Monetizing Video Is Only the Beginning

Where’s the monetary value in online video? That’s currently the $67 billion question. But it’s just the start of what’s dogging the ad industry. There’s little doubt consumers across a wide demographic swath increasingly turn to the Internet for video-format news, entertainment, and purchase information. No, this isn’t another column about the shift from TV to the Web; I counted 17 such articles last week, each written by someone more knowledgeable than me. Instead I’ll focus on potential impact from an online marketer’s perspective.

A couple of fundamental behavior changes are driving consumer interest in online content, video in particular. Empowered for better (e.g., via blogs) or for worse (e.g., via fake blogs), consumers tend to validate online what they hear in virtually every other channel, including word of mouth (WOM). Online information has become a de facto standard. Whether this is a sound or unsound practice, it’s an emerging reality. Consumers also deeply distrust overtly crafted advertising, the portrayal of those simple scenarios where the problem/solution is just a bit too made up.

The separation of creative development from media planning is partly to blame insofar as traditional advertising’s credibility and effectiveness is concerned. What consumers accept in one channel may not be credible or tolerated in another. Pestering consumers with roadblocks when they’re trying to read an article or hitting them with ad painted on Home Depot’s parking lot stripes is obnoxious. This sort of tactic tends to push consumers away from advertising altogether, and that hurts everyone. Where do you want to be interrupted today? Personally, I don’t want to be interrupted at all.

There are clear best practices for online marketers here. Anytime consumers participate in the message, whether by remixing, sharing, or adding their actual experience, the result is likely to be more valuable to other consumers. Driving success in consumer-generated marketing, therefore, relies heavily on a precise alignment of creative and media, and of the brand promise and actual experience.

In an earlier column, I discussed the essential link between operations and marketing. Temporally, the consumer-feedback cycle (the time it takes for an actual experience to begin affecting the next wave of potential consumers) is approaching zero. Consumer feedback is essentially a real-time media channel, with a net effect that closely correlates with how well a brand delivers on its promise.

Ogilvy CEO Shelly Lazarus described the rising importance of the brand and indirectly implied the marketing-plus-operations connection when she said, “Brand is CEO territory now.” In the socially connected online world of re-circulated WOM, brand is most definitely a C-level priority. It has to be.

Regarding message delivery itself, matching creative execution and media channels is likewise essential. Consumer acceptance of a core message rises when creative and media teams work on a campaign in tandem, still a rarity at most agencies. Contemporary full-service agencies (those that have blown up the silos in favor of actual multidisciplinary teams) have the clear advantage. Online marketers must be at the table early, as they’re still too often seen as an add-on resource. Take quick spin through any leading high-traffic online property, and you’ll see the bulk of online media is nothing more than warmed-over TV. What’s oddest about this is the most intrusive formats of all; SPAM, pop-ups, pop-unders, and now pay-per-say blog postings, are used in channels where interruptions are the least tolerated and the negative backlash is the most easily spread to other potential consumers.

Why do we do it? That’s the bigger question. Relying on my past experience as a consumer services product manager, I think the answer is stock-market-driven, quarter-over-quarter earnings pressure. When smart people are increasingly pushed to up sales volume over time, they quickly conclude talking nicely to consumers doesn’t work. They push agencies toward interruptive communications exactly when they should hand consumers the reins.

It’s not enough to explain a value proposition and hope consumers will buy when the time’s right. Hope isn’t a strategy. American marketers need consumers to buy now. So we up the volume. We up the frequency. We invent problems people don’t have: Are you confident? Are you sure? We whip consumers into a frenzy. We have to. If we didn’t, they wouldn’t buy as much.

Therein is the real issue with the shift from TV. If consumers aren’t sufficiently activated, the economy will suffer. This is the challenge that faces the online marketers: to maintain the same buying levels while decreasing the interruptive component of the ad.

Advertising directly drives our economic quality of life. The real challenge for online marketing channels isn’t grabbing and spending the money that used to be spent on TV. It’s delivering the same buying intensity that currently powers America’s marketplace engines.

Consider the difference between American and European advertising when the going gets tough. In the U.S., we crank up the rebates, price-item campaigns, and similar “buy now” incentives. Europe pushes harder on brand ads, reminding people about loyalties, long-held traditions, and so on. When it’s all said and done, we do sell more. Europeans have longer vacations. Hmmm.

The next generation of online marketers has a clear challenge: getting consumers to participate in the message, matching the creative with channel, and creating fewer interruptions. In addition to hoping for some of the dollars spilling off the TV wagons, the replacement channels must continue to drive our uniquely American consumerism. TV is a powerful, passive medium. We get hypnotized by it and tend to do what it tells us. In comparison, online video is a much more participative experience, and our critical thought is often closer to the action as a result. In the end, if our brand experiences aren’t positively talk worthy and don’t sufficiently encourage consumers to buy, many marketers could have more vacation days than we ever thought possible.

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