EMarketer Digital Video Roundup, Sept 2013

eMarketer Digital Video Advertising Around the World Roundup

SEPTEMBER 2013

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Video is the fastest-growing of any digital ad format around the world, with marketers and consumers both flocking to the channel. eMarketer has curated a roundup of key trends, statistics and information relevant to marketers around the world looking to target local consumers with video content and ads.

Digital Video Advertising Around the World Roundup Copyright 2013 eMarketer, Inc. All rights reserved. 2

Digital Video Advertising Around the World Roundup SEPTEMBER 2013

Digital Video Advertising Around the World Overview

Digital video viewing has taken hold around the world, with Cisco Systems estimating 1.3 billion people worldwide will watch video downloaded or streamed over the internet this year. comScore counted the same number doing so in December 2012. eMarketer estimates there will be 185.2 million digital video viewers in the US this year, and another 34.1 million in the UK--just a fraction of the worldwide total. And in these developed markets, significant video consumption is moving to mobile, just as in the developed world many internet users are bypassing the desktop to get their digital video fix straight from smartphones.

More digital video viewers means more marketers jumping on the video advertising bandwagon, trying to take advantage of the branding opportunities afforded by video, as well as an increase in ad spending. PricewaterhouseCoopers estimates video ad spending will be up 33.8% worldwide this year, to $5.1 billion. MAGNA GLOBAL released an estimate of $6.6 billion in spending, up 21%. Another firm, Strategy Analytics, predicts 38% growth in online video ad spending this year, more than twice the average growth rate for online ads worldwide.

% of respondents

Smartphone Users Worldwide Who Have Watched orUploaded/Shared a Mobile Video While Passing theTime, by Region, 2013

Asia-Pacific40%

34%

North America39%

28%

Europe, the Middle East and Africa30%

24%

Latin America25%

19%

Worldwide34%

28%

Watched video Uploaded or shared video

Note: ages 18-54Source: Initiative, "Mobile Experience Study," July 30, 2013161983 www.eMarketer.com

% change

Online Ad Spending Growth Worldwide, by Regionand Format, 2013

Online video

Social networks

Search

Classified

Display & other

Total

CentralAmerica/Latin

America

55%

38%

27%

30%

26%

29%

Europe

35%

19%

11%

7%

4%

10%

US

31%

30%

14%

2%

6%

14%

Worldwide

38%

27%

14%

8%

6%

14%

Note: excludes mobile ad spendingSource: Strategy Analytics, "Global Advertising Forecast 2013" as cited inpress release, June 19, 2013160104 www.eMarketer.com


For Driving Engagement, Digital Video Ads Beat TV by a Wide Margin

Targeting is a key advantage for digital video

Almost three-quarters of marketing professionals worldwide planned to increase their spending on branded video content or video ads in the next year, according to a survey conducted by AOL Networks in April 2013. More than 50% of that group said that the added investment would come from TV and display budgets. Only 4% of respondents planned to draw back spending on digital video ads.

In keeping with digital advertisings frequent role as a direct-response vehicle, the study found that digital video ads beat out TV ads for achieving engagement goals: 58% of marketers thought digital video ads performed better than TV ads by this measure, compared with 15% who said engagement was worse for digital video ads.

A smaller percentage47%also thought digital video ads were better at driving awareness than TV ads. But this was still more than the 31% of marketers who said TV ads got better awareness results.

Targeting seems to be the secret sauce behind digital video ad success. The highest percentage of marketers (87%) said targeting was an important factor when planning a branded digital video campaign, just ahead of those who cited reach (85%) and content (81%).

And when marketers determine whether to put more dollars toward digital video adsand by how muchtargeting is key, with 73% of respondents saying better targeting would affect how much more they would spend on the format.

But even as marketers go all in on digital video ads, they must contend with consumer resistance to the ad format, especially compared with TV, where advertising is expected.

A Starcom study from January 2013, in which participants in the US were shown a controlled series of clips and told that they were either traditional TV programming or original streaming content, found that consumers remained more resistant to commercials in digital formats, with 45% having a negative attitude to such ads vs. 39% who had negative opinions of ads shown on TV.

