The Advertiser’s Dilemma

The typical life of an internet video goes somewhat like this: someone uploads the video to a video sharing website (YouTube, Google Video, Metacafe, Dailymotion, your pick) and sends links to his friends telling them to watch the video. One of them thinks it’s funny and passes it around. Some other guy finds it on the website, writes a comment and shares it with his contact list. If the video is really funny, sometimes (not always) it will explode and become an internet hit (like the Star Wars kid or Pinky the Cat). Millions will watch it and pass it around. And eventually it’ll become old and die a natural death (sometimes to be resurrected further down the line).

As an advertiser, you’d want to identify these runaway hits before they become a success (thus minimizing the number of eyeballs lost to your message). As a content producer, you want to convince advertisers to buy space on your video, before you lose the advertising value of all those eyeballs.

So, how do you maximize your return on advertising on web videos?

Traditionally, we could say advertisers have it easy (though I’m aware how hard ad buying really is). Television networks have been around for a long time, have time tested products, experienced programmers deciding what gets on the air and when, and a captive audience. They also have a company (AGB Nielsen) that measures all these shows down to the minute, reporting on the age, sex, location and income level of the viewers.

The internet, however, presents a whole new set of unknowns. Most content delivery websites have no control over their content producers nor do they know who these producers are. There’s no experienced programmer deciding what gets showcased (CurrentTV does, but they have a different business model and approach to web video); instead, other users rate the videos according to their personal tastes (and with a little work this system can be gamed very easily). Finally, there’s no real measuring going on (I’ve written about this particular issue here, here and here). Most websites simply tell you which video has been viewed the most, or ranked the highest (again, with highly suspect numbers). And what they know about their users is usually limited to their email address, what they’ve published, viewed or ranked and maybe an IP address that can suggest where they connect from (which used properly can be a very useful variables).

As an advertiser, you’d want to optimize your purchases (as opposed to buying ads on every conceivable video and hope one of them becomes an internet sensation). But by the time you can tell a video is a runaway hit, you’ve not only probably lost the majority of your potential audience (sort of like entering a pyramid scheme at the bottom), but you’ll also have to pay a premium to advertise on that now world famous video.

We need tools that can track the spread velocity of a video, their viralness, so to speak. We also need to define new demographic variables, based not only on age / sex / location / income but more importantly on interests and social connectivity. When you have 14-yr olds playing online games against 30-yr olds, age and sex are no longer as relevant as what interests these people share.

Of course you can simply blanket every uploaded video with your advertising, but would you rather be that ad on every lousy home video, or that cool ad on the hilariously popular video-du-jour?

Technorati Tags: Content Delivery Networks, Demographics, Digital Media Strategy, Advertising, Ratings, Web Video