Producing Value and Revenue with Digital Video
BIA/Kelsey participated in a thought leadership summit hosted by the American Press Institute yesterday at NPR’s headquarters in Washington, DC to explore content and revenue strategies around digital video with about 50 participants. Five discussion panels covered topics ranging from “audience and devices – who’s watching and how” to “how to build video into your organization.” Speakers came from major publishers including CNN, ABC News, NBC News, USA Today, New York Times, Wall Street Journal, The Atlantic and more locally oriented publishers including Minneapolis Star Tribune and Desert Digital News. Overall, the theme was still a lot of experimentation and balancing journalism ethics and valuable brands with what makes the editorial, audience and advertiser needles move in digital video. Spoiler alert, it’s rarely the same thing. In fact on the BIA/Kelsey panel we focused on “Identifying Helpful Metrics for Your Strategy” and even that exposed some diversity/conflict in terms of how to judge success.
Here’s a set of five take-aways from this leadership summit on digital video:
1. Keep your focus on multiple balls in the air or you may never succeed. You can’t pick a favorite key performance indicator and use that as your North Star to navigate to success in digital video. Your organization must understand and embrace in a serious way multiple metrics around content quality (i.e., editorial as well as audience appeal), promotion (leveraging social channels), device and platform responsiveness (phones, tablets, desktops and various networks from WiFi to 4G), type and number of ad units, revenue generated, cost of video, distribution and partnerships (use social media and partners – even the major publishers can have more traffic driven by third party sites than they can do themselves), and a host of metrics ranging from streams viewed to completion rates to CPMs, etc. You can’t kill it on a subset of these factors and sustain success, your organization must be built around all these factors to get to scale.
2.Use social media as a promotional tool and not as part of your product. Mashable’s Ashley Codiani really drove the point home that came up several times. “Good video” by whatever standard needs to be found if the audiences and advertisers are to get engaged. Each video package whether a 6-second short or a “long form” 10+ minute video that gets published should have a standard constellation of social packages going out to drive views. Each social channel tends to have its own follower list so use them all and drive maximum exposure through shares. Condiani advises posting to Facebook, Instagram, SnapChat, Vine and leverage all these audiences. One example in private discussion was that one of major newspapers produced an awesome (by journalistic standards) and well produced video but it generated only 800 views. With a $20 CPM that’s a total of $16 per ad unit. That doesn’t cut it and social channels can help drive those shares and views.
3. Create a valuable ad product. New York Times’ Rebecca Howard shared that until last year the NYT was selling “run of site” ad inventory, not ads against specific audiences or content. By working with a company like FreeWheel, they were able to create much more valuable inventory. This also ties into the content strategy. For example, CNN’s Ed O’Keefe says they learned to tell the story in different ways for different devices. To drive viewership in mobile, “tell the end of the story first.” That will then engage viewers to go deeper into the video for higher completion rates. Similarly, NYT’s Howard urged that publishers make smart use of recommendation engines to lift content and generate more views. She noted that YouTube is the second largest search engine and is about video discovery. Once you get a viewer to the site, add value to user experience and advertiser value by showing recommended videos based on the one they’re viewing.
4. A tale of two cities – there is unlimited demand for video content, there is too much video content. In a sort of intellectual contortion, panelists shared that there is “too much video content out there” at the same time the wisdom of the crowd was that “we need more video to meet demand.” What’s going on here? Premium video with a publisher brand and high production quality tends to be in short supply. Even the NYT does barely more than a video a day. Yet as Allen Klosowski from SpotXchange related, “we see over a billion video trades a day.” While video inventory tends to get sold out either by first parties or through exchanges, the demand for better video continues. But it is expensive and time consuming to produce. So don’t be afraid of 6-second videos in the inventory as traffic drivers and audience extenders. VICE’s Drake Martinet suggested, “think about video as living in different lanes…news videos have to come out fast or if we wait 3-4 weeks for a highly produced video the publisher’s brand can be proud of the Ukraine may well be part of Russia by then. Go for quantity and timeliness with video shorts for news and think about a different lane for the more highly produced videos.
5. There is money in digital video! BIA/Kelsey data show that video is high growth. Rahul Chopra from News Corp/Wall Street Journal predicted that, “in five years 50% of our revenue will be from video.” The money picture among summit participants ranged from loss leader to high growth, “but we’re still experimenting.” It’s clear that no one yet has, or is willing to share, any insights for the easy road to high profits in digital video. It appears that participants are learning digital video is a complicated if promising ecosystem and the code has not yet been cracked by publishers even as the programmatic exchange do video trades in the billions.
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