But the study also showed that viewers may simply have a stronger reaction to video ads overall, whether good or bad. More consumers reported having a positive attitude toward ads in original streaming content (25%) than in TV programming (22%), as well.

It seems there is huge potential for digital video ads to deliver strong results for marketers, as long as they can identify the right audience and create compelling enough content such that viewers dont mind the intrusion.

% of respondents

Ability of Marketing Professionals Worldwide toAchieve Better Share of Awareness and Engagementwith Digital Video than TV*, April 2013

Better47%

58%

Same24%

14%

Worse31%

15%

Awareness Engagement

Note: read as 47% of respondents believe that digital video drivesawareness better than TV and 58% of respondents believe that digital videodrives engagement better than TV; includes branded video content andvideo ads; *for the same investmentSource: Be On, a division of AOL Networks as cited in press release, June 5,2013158476 www.eMarketer.com

% of respondents

Factors that Will Affect the Increase in Digital VideoSpending According to Marketing ProfessionalsWorldwide, April 2013

Better targeting 73%

Measurement 67%

Scale/reach 54%

Note: includes branded video content and video adsSource: Be On, a division of AOL Networks as cited in press release, June 5,2013158474 www.eMarketer.com


Worldwide, Digital Video Viewers Spend More Time with Live Video than VOD

Smartphones and tablets increasingly used to watch content

Digital video continues to work its way into the content-viewing habits of consumers around the world. No longer willing to have digital video habits dictated by programmers, networks and cable companies, viewers have shown a fondness for on-demand content. But is video-on-demand (VOD) the most popular form of online video?

Research from video publisher Ooyala suggests otherwise. A March 2013 analysis by the company of its customer and partner database found that digital video viewers were spending substantially longer periods of time watching live video than they were VOD content. In fact, those on PCs spent an average of 40 minutes watching live video on a per-play basis, compared with 3.15 minutes for VOD. Those on tablets spent an average of 16 minutes with live content, and only 3.6 minutes with VOD. A gap also existed among those watching on a mobile device.

Digital video viewers are also spreading their habit across an increasing number of devices, with smart mobile devices such as smartphones and tablets continuing to grow in popularity. Ooyala found that mobile and tablet views, when added together, accounted for 10% of the total number of online video plays.

Interestingly, tablets showed a higher video completion rate than either PCs or other mobile devices, underscoring how quickly viewers have taken to these portable devices for online video. Ooyala reported that 41.5% of tablet viewers in their database watched videos until their end on the devices, compared with 38.3% on a PC and 33.4% on a mobile device.

Marketers have been quick to follow audiences to these new platforms. A survey by AOL Networks conducted in April 2013 found that a majority of marketing professionals worldwide believed that digital video was better at engaging viewers than traditional television. Almost half thought online video was an improvement over television in creating awareness.

minutes

Time Spent with Video-on-Demand (VOD) and LiveVideo per Play Worldwide, by Device, Q1 2013

VOD

CTV & GC 5.1

Desktop 3.2

Tablet 3.6

Mobile 2.4

Live video per play

45.0

40.0

16.0

8.0

Note: over Ooyala's customer and partner databaseSource: Ooyala, "Global Video Index Q1 2013," June 19, 2013159220 www.eMarketer.com

Digital Video Completion Rates Worldwide, by Device,Q1 2013

Tablet CTV & GC Desktop Mobile

25% completion 72.9% 68.8% 63.1% 60.5%

50% completion 64.3% 62.7% 54.5% 52.9%

75% completion 56.2% 57.7% 48.5% 46.9%

100% completion 41.5% 47.2% 38.3% 33.4%

Note: over Ooyala's customer and partner databaseSource: Ooyala, "Global Video Index Q1 2013," June 19, 2013159221 www.eMarketer.com


Brazil Among Fastest Growth Markets for Online Video

Online video viewing in Brazil becomes increasingly social and on-demand

Brazil remains a hot-paced internet uptake market, but that doesnt mean more internet users translates to more online video viewers. According to comScore data, between December 2011 and January 2013, Brazil kept its 42.9 million online video viewers, but the share of internet users watching videos online actually shrank from 83% to 81.4% during that period.

