The online video wave is coming, and it will be bigger than…well, anything! According to the recently released Cisco Visual Networking Index (VNI), by 2017 more people will be consuming video online than any other media – including social networks, online music, gaming, or digital TV. In addition, it forecasts that consumer Internet video traffic will be 69 percent of all consumer Internet traffic in 2017.
VNI is Cisco’s ongoing effort to forecast and analyze the growth and use of IP networks worldwide – which the company predicts will double from 2012 to 2017 – and it presents a remarkable evolution in the online advertising space. Today, online video ad units are still a sparse commodity mostly found on PC devices, with publishers pushing to create additional video consumption and more video inventory. Based on these projections, video ad inventory will not be the problem in the future because Wi-Fi and mobile devices will account for 55 percent of IP traffic. Instead, the marketing challenge will be defining and delivering meaningful, integrated ads within this hyper-growth area and across device platforms.
In last month’s column, I explored how the online video creative has dynamically moved beyond the pre-roll to provide multimedia canvases that can live and run anywhere – social, mobile, within traditional IAB units, and elsewhere. The forecasted volume of online video consumption presents an incredible opportunity and challenge. And it raises plenty of questions: how will consumption patterns evolve? What will ad units look like? How will brands distinguish themselves?
The interesting thing about the media forms that online video will begin to overtake is that almost every one of them presents more opportunity for online video. Video is inclusive and additive to social networks, online music, gaming, and digital TV. So those mediums will not go away; they will just be filled with more videos and potentially less text, posts, and pictures. Online video’s growth will not replace other mediums, but rather they too will catch the wave as videos will become the dominant form of consumption, just as photos have grown to dominate today’s online mediums.
Catching the Wave
While traditional video ads are on their way to becoming passé, a future filled with online video appearing throughout various communication mediums is rich with opportunity. The online video ad units of the future will be less interruptive – e.g., “before consuming your desired content you must watch this” – and more a part of consumer consumption patterns, woven into social networks, streaming music, gaming, and digital TV experiences. In a way, this is building upon the sponsored TV shows of the ’50s and the initial successes of native advertising. But rather than “brought to you by” addendums or content integrations, video ads in these mediums must be incremental to the user experience – enhancing the user experience and adding value.
The future will require deeper integration into game playing or digital TV consumption, which in turn will position hybrid content/media companies like Apple, Google, Facebook, Microsoft, and potentially wireless carriers with an early advantage to do this right. They will be able to layer hardware, software, and behavioral characteristics to deliver meaningful, relevant videos in line with user expectations. This is not unlike the long-discussed model of “addressable TV,” but I believe the online video model has leapfrogged the in-home TV model. This advantage is due to the inherent volume of user-initiated sharing of personal interests and activities.
In other words, your gaming console will know a lot more about you than your cable provider ever will. It also helps explain the recently rumored partnerships between ESPN and wireless carriers. ESPN knows a lot about its users, but only with respect to a single passion point – sports. Working more closely with the carriers to underwrite data consumption would also (likely) enable them to target and deliver advertising in a much more sophisticated manner.
So if consumers move en masse to consume more online video and every brand is looking to reach and influence their target audience, how does a brand stand out? Quite simply, by taking a few chances. When you are looking to catch a wave, you cannot place your bet on a single break, rather you have to take a few floaters. There will be new platforms and new ad units from the major players, as well as startup and homegrown solutions.
As online video grows and evolves, the winners will intersect with consumers where they live and play. There will be a couple of years of a “Wild West” mentality as we develop, define, and refine these new models. Just as posting :30-second TV spots to the web didn’t work, shifting standard web video units to these new mediums will not work. Figuring out what to do and how to react will require applying test-and-learn principles, understanding your consumer audience, and working very closely with publishing partners – including social networks, online gaming, music, and digital TV companies.
It’s in each party’s best interest to collaborate and evolve together – design, build, deploy, then redesign, build, deploy. Rather than filling the pipe with volumes of irrelevant video, let’s work together to develop and deliver video that is more meaningful to consumers in every way.