Brands Embrace Online Video, But Play It Safe

As brands invest more money in online video advertising, one trend appears clear: most play it safe.

But is that the right thing to do? That question emerged several times during ClickZ’s Online Video Advertising Forum, which featured two dozen online video advertising and marketing experts from the United States and beyond.

Dean Donaldson, digital experience strategist at video ad management firm Eyeblaster, lamented that advertising in Europe is far more creative than in the United States. Asked for examples after the forum, he referred to an interactive video in the U.K. for the Mini R55 launch and an expandable banner for Mars Planet, among others .

He’s not sure why brands in the United States may be more cautious. One theory we kicked around after the program: could it be that marketing and advertising executives in the United States don’t enjoy the same job security as their counterparts in Europe?

Meanwhile in the United States, brands are pouring money into the medium. Video ad spending is expected to increase from $700 million this year to $3.4 billion in 2013. They’re investing in both video display advertising and in-stream video advertising, according to a JupiterResearch forecast.

One thing’s sure: While more advertising dollars are going into online video advertising, budgets for developing the creative are all over the place.

IQ Interactive CEO Tony Quin, for instance, estimated that a digital video ad campaign for one client cost “many millions” to create; adding in media time, the costs totaled about $15 million. Meanwhile, Geary Interactive CEO Andreas Roell said demand for online video ads is stronger than ever, but clients are putting on the squeeze to keep production costs down — and that can be accomplished by reducing the length of videos or finding cheaper ways to produce them.

Are Big Brands Risk Averse?

Some brand advertisers are establishing microsites on the Web and developing their own YouTube channels. Others are running ads accompanying streaming television shows and movies appearing on Hulu, a joint venture between NBC Universal and News Corp.

“Most of my clients are fairly conservative,” explained Chris Allen, vice president/director of video innovation, Starcom USA. “We have not seen a rush to support user-generated content.”

Brian Cusack, regional sales manager at YouTube, is also aware of the stigma attached to UGC (define) — which represents a significant part of YouTube’s offerings. “There’s an enormous amount of premium content on YouTube, much of it short form that marketers can leverage,” he said. “We can do a lot better job out there,” he said, referring to a need for YouTube to make conservative marketers aware of how they can use that content.

Deep Focus CEO Ian Schafer and others showed it’s possible to have a conservative yet creative approach. For his part, Schafer discussed his agency’s work for HBO to promote “John Adams,” a seven-part miniseries. “We were tasked with tapping into the political landscape,” he said, “so we reached out to very influential video bloggers.” Among them: Will Coghlan and Rob Millis, hosts of “Political Lunch,” a site that provides a dose of political news. HBO sponsored an episode of “Political Lunch,” while the video bloggers showed a sneak peek of the series. Plus, the bloggers traded their site’s branded coffee mugs for ones showing an image of John Adams.

In another shift, even traditional publishers are collaborating with brand advertisers to develop customized content, said Tessa Wegert, interactive media strategist at Enlighten. That was the case when Enlighten worked with “Us Weekly” and hair products company John Frieda, helping develop a microsite that included custom videos showing how to style hair, from “messy chic” to “power pony.”

Martha Stewart Living Omnimedia’s upscale readers expect high-quality online advertisements — in keeping with their expectations for the brand, said Christine Cook, SVP digital advertising sales at the publishing company.

Or consider the case of Verizon and its efforts to promote FiOS, a high-speed, fiber-optic Internet service. Campfire, its advertising agency, had several objectives for the FiOS campaign, including explaining — and showing — how far Verizon has advanced beyond its early POTS (define) days. Verizon, working with Campfire, developed a reality video series, “My Home 2.0,” featuring five families in five episodes in need of a home technology overhaul. (Yes, dump that dual-cassette player-recorder.) Families were selected from neighborhoods where Verizon planned to roll out its FiOS service. After each makeover, Verizon sponsored a neighborhood block party, showing the makeover video on a JumboTron. And Verizon sales staffers were on standby to sign up customers for the new service.

“We’re not repurposing content on the Web. We’re creating entirely new content,” said Michael Monello, creative director at Campfire. “It’s an emotional sell — the makeover, and the benefit story of FiOS and what it can do for a family.”

If you’re going for edgy creative, that may have to be reserved for special demographics. Like 15- and 16-year-old boys. EVB San Francisco CEO Daniel Stein said that’s the audience his team is targeting for a yet-to-be-released creative planned for a Levi’s “Live Unbuttoned” campaign.

Media: Converging or Fragmenting?

Apple’s iPhone has proven that the mobile Web works on a small screen, while cable television companies are moving to bring more interactive services to the big-screen TVs in our home. Cablevision, for instance, is developing interactive channels, including a video-on-demand travel channel for Disney, according to Barry Frey, Cablevision’s SVP for advanced platform sales. Consumers can press a button to have a Disney travel kit sent to their homes or have someone call to discuss a Disney vacation package.

“As new media products and services are developed, if they are good — consumers will engage in them. If consumers are engaging in them, advertisers will have to follow,” Frey said.

So are media platforms converging or fragmenting? While the audiences are fragmenting, there was no agreement about the platforms.

“The line between what’s digital and television and Flash, it’s really blurring,” said IQ Interactive’s Quin. “We tend to think in terms of impact — all colors of the palette, sound, animation, and video. We try to think in terms of getting people really engaged.”

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