This means that growth is coming from deepening usage, with virtually the same number of viewers watching more videos and spending more time doing so. comScore showed that the number of online videos per viewer in Brazil grew 18%from 109 to 128while online viewers were spending almost 50 more minutes streaming videos compared to just more than a year before. These numbers put Brazil ahead of UK, US and worldwide averages in terms of online video growth.

As expected, Google sites captured the attention of the majority of online video viewers in Brazil. But videos shared on social networks are gaining ground. Facebook showed over 400% growth in video viewing between December 2011 and December 2012, compared to a 7% drop for YouTube.

When it comes to content, consumer data from ad network Hi-Midia and research company M.sense revealed online video viewers in Brazil had strong interest in musicwhich reinforces VEVOs second place in comScores ranking. Following the traditional popularity of humorous videos, movies were one of the leading interests among respondents.

Helping to explain the popularity of movies online, a May 2013 study from research institute Dataxis showed 2.48 million video-on-demand (VOD) subscribers in Brazil this year. Dataxis forecast the market will reach 4.2 million subscribers by the end of 2014, and breaking 13 million by 2017an average 50% growth per year that puts Brazils VOD market ahead of Mexico, Argentina, Chile, Colombia, Peru and Venezuela.

Online Video Metrics in Brazil, Jan 2013

Unique visitors (millions) 42.9

Penetration rate 81.4%

Videos (billions) 5.51

Videos per viewer 128.4

Minutes per viewers 684.5

Minutes per video 5.3

Total minutes 29,358

Source: comScore Video Metrix as cited by Interactive Advertising BureauBrasil (IAB Brasil), "Indicadores de Mercado Online - Mtricas de Audinciae Pesquisa de Mercado," April 12, 2013160759 www.eMarketer.com

millions

Top 10 Online Video Content Properties AmongInternet Users in Brazil, Ranked by Unique Viewers,Dec 2011 & Dec 2012

1. Google sites

2. VEVO

3. Facebook

4. Globo

5. Viacom Digital

6. UOL

7. Yahoo! sites

8. Terra-Telefonica

9. R7 Portal

10. Videoslasher.com

Dec 2011

42.1

18.1

3.4

8.0

8.4

4.8

1.5

1.7

1.4

-

Dec 2012

38.9

17.7

17.5

14.9

8.4

6.5

6.2

4.1

3.7

3.2

% change

-7%

-2%

408%

86%

1%

34%

318%

136%

172%

-

Note: ages 15+; home and work locations; excludes traffic from publiccomputers, such as internet cafes, mobile phones and PDAsSource: comScore Video Metrix as cited in press release, Feb 6, 2013152517 www.eMarketer.com


UK Consumers, Ambivalent to Mobile Video Ads, Get More Ad-Free Options

ITVs subscription-based mobile catch-up service takes ads out of the equation

According to May 2013 research from QuickPlay Media, only 22% of UK smartphone or tablet owners found video ads on their mobile device more appealing than those on TV. By all measures, UK viewers were less engaged by mobile video ads than viewers in the US.

It is not particularly surprising that UK viewers were more comfortable with ad programming on TV, given the UKs longstanding comfortability with this medium, and the associated acceptance of ads as part of that landscape. But as TV and video-on-demand (VOD) viewing become available on mobile devices, consumers are developing new expectationsand less intrusive advertising is one of them.

There is evidence to suggest that VOD is gaining traction in the mobile space. The UKs most popular catch-up service, BBCs iPlayer, saw requests to PCs drop in March 2013. While requests to nontablet mobile devices also dropped slightly in February, those requests seem to have leveled off, while tablet requests saw a marked rise. The upshot is that combined requests to both mobile and tablet devices were reaching parity with those to PCs.

