Tags: Advertising, business model, focus groups, Marketing, monetizing, Research, UGC, video
In their new September issue, Fast Company magazine features a fascinating story about the comedy web video business and how it’s almost impossible to make these websites profitable.
They lay out many of the current business models, but I think an addendum is useful. In this post, I will outline a mindset that hurts that industry, what the current business model is and why it doesn’t work, a suggestion to ensure profitability, and the business model that can make an online video site profitable.
First, The Mindset
We tend to think about web videos as a “thing.” It is a product. It is content.
Forget this mindset. If you’re a video producer, web video might be a tangible thing that comes from tangible people sitting around your tangible office. But it’s not.
For your audience, web video is an experience. There’s no actual product for the viewer – the video elevates the spirits or gives us hope or connects us to others. It has more in common with a trip to Disneyland than it does with buying razor blades.
So stop thinking of a video as a commodity and start thinking of it as an experience you provide for your viewer.
Second, The Model
As the Fast Company article points out, the prevailing business model is advertiser-based. This has been the case for most things in the U.S. for more than half a century.
However, the advertiser business model cannot support web video. Consider it: the marketplace is fragmented, niche sites have the most loyal visitors, online is still new to many advertisers, audience has a decreased appetite for ads, and the content (at least on the comedy sites) is oftentimes…edgy, to put it diplomatically.
Even off-shoots of the advertiser model don’t work, such as product placement and sponsored shows. The huge conglomerates that have the money to invest in these small comedy sites only know these sorts of models – give the product away in exchange for some advertiser time.
No matter how many times you throw money at the problem, this business model still doesn’t work.
But that doesn’t mean web videos will never be profitable. (Misters Murdoch and Branson, please have your assistants print out the following explanation.)
Tags: blogging, Business, Communication, company, content, corporate, how-to, HowTo, Marketing, Online marketing, Social Media, tutorial, UGC, user generated content, Web 2.0, Web2.0, White paper, white papers, writing
You’ve heard all the hype about Web 2.0, but what does it all mean? How will it affect your business?
How do you communicate with potential readers and customers in this new era?
My free white paper, Writing Content in a Web 2.0 World, answers these questions and:
- What exactly is Web 2.0?
- How should your writing style change?
- How has online interaction changed and what will this mean for the future of business?
- What is the secret new currency in this market?
Download the white paper here: Writing Content in a Web 2.0 World
(The white paper is in PDF format. Download the latest version from Adobe here.)
And of course, please join the conversation! Leave comments here with your thoughts and suggestions for this or future white papers.
I considered requiring you to subscribe to my enewsletter to download the white paper. After all, if you were interested in this subject, it’s a sure bet you will be interested in my other content.
However, I’ve decided that this requirement does not fit well with my overall strategy or the community environment found in a Web 2.0 world.
Tags: arts, Communication, Email, eNewsletter, eNewsletters, Marketing, Online marketing, Politics, t-shirts, The New Republic, Threadless, TNR, UGC, user generated content, Web 2.0
In the inaugural eNewsletter battle, I pitted Moosejaw vs. Cool Hunting. Today, I’m placing two more eNewsletters in a Mason jar, screwing on the cap, and shaking it until only one remains.
The winner: Threadless
Threadless is an online t-shirt manufacturer based in meat-space in my new home, sweet Chicago. They also possess an undeniable cool factor and loads of fun-ness. Here are some reasons why you should sign up for their newsletter: Continue Reading eNewsletter Winners and Losers: Threadless vs. The New Republic…
Tags: Advertising, Anheuser-Busch, Bud, Bud Light, Budweiser, Communication, Doritos, Facebook, integration, Marketing, MySpace, Online marketing, Search, SEM, SEO, SoBe Lifewater, Social Media, UGC, user generated content, Web 2.0, web integration
Hey, remember the Super Bowl and all those cool ads? Yeah, me neither.
I could have bookmarked the URLs of company’s whose ads I enjoyed or told my friends about cool microsites I experienced, but I didn’t because the web was largely forgotten in this year’s ads. URLs were printed small and almost always at the end of the ad, there was only one example of user generated content, few (if any) microsites to continue the experience after the game, and generally poor use of search. What a waste of $2.7M.
Michael Estrin of iMedia Connection has a good wrap-up and several interviews of note. The question he pursues: where was the web? From Estrin’s article: “It was like we went backwards this year,” says Sean Cheyney, VP of marketing and business development at AccuQuote. “It’s like we’re moving back into silos. I was surprised that companies didn’t do more integration. The web was an afterthought for most of the ads.”
