Online video content is regressing to an earlier stage while other content advances, and that spells opportunity for savvy marketers.
A very big part of my job as CEO is to identify what the future holds for not only our company and clients but also our industry. Almost nothing in this industry is changing as fast as the face and format of online video content. The change has been so rapid that we actually have to plan not only for the metaphoric tomorrow but for the immediate, real tomorrow. I've often found the best way to plan for the future is to look at the past.
Let's look at the evolution of two other media, television and video games, for clues to where online video content is going and what it may mean for us advertisers.
Stage 1: Simplicity
Television began simply: one camera, one set, and a limited number of actors. Video games had similar, humble beginnings: two bars and a square. Online video, however, was a bit more ambitious, aiming to quickly put lots of content online. But connection speeds weren't good enough to create a positive experience for the consumer, and growth stalled. While the curiosity was enough to fund growth, capabilities weren't enough to deliver mass audiences.
Advertisers found their way to early television with individual, recurring program sponsorships, keeping things nice and clean. Video game technology limitations prevented advertisers from getting near them. Online video? A clear case of opportunism -- advertising anyplace it could fit. Buttons, pre-rolls, post-rolls, and banners coming together to create a completely cluttered experience that didn't quite catch on with advertisers.
Stage 2: Complexity
Television programming evolved to be technically more complex. "I Love Lucy" pioneered a multicamera, multiset approach, giving much-needed plot and character depth. Many years later, console video games witnessed similar maturity once better-looking side-scrolling platform games like "Pitfall" and, eventually, "Super Mario Bros." hit the scene. Online video began to mature beyond repurposed television content with linear soap-operas, animated series, and other content meant to earn repeat visits to progress through a storyline.
Television commercials diversified as audiences grew. Video games still weren't an advertising vehicle. Online content at this stage lacked sufficient viewership to effectively command advertising dollars, and no other compelling case was made to shift dollars from other media. Most content was distributed at specific destination Web sites that couldn't draw enough traffic. To get those dollars, a distribution model was sorely needed.
Stage 3: Reality
Years later, with game shows like "Twenty One" and ultimately "American Idol," audiences were introduced to the world of reality television, allowing them to get closer to others' emotions vicariously. This programming eventually became one of the biggest pop-cultural phenomena in the last 50 years. Similarly, an explosion of sports games and first-person shooters, like the "Madden" series, "Castle Wolfenstein," and "Doom," allowed audiences to get closer to feeling what it would be like to play in the NFL or wander around with a bazooka. This created legions of gamers spending hours at a time in front of their PCs. Online video exploded when it became easy to broadcast yourself. That doesn't just mean content became easier to create but it also became easier to distribute.
Product placement ran rampant in reality programming, giving advertisers even more ways to reach their audiences. And products finally began appearing in games like the "Madden" series as official sponsors. But here's where the advertising "pause" button in video content was hit. Just as video advertising was beginning to explode in the form of in-page ads and pre-roll before professional content, YouTube burst onto the scene and created an ad-free way to share all the groin kicks and lonelygirl15s you could stomach. Advertisers wanted to stay away from content they couldn't control, and consumers wanted to stay away from content of questionable quality that had advertising impeding its consumption.
Stage 4: Community Involvement
In the last few years, television has given us "24," "Lost," "The Sopranos," "Heroes." These series and many others with intertwining characters and plots reward repeat viewership by providing more questions than answers, prompting audiences to gather in communities (virtual or physical) to discuss potential outcomes. Video games have gone online, rewarding audiences with unexpected outcomes at every turn, as game play depends on how other players behave. This may be where the media diverge. Online video hasn't achieved this stage yet and may likely return to stage two's episodic content -- done better and more professionally. An influx of talent to the online video world is likely, which could yield bona fide hit programming. Meanwhile, social networks are growing exponentially, creating new distribution channels (e.g., MySpace's new video announcements).
Television advertising has taken many forms in this stage, including exclusivity, product placement, and heavy spot rotation. Video games have entered the world of dynamic ad serving, allowing advertisers to insert ads within gaming experiences without them being built into the game. Online advertisers are still trying to figure out how to advertise to communities and to advertise to consumers in a way that empowers and encourages them to advertise on their behalf.
Is online video content regressing to an earlier stage while other content advances? Yes -- and it's for the better. Online video content, with its lower production costs, easier distribution, and interactivity potential, may change how we consume content in general, doing it better the second time around. It's likely that within the next year, we'll begin to see community-created content that changes as more people get involved or contribute their own content. And savvy advertisers will figure out how to underwrite them or be otherwise involved.
Keep your eyes on this stage -- it's going to get interesting.
Meet Ian at the ClickZ Specifics: Advertising in Social Media seminar on May 21 in New York.
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Ian Schafer, CEO and founder of Deep Focus, consistently redefines the way entertainment properties are marketed online. Ian founded Deep Focus in 2002 to bring a holistic suite of interactive marketing and promotional solutions to the entertainment industry. The company's clients include America Online, Dimension Films, HBO, MGM, Nickelodeon, Sony/BMG Music, 20th Century Fox, Universal Music Group, and many others. As former VP of New Media at Miramax and Dimension Films, Ian was responsible for their most popular online campaigns. He's been featured as an expert in online entertainment marketing and advertising in numerous media outlets including Variety, The Hollywood Reporter, Advertising Age, and CNN.
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