The commercial broadcaster ITV has taken these two pieces of evidence into account and launched a subscription-based ad-free catch-up TV service. This service is offered for a flat fee of 3.99 ($6.33) per month. Meanwhile, the traditional ITV Player service that carries advertising remains in service, giving consumers a choiceif their aversion to mobile video ads is strong enough, there is now an option open to them; otherwise, its business as usualeven on mobile.

% of respondents

Attitudes Toward Mobile Video Ads According to USand UK Smartphone/Tablet Owners*, May 2013

I'm more likely to react to a video ad on a smartphone or tabletthan on a TV

30%

25%

I pay more attention to video ads on my mobile device(s) than onTV

27%

23%

Video ads are more appealing on my mobile device(s) than on TV25%

22%

US UK

Note: US n=457; UK n=479; ages 18-60; *who use their device for liveTV/video-on-demand (VOD) viewingSource: QuickPlay Media, "2013 Consumer Survey," June 10, 2013158604 www.eMarketer.com

millionsBBC iPlayer TV Requests*, by Device, Jan-March 2013

Jan 2013 Feb 2013 March 2013

Computers 87 76 79

Tablets 37 35 38

Mobile devices 38 33 33

TV platforms 30 31 31

Video game consoles 13 11 8

Unknown 2 3 6

Total 212 194 200Note: includes on-demand catch-up (streams and downloads) and livesimulcasts; excludes download playback and web-only content;*successful requests to stream or download a programSource: BBC iStats, "BBC iPlayer Monthly Performance Pack March 2013,"April 19, 2013156179 www.eMarketer.com


Big Leap for Digital Video Views in India

Regular viewers tune in more often

As internet penetration rises in India, the digital video audience is growing fast. Between March 2011 and March 2013, unique visitors to video sites rose 69%, for a total of 54 million unique video viewers at the end of the observation period, according to comScore Video Metrix. But not only are more web users tuning in to video in India, they are watching more videos and spending more time streaming.

The number of videos viewed grew even faster than unique visitors, doubling to 3.71 billion. And the average viewer watched 68.7 videos in March, for a total of 431.5 minutes of digital video viewing.

Unsurprisingly, Google, which owns YouTube, was the top video site in India by a wide margin, visited by 31.5 million unique viewers. Facebook came in second, with 18.6 million viewers. Meanwhile, Dailymotion did not make the top five list for unique viewers, but it did garner the third-highest number of viewing sessions per month, at 83 million, suggesting that when users stream via Dailymotion, they come back for more.

With its massive population, India ranked as the No. 5 country for online video viewers in an earlier, December 2012 study from comScore Video Metrix, but it was much lower down the list that month for total videos viewed, at No. 20. As web use rises, unique video viewers and videos consumed will also go way up.

Online Video Viewer Metrics in India, March 2011 & March 2013

March 2011

March 2013

% change

Unique visitors(millions)

31.9

54.0

69%

Videos(millions)

99%

1,863.9

3,713.1

Videos perviewer

58.3

68.7

18%

Minutes perviewer

337.8

431.5

28%

Note: ages 15+; home and work locationsSource: comScore Video Metrix as cited in press release, May 7, 2013156872 www.eMarketer.com

Top 10 Online Video Properties Among Internet Usersin India, Ranked by Unique Video Viewers, March 2013

1. Google sites

2. Facebook

3. Yahoo! sites

4. VDOPIA.com

5. TubeMogul Video Ad Platform

6. Dailymotion

7. Adotube

8. Komli Play

9. Viacom Digital

10. VEVO

Total video viewers in India

Uniqueviewers

(millions)

31.5

18.6

8.2

6.4

5.5

4.3

4.0

3.9

3.7

2.9

54.0

Viewingsessions(millions)

2,068.2

150.6

37.6

23.5

29.1

83.0

6.0

17.4

11.7

13.7

3,713.1

Average timeper viewer(minutes)

257.8

21.9

14.6

1.5

1.4

59.6

0.6

2.3

7.1

13.6

431.5Note: ages 15+; home and work locationsSource: comScore Video Metrix as cited in press release, May 7, 2013156926 www.eMarketer.com


More Digital Video Views in China Go Mobile

PC still dominates

The PC remains the dominant place where viewers in China watch digital video. But there is no question that mobile is quickly supplanting some of that activity. In September 2012, mobile accounted for only 4.5% of total time spent with digital video in China, according to research from iResearch Consulting Group. Just nine months later, in May 2013, that share had almost doubled to 8.8%.