Beyond the 30-second Spot
AOL’s Annual Super Bowl Sunday Ad Poll ranked the Bud Light Dalmation-Clydesdale-Rocky ad was America’s favorite, yet it did not even have the requisite web address at the end. Here are a few quick ideas of ways you could have capitalized on this success (call me for more – my freelance rates are very reasonable):
- Contest to name the Dalmatian and Clydesdale
- Start a rivalry between Bud and Bud Light (represented by the dog and horse) similar to the Bud Bowls of the 90s
- MySpace page wraps in spots (Dalmatian) and tough-guy horse stuff (Clydesdale)
- Facebook app that allows you to send a Bud Light to a friend
- Advertising tie-in with the new Rambo movie (I imagine there’s audience cross-over with Rocky)
- Jab back at the new Miller Lite spot featuring…Dalmatians and Clydesdales
- Create a site where you integrate this ad with other Bud Light Super Bowl ads (have the dog breathing fire, the horse flying, etc)
Budweiser, what do you pay these marketing guys? Hire me or any 15 year old and you’ll get more web marketing bang-for-your-buck.
Failure to Launch
Any marketer worth their snuff – nay, conscious in the last year or two – knows that search is an integral part of any campaign. So, why this MediaWeek report:
“70 percent of Super Bowl advertisers bought some paid search ads on either Google, Yahoo, MSN – up close to 20 percent versus last year. But just 6 percent of advertisers used their 30-second spots to direct viewers to the Web, and the vast majority (93 percent) failed to buy search ads for alternative terms that were related to their ads, such as their spokesperson’s names, slogans or taglines.”
MediaWeek is reporting on a Reprise Media scorecard that goes into more detail. I find it amazing that roughly 93 percent (of the 70 percent who bought ads) failed to think of these ads from the user’s perspective. Your uncle Jimmy had knocked back a six-pack and was in the grip of a food coma when he saw Naomi Campbell dancing with a bunch of lizards. When he stumbles to the computer, he is not going to search for SoBe Lifewater. He’s going to search for “hot model and dancing lizards.” Little surprise that SoBe also ranked as a “fumble” on Reprise Media’s scorecard.
I Get By With a Little Help From My…Oh, Forget It
Only Doritos had the cojones to use user generated content. Despite it being ranked near the bottom, I thought the ad was okay. Doritos had a nice intro to the commercial, but I would have loved to see it end with the singer crunching into a Dorito. Cheesy, perhaps, but so is the product. My message to Frito-Lay/PepsiCo (who own Doritos): Don’t be rash in firing your advertising company. It is better to work with someone willing to take the big risks and use the medium that appeals to your audience. These are the folks with the potential to blow people out of the water.
Also, not a single advertiser drove viewers to their MySpace or Facebook page – there was zero social networking involved. Believe me, this isn’t because people aren’t using Facebook anymore.
Fox did drive people to www.myspace.com/superbowlads though, which is a nice way of increasing the ads value with a measurable online component. Of course, for $2.7M, I’d be wanting a little something extra too.
No one is complaining about a game of two huge franchises in the largest media markets where one of the teams has the chance to have a perfect season (and finally shut up the ’72 Dolphins). But if you’re an advertiser and next year pits the Titans versus the Buccaneers (no offense guys, but come on), you might want to start thinking about your other options. Joe over at Junta42 has some great ideas for how to spend all that cash.
Tags: alternate reality game, ARG, ARGs, Cloverfield, detective, detectives, Marketing, Nine Inch Nails, OLGA, OLGAs, Online marketing, UGC, user generated content, viral, viral marketing, Web 2.0, Wired, WIRED magazine
Have you ever played an ARG? You might have and never known it. And it could be the most addictive thing in marketing in the last few years.
ARG stands for “Alternate Reality Game”, as written about in the January issue of Wired magazine. Just this past weekend, I stumbled upon one while trying to figure out what the heck the movie Cloverfield was about (after clicking the link, see the “viral tie-ins” section at the bottom).
First, let’s get rid of the name. Alternate Reality? This ain’t the mid-90s. Besides, it’s not even accurate; there is nothing alternate reality about this process. I propose Online-Life-Game Amalgamations: OLGAs. Besides being more accurate (that these products operate online, in real life, and within a game in tandem), from a marketing perspective, doesn’t OLGA present a more pleasant image/sound in the mind than ARG?
OLGAs differ from other marketing efforts because rather than trying to breach the consumer’s interest through volume (push), they draw people in (pull). As the Wired article states, “That’s why [Weisman, the ‘creator’ of OLGAs] opted for a ‘subdural’ approach: Instead of shouting the message, hide it.” Thus, the consumer becomes a detective. Much like National Treasure, The Da Vinci Code, or anything by the immanent Paul Auster (especially The New York Trilogy), the author becomes part of the story, deciphering clues s/he had not realized were in plain sight, and needing to know not just where to look but to look at all. Again, from Wired:
“These narratives unfold in fragments, in all sorts of media…the audience pieces together the story from shards of information. The task is too complicated for any one person, but the Web enables a collective intelligence to emerge to assemble the piece, solve the mysteries, and in the process, tell and retell the story online. The narrative is shaped – and ultimately owned – by the audience in ways that other forms of storytelling cannot match. No longer passive consumers, the players live out the story. [my emphasis]”
You can read the article for background, examples, and a history of OLGAs, but I would like to flesh out three principles in this emerging field.
