Digital Branded Content: Online video breaks into mainstream

Google's purchase of YouTube indicates the perceived potential of online video ads, and advertisers are beginning to look at how they can safely exploit this rich-media opportunity.

Google's recent $1.65bn (£833m) purchase of web-video phenomenon YouTube demonstrates just how strongly it believes in the opportunities online video can offer advertisers and users.

The 100m YouTube clips viewed each day are typically favourite sporting moments or amusing antics, but Google views the site as the future of advertising, as consumers become ever-more resistant to traditional commercial messages.

In the UK 11.1m homes and small businesses now have broadband, making it commercially viable to use online video as a mass-market strategy for the first time.

Although still in its infancy, a number of online-video strategies are beginning to emerge, the most significant being video advertising, online branded TV channels, viral video and user-generated content (UGC).

Not surprisingly, due to online video's close similarity to traditional TV advertising, advertisers have been keen to take advantage of the services provided by video advertising networks. These offer video advertising services and solutions across a range of websites with the technical capability to show TV-style video ads online.

There are now more than 10 such networks in the UK, including big names such as Advertising.com, Eyeblaster, Tangozebra and U-Target.

One of the first areas of online video to flourish has been video advertising content, in formats ranging from video banner ads to TV-style executions added to the beginning of video content online.

This format is attractive to advertisers because it provides a safe playing field; working with established networks and publishers steers them clear of any fears of associating their brand with more unpredictable content, such as the user-generated videos on sites such as YouTube.

Online-video advertising networks such as U-Target TV can offer advertising video placement alongside relevant content on a web page, which is where brands can really benefit. A highly sophisticated video ad in a relevant context can be extremely powerful.

One media owner that has embraced the online video revolution is publisher Emap, which has been developing video-advertising opportunities as well as video content for its stable of magazine brands, including lads' mags FHM and Zoo.

The publisher has adopted a 'commission once, use many' approach, which means that content is developed to run across all the channels it operates, including TV, radio and online. This has led to richer content on its websites, including an increase in the number of videos it hosts.

Dharmash Mistry, managing director of Emap Performance, says advertisers are becoming more interested in the opportunity to advertise around this video content, either by adding pre- or post-roll ads to the video itself or booking online ads on high-traffic pages. Consumers benefit from the additional editorial video content created to meet the needs of the advertisers, while advertisers enjoy high-impact slots, which allows the publisher to increase rates.

'We continue to offer the traditional web advertising mix, but streaming video is increasingly being requested by our clients. It also has a greater cost per thousand,' he says.

Emap is also keen to package up cross-media advertising opportunities as they are more lucrative than traditional advertising deals and offer greater potential for advertisers to engage with key consumers.

One of the biggest challenges facing online media owners is how to charge consumers for video content online. While it is deemed acceptable to pay for video content on a mobile phone, consumers still expect online content to be free, so one option is to use brands to sponsor specific content.

'We secure sponsorship deals to create content that we can then advertise around,' says Mistry. 'Although the consumer understands that someone has to pay for it, there is still an expectation that online content should be free.'

Brands are also attempting to own the online video experience by acquiring and funding content themselves in the form of their own online TV channels.

Industry observers believe that combined with media fragmentation, this could lead to the emergence of thousands of niche branded online TV channels, giving brands the opportunity to develop communities around their products, not least because online video is very cheap to launch and run compared with traditional TV.

Iolo Jones, founder and chief strategy officer at online-video specialist Narrowstep, says: 'A lot of TV ads are not relevant. This has to change. We have already seen a shift on TV toward sponsorship and product placement; the next step will be content creation.'

Narrowstep works with a number of companies on their branded-video channels, including Land Rover and ITV; for the latter, it powers regionalised broadband TV service ITV Local.

One of internet channels' biggest advantages over digital TV is that they give brands the opportunity to deliver content to consumers at a much lower cost. Online also has superior data-capture capabilities, enabling a brand to monitor viewing habits and subsequently target viewers accordingly. Brands including lastminute.com and Ministry of Sound have already created dedicated online channels.

Also, as firms are now able to produce a TV-like experience online, the difference between traditional TV and online video content is blurring in the minds of viewers. 'It is below-the-line TV and it is moving further into the targeted environment,' says Jones. 'The difference between the TV screen and the computer screen no longer exists.'

However, creating online branded experiences may not be an ideal solution for all. Faraaz Marghoob, managing partner at interactive agency Meme London, which has created online video virals for major advertisers including PC manufacturer Lenovo, believes that as people gain more control over what they watch, they will choose less branded content. As a result, the branding power of online video will diminish.

'Only the strongest brands will be players and they will need to develop properties online that provide entertainment. Only the very biggest brands, such as Nike, will have people who want to watch their content.'

At the more edgy end of online video sits viral marketing. At one time this was the darling of the online world - a format that allowed virtually free rein in terms of content. But the very nature of viral videos has in the past discouraged some brands from using them, fearing a potential consumer backlash for intruding on their digital experience.

However, as companies have become more comfortable advertising online, they have begun to embrace the medium, and some viral efforts this year have had outstanding success.