The study found the digital video ad market rose 49% in Q2 2013, compared to Q2 2012. Advertising accounted for about three-quarters of total digital video revenues.

An iResearch Consulting Group study from March 2013 showed the significant devotion web users in China have toward digital video. Time spent viewing videos on the PC reached 5.3 billion hours that month. However, that was down from the 5.4 billion hours spent viewing online video in October 2012.

Mobile could account for some of this decline. The number of hours spent viewing video on the PC likely decreased as more mobile users looked to their phones and tablets to watch the latest short- and long-form video content.

comScore estimated that 289.9 million residents in China watched online video in December 2012. That is already a substantial audience, and with the addition of mobile viewers, the digital video ad market will continue to see strong growth.

% of total

PC vs. Mobile Share of Time Spent with Digital Videoin China, Sep 2012-May 2013

Sep 201295.5% 4.5%

Oct 201294.4% 5.6%

Nov 201294.0% 6.0%

Dec 201293.6% 6.4%

Jan 201392.7% 7.3%

Feb 201391.8% 8.2%

March 201392.0% 8.0%

April 201391.5% 8.5%

May 201391.2% 8.8%

PC Mobile

Source: iResearch Consulting Group as cited in company blog, July 31, 2013162526 www.eMarketer.com

billions of hours and % change vs. same period of prior year

Monthly Time Spent Viewing Online Video by OnlineVideo Viewers in China, Oct 2012-March 2013

% change vs. sameperiod of prior year

Oct 2012

Nov 2012

Dec 2012

Jan 2013

Feb 2013

March 2013

Time spent viewingonline video

5.4

5.2

5.5

5.7

4.7

5.3

18.6%

11.2%

14.3%

10.7%

-5.0%

9.7%

Note: PC only; excludes mobileSource: iResearch Consulting Group, "Q1 2013 China Online Video Report,"July 2, 2013160205 www.eMarketer.com


Mobile, Video Drive Up Digital Ad Investment in the UK

Search to retain more than a 50% share through 2017

Though the UK economy continues to struggle, digital ad investments, which include online and mobile formats, are growing robustly. Spending is expected to reach 6.1 billion (more than $9.68 billion) this yeara 12.0% increase from 2012and grow by another 12.5% in 2014.

eMarketer expects expenditures on digital advertising to surpass 7 billion (over $11.11 billion) by 2015 and 8 billion (nearly $12.7 billion) by 2017.

Estimates for UK digital ad spending are close in line, with most figures ranging from $8.3 billion to $8.6 billion in 2012 and $9.2 billion to $9.7 billion in 2013. Projections from ZenithOptimedia are lower than other sources, primarily due to the exclusion of mobile advertising. Four of the five firms providing estimates for 2013, with the exclusion of ZenithOptimedia, expect UK digital ad spending to be over $9 billion.

The majority of research firms providing forecasts for UK digital ad spending growth in 2013 predict increasesand expect gains to continue on a steady trajectory.

Search remains the most popular digital ad format, though display is steadily gaining momentum among advertisers. eMarketer expects search spending in the UK to increase from more than 3.57 billion (around $5.67 billion) this year to nearly 4.46 billion (over $7.07 billion) in 2017. At the same time, display investments are projected to climb from almost 1.5 billion (about $2.38 billion) to more than 2.73 billion (around $4.34 billion), primarily driven by strong demand for video and real-time bidding.

