ON A SCREEN NEAR YOU : Video streaming ahead in NZ

There’s no question that building a brand is a far more diverse affair than it once was. Gone are the days when a big budget, an award-winning TVC and a big wad of airtime was enough to build a brand. Locally TVNZ has its On-Demand service and TV3 also runs catch-up programming. Both networks also share content with other portals and news sites, which also run short-form video content from a range of sources. Josh Borthwick asks what does this mean to the future of online brand advertising in NZ?

By Josh Borthwick

Almost every major brand has (at some point) invested and produced compelling video for an internet world. The delivery for this has in the past been viral email, then Youtube and now, more often than not, via publisher websites.
According to TVNZ gm digital & interactive sales Mark Copplestone: “Compelling online video offers an opportunity to get back to the fundamental building blocks of advertising campaigns – reach & frequency.
“TVNZ’s strategy is to have our content on all screens. We don’t see our programming always being strictly on-air or online but rather through multiple outputs. You may still view our content through a screen similar to a TV, but the delivery maybe very different in the back-end. Conversely you may watch some of our content through much smaller devices like the iPhone.”
In this way Copplestone believes we need buying methodologies that work across all media. So perhaps online video presents an opportunity to change the online buying model away from CPM to CPR (cost per reach) or cost per user methodologies?
Orcon recently announced its summer of Youtube over which period all content from the site can be downloaded/streamed without contributing to customer data caps. This promotion combines with its O Zone offer that allows unlimited access to a number of sites such as TVNZ and the A-List without affecting the aforementioned caps.
All this and an ever-increasing broadband population means online video advertising is set to be one of the fastest growth areas in advertising over the next few years. This is a domain that has been owned by search and classified advertising and to some extent display advertising (with the increase in size of ad units and proliferation of rich media).
Google’s president of global sales operations and business development (say that three times fast!) Nikesh Arora told the recent Reuters Global Media Summit in New York: “The one big shift in the next three to five years is going to be video advertising. If you believe it can be targeted and it can be interactive – just those two features alone are going to change the way video advertising will be done on the web.”
Arora also goes on to discuss the opportunities available to advertisers using video online in the form of interactivity, which Mark Copplestone agrees with, also highlights the opportunities available to advertisers via frequency capping, which is something other media simply can’t offer. Utilising frequency capping online in conjunction with other media provides incremental reach and less wastage.
“In many cases we’ve reduced the cost of a campaign by 20% through utilising a two-screen approach to media-buying rather than multi-channel,” says Copplestone in reference to buying campaigns on air and on-demand through TVNZ.
MSN NZ business manager Liz Fraser says advertising on long-form content (full-length television programmes or specific online videos beyond two to five minutes) is the way of the future. “NineMSN in Australia package their content into audience buys rather than individual shows. This means your pre-roll video ad can run across multiple shows against certain audience segments, helping reduce waste and making it easier to get effective reach.”
Fraser says video is an incredibly important focus for MSN moving forward – second only to BING (MSN’s new search engine). In fact most serious publishers have a video component to their online publishing, whether it be relevant (or funny as hell) Youtube-embedded moments – such as those on getfrank.co.nz, comprehensive movie trailers as on FLICKS.co.nz or purpose-built how-to cooking videos on Foodlovers.co.nz.
BBC Worldwide regional director of advertising sales John Williams says: “Currently most video consumption on BBC.com is in the daytime via office infrustructure. We will continue to see huge growth of home consumption as broadband becomes more accessible.”
The BBC uses its massive heritage of video production and huge coverage of producers to generate more than 260,000 video streams per month in NZ, which is just over half the number of monthly users on the site from this country.
As the sales agents for BBC.com (and some of the independent sites mentioned above), we at Adhub view video as an increasingly important revenue stream, which already dominates around 25% of our online display advertising in the form of pre-roll TVCs and flash video within ad units (predominantly 300x250 sizes).
So what are the picks for 2010 and beyond? Just how is video shaping up and how do we expect it to change online advertising in the future?
Some of the big opportunities for the future of video advertising online can be learned from interactive TV in the UK. There is a huge amount of creative opportunity lying on the cutting-room floor like the much-lauded Wilkinson & Beckham video extras that ran many years ago. Video may not be purpose-built for online but it will be re-purposed with that environment in mind.
MediaWork gm interactive Siobhan McKenna believes: “The TV is now a web-enabled computer. As far back as ’95, the then marketing manager of HP said that people watch television with their hearts, and computers with their minds. The future of video on demand will see the heart and mind moving closer together, which is hugely exciting for advertisers. As retailers establish the e-commerce side to their business, video on demand will enable them to deliver instant fulfilment to people who want to buy-now.”
This is an important point for those who aren’t convinced that Flash banners create enough emotive impact for customers to ‘feel’ something for their brand. Online video offers the emotion of the TVC with the immediacy and interactivity of the banner so that your customers are not only compelled to act, but they’re engaged enough to become part of the story.
“Great joy will still be derived watching beautifully produced content on the big screen with friends, but online delivery will enable far more control and options, even down to what happens next,” says McKenna.
And these shows are already being produced in NZ with the likes of Reservoir Hill, which enables users to txt the show’s lead star, Beth, and influence her actions in the next episode. “The show has been one of our top 10 since launch with 25,000-35,000 streams per week,” says Copplestone.
John Williams sees the future of online video like this: “Eventually video will replace text, especially in the news space. Editorial will always have a place, but for a news/content organisation like the BBC, video [desktop/home/mobile] is the future!”

Josh Borthwick (josh@adhub.co.nz) has worked in digital media for 12 years. He is the founding chairman of the IAB and runs online ad network Adhub.

© Copyright AdMedia magazine February 2010

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