Client interest in video is high and will only continue as budgets shift more into digital.
A recurring theme I am seeing recently across both new business pitches and existing client work is in the use of video in online advertising. Video, particularly for traditional CPG (Consumer Packaged Goods) type companies is a natural channel to market in as it closely replicates the TV experience, while also using some of the same metrics as what they're used to.
In the U.S. right now, just over 52 percent of the Internet population are actively watching video. And 66 percent of advertisers plan to shift at least a portion of their budgets from TV to online video in 2012. They are also planning to shift 20-40 percent of their display budgets to online video this year, according to a recent ComScore report.
Bringing it back to Asia, Nielsen recently put out a "Global Multi-Screen" report where it studied the media habits of online consumers in Asia that found that as many as 4 in 5 (80 percent) viewed online video in the past month, up 5 points since 2010. According to VeNA, the video advertising market in Asia is worth around $1.5 billion and is forecasted at 19 percent compound annual growth over the next four years.
When I look at Japan, Youtube has a 58.2 percent reach of the market, up 41 percent from a couple years ago. And platforms like Gyao, Nico Nico and others are seeing strong growth trends as well. As of this writing, the penetration of smartphones in Japan is hovering around 25 percent, and as this grows, so will video.
The example to the right is the ePlayer module from Perform. They own the rights to major sports clubs in the U.S. and Europe, which they package up and stream this content in Japan, with Japanese subtitles. All modules are contextually integrated into publisher sites that mainly focus on sports and news content. Advertisers have the opportunity to run pre-roll and post-roll spots, mini banners and total module sponsorships. On entering Japan, Perform had to go around to all major publishers to pitch and demonstrate the value of streaming video, but were successful.
Generally the industry is quickly mobilizing. Below are some of the recent movements that have taken place in the past 1 year which demonstrate the growth of video:
Some Barriers do Exist
One barrier to the growth of online video in Japan would revolve around rights. Currently, when a brand produces a TV spot, the usage of these assets are not approved for online distribution. It can only be used for TV. You would either have to negotiate a separate rights deal or produce additional spots that do not use celebrities or other contractual assets that could prevent you from re-purposing for online.
Also, publisher adoption is another issue we are seeing. Traditionally, Japanese media owners have been quite conservative and controlling. Just 6 years ago only 20 percent of publishers accepted 3rd party ad-serving. Now around 80 percent accept it. But for video, this figure is much less. Until more publishers accept video site-wide, this will be a growth barrier.
Client interest right now in video is high and will only continue as budgets shift more into digital. Broadband rates in Japan are also very high, which makes it a very conducive market for video. In time, more and more publishers will adopt video into their site and the rights issues will somehow get sorted out. But, I can say with total confidence that video in the next 4 years will dominate the discussion.
In Japan, the late 90's was about display. The early to mid 2000's was about search. The past 3 years was about social. Video will be next.
Photo film image on homepage via Shutterstock.
Andy Radovic is a strategic digital marketer with 12+ years experience working in the digital media space across a variety of agencies, spanning stints in the U.S., Japan, Korea, and now Singapore. Currently working for Maxus Asia Pacific, part of the GroupM network, the world’s largest media investment management organization, and media communications and planning arm of parent company WPP. At Maxus, Andy leads regional digital duties for Asia Pacific with a focus on building out the Maxus digital product offering across Asia Pacific focusing on search, social, mobile, digital analytics and e-commerce. Prior to Maxus, Andy headed up digital for GroupM in Japan and Korea. Before GroupM, he has worked for a variety of startups in Asia and the U.S. across the technology and digital media categories and is a frequent contributor to ClickZ.asia, iMediaConnection, and RevenueToday.
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