Videos share of the digital ad spending pie will grow dramatically, as marketers develop more advertising content for the expanding UK digital video audience. eMarketer projects that the number of internet users who watch video content online at least once per month will rise from 34.4 million to 40.0 million between 2013 and 2017. During that same time period, video will increase from 4.0% to 12.4% of digital ad investments in the UK and more than quadruple in ad dollars.

billions of and % changeUK Digital Ad Spending, 2011-2017

2011

4.8

17.4%

2012

5.4

12.6%

2013

6.1

12.0%

2014

6.8

12.5%

2015

7.4

8.0%

2016

7.9

7.0%

2017

8.4

6.0%

Digital ad spending % change

Note: eMarketer benchmarks its UK digital ad spending projections againstthe IAB UK/PwC/Warc data for which the last full year measured was 2012;includes categories as defined by IAB UK/PwC/Warcbanners, classifieds,email (embedded ads only), lead generation, mobile SMS/MMS, rich media,search, sponsorships and video; includes mobile ads within the existingformatsSource: eMarketer, June 2013; confirmed and republished, Aug 2013159001 www.eMarketer.com

millions of UK Digital Ad Spending, by Format, 2011-2017

Search

Display*

Video

Classifieds

Other**

Total

2011

2,769

1,143

109

778

118

4,809

2012

3,168

1,304

160

854

89

5,416

2013

3,573

1,498

244

898

97

6,066

2014

3,965

1,802

378

955

102

6,824

2015

4,164

2,093

565

1,002

111

7,370

2016

4,290

2,453

834

1,025

118

7,886

2017

4,455

2,733

1,039

1,045

125

8,359

Note: eMarketer benchmarks its UK digital ad spending projections againstthe IAB UK/PwC/Warc data for which the last full year measured was 2012;includes mobile ads within the existing formats; *banners, rich media,sponsorships, video; **lead generation, mobile SMS/MMS, solus emailSource: eMarketer, June 2013; confirmed and republished, Aug 2013159002 www.eMarketer.com


Mobile, Video Drive Up Digital Ad Investment in the UK

Mobile ad spending will help drive digital ad growth throughout the forecast period, with percentage gains of 90.0% expected for 2013. The UK has a solid mobile internet audience and strong smartphone and tablet adoption rates. Advertisers are investing in mobile search and display formats to engage the countrys increasingly multiscreen user base.

With ad investments totaling 999 million (nearly $1.58 billion), the UK is the worlds third-largest market for mobile ads. In 2013, only the US and Japan will outrank the UK in mobile ad spending.

millions of and % changeUK Mobile Ad Spending, 2011-2017

2011

203

144.8%

2012

526

158.9%

2013

999

90.0%

2014

1,599

60.0%

2015

2,319

45.0%

2016

3,014

30.0%

2017

3,707

23.0%

Mobile ad spending % change

Note: eMarketer benchmarks its UK mobile ad spending projections againstthe IAB UK/PwC data for which the last full year measured was 2012;includes display (sponsorship, standard display, video and other displayformats), search, and other (classified, mobile SMS/MMS, tenancies andother)Source: eMarketer, June 2013; confirmed and republished, Aug 2013159015 www.eMarketer.com


Case Study: NIVEA Uses Humor to Get Men to Face Grooming Facts

Eight-episode online comedy series becomes digital CPG campaign

As personal care brands expand their offerings to men beyond the basics of body wash, shampoo and shave cream, they are thinking differently about how to engage the male shopper, who can be overwhelmed by choice and underwhelmed by traditional advertising.

NIVEA MEN, a skincare brand from Beiersdorf AG, used the knowledge it gleaned from consumer research showing that men found shaving to be irritating to their skin. The company created an eight-episode online comedy series that became the backbone of the brands digital campaign. Nivea partnered with Break Media, which creates online digital content targeted to men to create the series, called Just Face It. It featured comedian Damon Wayans, Jr., living through daily irritations such as enduring annoying co-workers and dealing with overcomplicated technology.

According to Mitch Rotter, executive vice president of programming for Break Media, the insights, which came from Breaks Acumen research platform, helped structure the storyline and shape the humor of the series. In addition, Rotter said Wayans insights added to the authenticity of the situations and made the series funnier.