When Pipex chose David Hasselhoff to front its advertising, the brand's creative agency Karmarama used the star's popularity to develop a viral campaign that would build awareness of the ads well before they debuted on TV.

'We used online PR seeding in chat rooms, viral distribution sites and fan pages,' says head of account management Dan Worrell. 'It was big news that Hasselhoff had signed up to do this and in the 10 days before the TV ad was aired, the viral received more than 1.5m views.'

Pipex discovered that consumers who had viewed the online ad were more likely to engage with the ads when they appeared on TV, especially as a number of executions were used. These, in turn, drove people back to the website to check whether more video content had been posted.

Karmarama is now building on its initial success and has shot an ad specifically for online, as well as developing an online proposition that allows users to interact with the ads and remix them.

'The online community is at the heart of the campaign's success, since it is they who re-engaged with the Hasselhoff brand,' says Dana Loftus, group marketing director at Pipex. 'But it is only now that the technology exists that allows the creation of a meaningful online campaign for that audience.'

The final piece of the online video jigsaw is user-generated content. UGC has generated more media coverage in the past two months than almost any other online medium, thanks to YouTube's Google deal.

But in reality, the power of user-generated video has not yet been harnessed by brands in the UK, as marketers have been hesitant to align their brands with content over which they have no control.

Nike, however, is an exception. The sports brand's 'Joga Bonito' site, which hosts a series of online football videos, ran a campaign intended to get people visiting and interacting with the Joga social network. It was so successful that hundreds of people sent in clips of their own efforts at imitating Brazilian footballer Ronaldinho's one-touch prowess.

Despite plunging further into the arena with its purchase of YouTube, Google is aware that some advertisers are put off by online videos' potential danger, according to Nicole Vanderbilt, head of industry marketing at Google Europe. 'Our aim is to get users to view videos when they are surfing. Brands can advertise alongside UGC, but some have worries about their brand being associated with certain content,' she admits.

Some unsolicited UGC can be hugely beneficial to brands, though. Both Mentos and Diet Coke have reaped the benefit of UGC online after a series of videos posted on video-sharing sites showed the chemical reaction produced when a Mentos sweet is dropped into a bottle of Diet Coke.

Though neither brand played any part in the videos, they became a global phenomenon. Mentos launched a dedicated microsite to capitalise on the stir the videos were causing, while Coca-Cola, which initially tried to distance itself from the videos, eventually sought to take ownership by hosting a less risque version on its website.

'Mentos' marketing team is very pleased with the buzz that has been generated, but the brands had nothing to do with it, adds Vanderbilt. 'In this sense, video has further developed the Wild West feel of the web.'

The challenge for Google now is to create opportunities for brands that want to harness the power of online video through video-sharing sites and balance this with its ultimate aim of getting content to consumers when and where they want it.

One drawback of online video, and particularly UGC, is that it brings with it many unfamiliar issues. Google, for example, will need to address the amount of unlicensed content that has been uploaded onto the site, and has already started a major clean-up of uncopyrighted material. While starting a TV channel involves a huge investment of time and money, it is easy to upload video onto a website, and brands that use it must be prepared for its unpredictable nature. Videos can be ripped off or turned into something else entirely and this is a difficult concept for some brands to comprehend.

However Google decides to bring together advertisers and consumers through UGC, it will be a delicate balancing act. Google must tread carefully if it is to find a solution that works for both parties.

Video seems likely to be the future for both internet and mobile content as consumers demand richer, more TV-like experiences. It will not replace TV, which is still the only medium capable of reaching millions of people at one time and place, but as media continues to fragment and the public's consumption of online increases, brands will increasingly want to harness its power to engage their customers.

FACT FILE - FOOTBALL LEAGUE

To mark the start of the new season and to help clubs improve their attendances, the Football League created its first video podcast.

The work, which starred former player and now broadcaster and Coca-Cola Football League ambassador Chris Kamara, was intended to encourage fans to go to games and support their local club.

The video, created by PR agency FWM, was hosted primarily on the Football League's official website and promoted via the network of official websites of individual clubs.

A poster campaign featuring Kamara in a Lord Kitchener-style pose and using the strapline 'The Coca-Cola Football League wants you' was also used to drive views.

The League submitted the podcasts to a number of community and download sites, including YouTube (where it was ranked the 85th top-rated sports video of all time and sixth-top-rated sports video of the month), iTunes Podcast Directory (where it was ranked 17th in the sports and recreation section), as well as Google Video, Revver, SelfcastTV, Bebo and Gills365 Podcast.

On sites that can be tracked, the video podcast has been watched 36,000 times. The video was also broadcast on the Sky Sports TV channel on 12 occasions - taking its estimated viewing figure to an audience of more than 300,000.

An email campaign used to promote the video podcast and season launch was opened by more than 100,000 of its 500,000 recipients - a healthy 20% response rate - which led to an impressive 19,000 clickthroughs to Football League-generated marketing content.

Overall, the activity cost the Football League £3000; crowds for the first month of the season rose by 1% on the previous season.

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