- Definite entry points: All of the OLGAs I have read about have definite entry points, though ideally multiple mediums would be used. The examples of the Nine Inch Nails Year Zero campaign used multiple websites, a message on an answering machine, and flash drives hidden in restrooms at concerts. The multiple mediums almost act as second opinions – they build off of each other and support the legitimacy of each other.
- Seamless integration into life: OLGAs derive some of their appeal from the way the games fit into a player’s life. After a threshold of suspension of disbelief, these games feel very real. You are not going to a “puzzle” webpage and “playing.” You are solving puzzles in real time with other people online.
- Less Is More: OLGAs succeed from a marketing standpoint not only because they do not feel like marketing, but because they do not beat their message into the head of the consumer. In this instance, whispering is better than shouting.
- OLGAs must be fair and have (some sort of) a conclusion: OLGAs tap into a primal human desire to solve things. From a dissertation on Paul Auster’s novels: “As another version of teleological classic art, detective text is obsessed with closure; the end comes not only as a salvation of the reader but at the same time gives reassurance that the reader is not be wandering in a wilderness of ambiguous signs. Everything that happens in a detective story must be placed under the perspective of a final truth.”
OLGAs are not for everyone: both creating and playing. Companies should realize the immense amount of work involved – from scheming it up, to creating content, to placing clues in the real world, to monitoring players’ progress. OLGAs burn through a lot of time and money. Likewise, companies should understand that their OLGA may not reach a huge number of people. Gauge response less on the number of people involved and more on their fervor. Remember that the fanboys are the ultimate evangelists.
Finally, here’s an article from MTV detailing some recent OLGAs. The critic confuses OLGAs with stupid publicity stunts, putting them both under the rubric of unconventional marketing. Truly unconventional, yes; but also in a class all of their own.
Tags: Decision making, Marketing, Online marketing, return on investment, ROI, Social Media, UGC, user generated content, Web 2.0
We recently had one of the worst weeks ever. It included (but certainly wasn’t limited to) taking the car in to replace an insanely expensive hose, losing our heat during a Chicago winter, getting sideswiped by a Chicago trolley right after leaving the dealership, and the subsequent arguing with and lying from the trolley driver to the cop about how she was not involved. Needless to say, there were not a lot of bright spots in the week.
But when the dealership tried to squeeze another $470 from us for a CV boot, I did a little research. Yelp.com and a few other sites extolled the virtue of the mechanic right down the street. He did the job in a couple of hours for $188. Amazing.
What does this all have to do with online marketing? Well, I was not surprised when I read this study from comScore. Not only are 1 in 4 internet users consulting reviews before purchasing offline, but they are willing to pay more if the service is ranked as excellent. It seem that after the year of exuberance that was all about Facebook and twitter, business is finally getting around to answering the question of how social media effects ROI.
If you have been questioning this yourself, you are not alone. I have seen at least 5 webinars in the past week and a half on this question alone: How do we determine our ROI on social media? And there are two distinct undercurrents in this discussion: 1) a low-lying anxiety on the part of marketers regarding keeping up with current trends and 2) trouble convincing an old-school CEO or other higher-up that this is of value to the company. I am a victim of the former and may blog about it in the future, but relief for the latter is beginning to emerge.
Among the best of the webinars and white papers discussing social media ROI are those from TNS Media Intelligence/Cymfony. Anyone who is trying to convince their fellow employees about the value of social media must read their white paper, Making the Case for a Social Media Strategy. (Just so you know, I’m not connected to the company at all – I just really do like their work.)
They begin by going through an evolution of digital communications and present research on what people are doing online. They then explain how social media is a blurring of communication and content (the two activities people do the most online) and give salient examples of how struggling industries (especially newspapers) are embracing social media and seeing profits skyrocket. Among the quantifiable ROIs:
- direct conversion of buzz into sales
- market feedback/testing
And each of those quantifiable ROIs has at least one example from a major, dynamic company. Consider these:
- Crowdsourcing: “Intuit created a community with discussion boards on their site so customers can help each other with questions…According to Business Week, this community now has over 100,000 members discussing topics across 50 subject areas.” CEO Steve Bennett’s 2005 annual report letter to shareholders stated, “positive word of mouth creates a durable advantage for Intuit that translates into sustained revenue and profit growth.”
- Recommendations: “Analysis of [Petco’s] web traffic revealed that users that [sic] sort the list of products by customer ratings spend 41% more than users who search with other methods like popularity or price… Emails that feature customer review content receive 50% higher clickthrough rates.”
Helpfully, there are also cases where social media hurt companies, but a fair review notes that it was not the tool that caused the problem, but the poor PR skills of the company. Many are not adept at responding quickly, especially to a crisis situation. These examples serve as a good warning to be prepared for what you are about to take on.
In the end, social media is just a tool. But this study and others can give you the quick-and-dirty version (with stats) to help convince your more traditional bosses. It’s a scary new world but at least we’re all in it together.
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