Humor is an especially effective method of engaging male consumers online, as noted in the eMarketer report, Groomed For Growth: Digital Strategies Reach Men in the Personal Care Aisle. To guide the campaign, NIVEA leveraged that knowledge, as well as July 2012 data from Break Media, which showed 70.4% of male web users streamed video from free sites. Ultimately, the campaign included a branded hub on MadeMan.com, where the series aired, as well as sweepstakes and editorial content on the site.

We felt creating a comedy series would capture the audience and continue to engage them over the course of the campaign, said Carole Rissmann, senior director of marketing at Nivea North America. The effort, she said, created relatable situations that not only spoke to our audience, but reinforced the brand message.

According to NIVEA, the success of the campaignthe series received more than 3 million views, and the NIVEA MEN-branded hub on MadeMan.com received more than 270,000 page viewsproved that men are interested in engaging content about personal care, especially in the digital realm.

The main goal was to educate men on the role quality skincare products can play in the shaving routine, Rissmann said. But by leveraging the irritating insights, we were able to approach the topic from another perspective, and create an engaging experience for its target audience.

Metrics for NIVEA's MadeMan.com Campaign, June 2013

More than 3 million video views

More than 25,000 "likes" on Facebook

5,200 mentions of the campaign across Twitter

740,000 total user interactions with video across YouTube, Twitter and Facebook

Visitors spent more than 3 minutes on the NIVEA Men-branded hub on MadeMan.com

Note: campaign ran from May 7-June 7, 2013Source: Break Media, July 19, 2013161044 www.eMarketer.com


What Is the Value of Made-for-Web vs. Linear TV Video?

Colleen Whitney

Senior Vice President, Media Director for Chicago and San Francisco

DigitasLBi

Whirlpools KitchenAid brand rolled out three of its first made-for-web video spots this past July on Hulu as part of its Theres So Much More to Make campaign. Colleen Whitney, senior vice president and media director for Chicago and San Francisco at DigitasLBi, spoke with eMarketers Danielle Drolet about the KitchenAid digital effort, as well as advertisers increasing curiosity to align original, made-for-web ad creative with exclusive web programming.

eMarketer: When is a brand right for and ready to activate a made-for-web video ad format?

Colleen Whitney: KitchenAid, in particular, has a highly engaged audience that is very targeted. Its an upper-income woman who has a passion for expressing herself through cooking. This, coupled with the core insight that these consumers are looking for the tools to inspire and help them achieve that passion, led us to the idea that we can create highly engaging content for this narrow audienceand deliver it in a very targeted and contextually relevant way that will increase engagement and return on investment.

eMarketer: Why are these video spots a likely next step for brands beyond linear television?

Whitney: Consumers are hungry for more online content, whether thats premium-produced content from publishers or brand-produced content thats relevant to a particular consumer group. There continues to be increased demand, as well as time spent with that content online. We are encouraging our brand clients to play in that space in a strong way.

We look at it in a couple of different ways, either partnering with the publishing community to create the content or, such as in the case with KitchenAid, create exclusive content for our clients. It comes in a couple of different models for us, but we certainly believe there is a huge opportunity.

eMarketer: Do you have any metrics to share for the KitchenAid campaign?

Whitney: Its only been in the market for a couple of weeks, and we dont have specific metrics for this effort yet. Anecdotally, we are seeing a lift in social sharing and conversation around the video, as well as the associated content thats being put out. There is a whole series of associated custom recipes, as well.

Across the industry, about 10% of the digital budget is going to online video. But many of our clients are already spending more than this.

The primary role of online video for this brand is to drive brand lift. The measurement plan includes looking at both attitudinal and behavioral metrics. For attitudinal metrics, were looking at brand studies to check lift post-exposure. Then, from a behavioral perspective, were looking at the in-view experience, which includes monitoring completion rates, engagement with interactive companion banners, and so forth. We are also looking at brand site engagement metrics such as looking at attribution modeling to understand how online video is going to assist in driving conversion.

eMarketer: Are marketers looking to increase spending in made-for-web video ads?

Whitney: Without a doubt our clients are going to increase spending on online video overall. Across the industry, about 10% of the digital budget is going to online video. But many of our clients are already spending more than this. Its at a tipping point, where dollars are going to start to follow the consumer time spent.



