Wednesday, February 3, 2010

Online Video Platform Summit: Redefining Monetization

Established methods of monetizing online video content include: advertisement, sponsorship, merchandising, licensing and acquisition, paid syndication, subscription and pay-per-view, product placement and branded entertainment. And in many cases, businesses may use video as marketing tool for lead generation and sales to promote their products, goods and services and extend brand message. But the question of how to most effectively monetize online video and what revenues to expect, tend to be more difficult to answer for many online video publishers. I led a panel discussion on Redefining Monetization at the Online Video Platform Summit that featured a diverse panel with Benjamin Wayne, CEO of Fliqz, Peter Csathy, CEO of Sorenson Media, Kevin Nalty of Nalts Consulting, and Teg Grenager, co-founder of who debated the viability of advertising in online video and the true value of online video as a marketing tool.

Redefining Monetization
Different organizations have different goals and business models when it comes to monetization. Some monetize their video content directly with advertising through pre-rolls, post-rolls, overlays and product endorsements or by a pay-per-view or subscription model. But most organizations will benefit by using video as a way to build value by driving sales, highlighting products, expanding brand awareness, and increasing customer engagement. This panel discussion will look at monetization from all the angles, address the different needs of B2B and B2C initiatives, and show examples of successful monetization practices.

Moderator: Larry Kless, Founder, President,
Peter Csathy, President & CEO, Sorenson Media
Teg Grenager, VP of Product and Marketing & Co-Founder, Inc.
Kevin Nalty, Consultant, Nalts Consulting
Benjamin Wayne, CEO, Fliqz

Highlights from the Panel

Benjamin Wayne noted that until recent years video tended to be viewed in narrow terms of monetizing the video stream, and while ad supported models have proven effective, we're now seeing video used as a marketing tool in broader terms for reaching, building and converting an audience with a call-to-action on the site, with a 3-4 times conversion rate. Some of the businesses now using video are real estate agencies, dental offices, law firms, industrial and manufacturing.

Benjamin said:
"So the question is really, if you have a website and you're using online marketing as a tool to drive people to that website, video really should be part of the marketing mix. And the way in which you integrate it into the site and into your SEM (Search Engine Marketing) and SEO (Search Engine Optimization) efforts needs to be broad reaching and strategic, as opposed to simply tactical around ad monetization."
Kevin "Nalts" Nalty looks at video as the most visceral form of social media, and initially he looked at it as an awareness tool, but more and more he's seeing it as a direct response vehicle. Now as a full online video marketing consultant, he works with many brands who are afraid of YouTube and video and want a safe place to play. But his message is, that it's the same concern about the web a decade ago, and that you need to be where the people are and bring your compelling message. His videos get about 6 million views per month with the bulk coming from YouTube, and as a content creator that's become a second source of income through the ad sharing revenue program.

Kevin shared some advise for creating branded content.
"When I'm commissioned by a company to do a promotional video, it's got to be entertaining, it can't feel like an ad, where people just turn it off."
Peter Csathy said any business online can use video to monetize their business and that 99% of sites with online video are not content or media sites that serve ads, they're much like the sites that Benjamin described, small and medium-sized businesses that drive revenue through video to showcase their products and services. He said that in 2010, competition in the business sector will drive more adoption of video as successful practices emerge, and high quality video is very important because it reflects on your brand.

Teg Grenager discussed online video from the media company perspective, and that the primary revenue stream for media companies is advertising. But they are faced with challenges of scale and inventory, but with ad networks and companies like, media companies have been able ramp up their online video publishing businesses. But CPM (cost per thousand) impressions vary and large media companies the Wall Street Journal and NY Times boast that hey can command CPMs of $50-60-70, but as Teg maintained that small media companies can run a very good business in a reasonable range of $10-15, which is what direct ad sales teams can get with relatively small but high quality content.

Benjamin pointed out that the page CPM and video ad CPM are different, and that the ability to monetize the entire page gives publishers more leverage. Teg agreed and said that the web offers a unique experience akin to television where publishers can measure time the spent on a page and balance that with an ad load that viewers can accept, such as two ads every 10 minutes.

Nalts shared a pet peeve of his about how impressions and CPMs are measured from a media purchase to a media buyer. Online video ads (pre-mid-post-rolls) and banner ads don't have the same result and level of engagement and until that gets fixed, we won't have real measurement of the viewer experience.

According to Kevin:
"An impression is such a lousy term for video, because an impression isn't an impression unless it MAKES an impression."
The panel discussed online video advertising and balancing the needs of viewers, publishers and advertisers, and that over time through real-time feedback on ads, there will be a more personal viewing experience where you won't get served up irrelevant ads. They also debated the production value of video advertising and the sustainability of amateur video for business marketing efforts, the death of viral video, and how that making a viral video is not a smart business move.

Kevin shared a few videos, this is sponsored video:

And this one that he almost didn't post, which now has over 14 million views

People always ask Nalts, "what works?" and he said that he has no clue, because he thinks that Scary Maze Game is a terrible video, but things that people should take into consideration are a few basic elements: good thumbnails, title, brevity, being a little edgy, sometimes sincere or moving, you've got to hook them at the beginning and adding that human element, having a face or person that the viewers can connect with really works - and all of these elements are transferable to publishers.

Kevin said a key strategy is that businesses can use YouTube to drive views back to their own sites, which can increase conversion and brand awareness. Benjamin said, video SEO is the "neglected gold mine" in the online space and that using proper submission techniques to Google, video is 53 times more likely to generate a first-page Google ranking than using traditional SEO techniques. He shared an example of a search term, "social product development in action" which when searched, brings up their customer's same video as the top first-page ranking with the video on YouTube and on the customer's own site. Email marketing with video thumbnails is another area that's been incredibly successful for another customer,, which Benjamin showed increased their views 800% to 10 million views a month.

The panel closed with final comments with shameless plugs and advise. Nalts said to become your own audience, sit through videos and realize what's good and what's bad, where you irritated and captivated and subscribe to Benjamin suggested that sponsorships can be a great way for content publishers to escape the CPM lock and reach a niche audience. Brand advertisers can sponsor the page for month rather than video, which can be much higher rate of return.

My thanks to Benjamin, Kevin, Peter and Teg for a great a panel discussion!

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