the marketing realm. The chief sales officer at Yahoo!7, Markus Barnikel, says that for the past few months almost every conversation with agencies or clients has involved video.
“We’re seeing agencies creating video especially for online, because they can play around with formats and length,” Barnikel says. “And that’s happening more and more, and will be the next step.”
The growth of online video has also presented new opportunities for television networks. The general manager of digital media at Network Ten, Damian Smith, says that online video is a key priority.
“It’s a lot easier for a broadcaster to come to grips with online video than it is with certain other types of online content,” Smith says. “This is the part of the medium that our traditional advertising base is most likely to be comfortable with, because they’ve invested in video advertising for many, many years, and a large part of their hired or agency infrastructure is really set up about video-based advertising.”
Smith says Ten cannot reveal the contribution online video will make to the network’s revenue. “But what I can tell you is I have a business plan that calls for this business unit to be a significant contributor to revenue and profit within the next five years,” he says. “The bottom line is we think we can make money out of it, and we think we can be a sizeable contributor to Ten’s overall revenue and profit.”
Tips for making the most of online video:
- The quality of the message is more important than the quality of the footage
- Ensure that the content suits the context that it is being presented in
- Keep it short – no more than 60 seconds
- Don’t be ambitious – sweeping pans and zooms do not translate well onto a small video window at low quality
- Use colours and images that capture the casual viewer’s attention
See more on marketing plans such as database management marketing, or our Growth Resources section on Marketing and Sales.
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