Within that we will increase investment in made-for-web content because the quality gets better and better. When we use it, we see positive lift in engagement metrics. The key, though, is that the online publishers have to continue to help us drive the model by investing in the discoverability of the programming. Its important that we continue to increase the scale and reach. Online video is growing, but its still behind in reach compared with linear television.

eMarketer: How does an ad buy differ for a made-for-web show vs. a linear TV show?

Whitney: There is a big cost differential between the full episode players (FEPs) vs. made-for-web video content. FEPs can be as much as 50% or 60% higher from a cost-per-impression perspective. In addition, when you look at industry research, Tremor Video reported earlier this year that the results are virtually the same for made-for-web content and TV content online. It was looking at things like clickthrough and ad completion.

Online video is growing, but its still behind in reach compared with linear television.

However, we have found for some of our advertisers, and again, theyre in more vertical categories, that awareness measures are indeed equitable. Engagement metrics such as clickthrough and activity around high-value tasks are better for the short-form, midtier content than they are for the FEPs. These are based on studies via DART Logic.

eMarketer: Will the recent Emmy nod for Netflixs House of Cards for best drama series present more opportunities for brand marketers?

Whitney: We are watching Netflix very closely, as is everyone else in the industry. There are two big impacts to date based on what it is doing. It is really raising the bar for the standard of quality for online original programming. There is no doubt about it. It took HBO 25 years to get its first Emmy nomination. It took Netflix six months.

Netflix also has this deal with DreamWorks Animation, which is a game changer in terms of the quality of the content thats going to continue to come into the online

ecosystem. But the other element is that it is changing the distribution model, which means we need to ensure were driving discoverability of this high-quality content.

Netflixs move to release all of its episodes simultaneously is different from the linear TV model, and it changes consumer expectations. Its only a matter of time before we figure out ways for brand marketers to partner with and capitalize on this.

eMarketer: On Hulu in particular, ad loads are getting heavier, yet these ads are more repetitive than on TV. Does this need to be discussed more?

Whitney: Yes. Clutter is a big issue. Historically, one of the benefits of advertising with online video vs. linear TV was that it offered an environment that was less cluttered, which is detrimental to key metrics like awareness as well as brand and message recall. Its key to be mindful of frequency capping in addressing clutter on behalf of consumers.

Its also about looking at creating more ad executions and creating truly compelling ad executions, such as the KitchenAid video, to engage consumers. Its a numbers game, but its also about the quality of the content brands are putting out there that engages consumersso you dont drive them away.

eMarketer: Besides streaming platforms, what opportunities are there in gaming platforms? Microsoft is planning on creating its own original video programming for Xbox, which could potentially carry ads.

Clutter is a big issue. Its key to be mindful of frequency capping in addressing clutter on behalf of consumers.

Whitney: All of our clients are really interested in what Xbox is doing and how you can use the gaming platform as a marketing effort. Xbox is positioning itself as more of an entertainment destination and less of a specific gaming platform. Were interested in the Kinect technology and the opportunity it provides to build native interactive brand experiences.



Xbox is still in the development phases in how this all comes together with original content as a pillar, but it is making a huge investmentin talent as well as in infrastructure. Were watching it closely.

eMarketer: What are clients concerns when considering made-for-web video ads?

Whitney: At a high level, it still can often be a decision between linear TV dollars and online video dollars. The historical momentum behind what we know works on linear TV sometimes causes clients to pause. At the end of the day, dollars are finite, and we have to make decisions about where to invest in various channels.

We get many questions about the efficacy of online video vs. linear television. That said, within the online video environment, there are a couple of things we discuss a lot with clients. Its a very complex marketplace with FEPs, online originals, endemic short-form [content], live streaming of events, multiple players, ad networks, and so forth. Frankly, its not easy to buy. A challenge we have put forth to publishers is to partner with us to make it easier to buy for our clients. We will all win in that scenario.

The way people watch video is evolving.The way to buy and sell video advertising should evolve, too.

Media evolves. Adapt.

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EMarketer Digital Video Roundup, Sept 2013

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