White Paper
Understanding the impact of online video (iVOD) on marketing and advertising

May 5, 2006

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Summary

Online video has arrived with highly publicized and explosive growth over the past 18 months. That growth will continue unabated for the next two years while advertisers grapple with various methods to reach the audience that has adopted the channel so rapidly. A large number of business models and providers are emerging to serve and monetize a very complex value chain.

Internet video content has fragmented into three tiers that are defined by production value. User-generated content presents both the greatest challenge and the biggest opportunity for advertising and promotion executives.

Background

In 2004 Mitsubishi produced an ad called See What Happens. It turned into a remarkable success. "They cut off the end of the commercial so that the only way you could see it was to go onto their website," remembers Ari Bluman, the CEO of 24/7 Real Media, an ad services network that brings video content and ads together.

Mitsubishi was targeting the sophisticated video consumers who took the time to research their auto purchases before buying. "They drove the users to one of the two places where they could do that research--the dealership or the web--to see what happens," Bluman continues. "It was a phenomenal success and the sales followed."

Marketers must articulate a meaningful strategy for end-user video experiences.

Even more to the point, the lesson from Mitsubishi is that well-matched video content-and-ad combinations that demonstrate excellent production values and are meaningful to the viewing audience will succeed if they're translated seamlessly across media platforms, whether it's to or from TV, the web, PDAs, cell phones or iPods.

Prior to Mitsubishi's integrated campaign, viral videos were hardly unknown. Indeed, a number of now-famous campaigns made a number of dot boom companies quite infamous. It is remarkable that more companies are not taking advantage of the efficiency of viral video campaigns.

The implementation of that strategy is gradually becoming more common. Relatively speaking, though, it's largely an untapped potential. "If you're looking to attract the user and generate an acquisition, if you're looking to increase your purchasing content and message recall, obviously utilizing the same message across platforms just makes sense," reasons Bluman. "But very few do today."

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