Iíve been feeling more political lately. Iím not sure why, since the state of politics is at best annoying, and at worst -- really annoying. But I do find myself in an interesting love/hate quandary in my feelings about Barack Obama and his agenda, with my level of love or hate based on whether Iím feeling more patriotic or selfish.
On the patriotic side, well, Iíll keep my opinions to myself, so as not to offend Obama supporters. My selfish side, however, thinks Obama will be a boon for the online video industry.
Hereís the way itíll break out: Increased taxes and costs associated with Obamacare, along with a continued drag on the economy, will cause companies of all sizes to reduce their budgets. Typically, when that happens, the marketing budget is the first to get slashed (CEOs and CFOs donít always understand the value of brand-building campaigns, and agencies far and wide will waste their energy proclaiming that times of strife are the best times to advertise more, not less. I really donít miss my agency days...).
So, with less of a marketing budget, and an increased need to show more immediate results, marketing directors will be forced to upend their standard marketing strategies. The end result? They'll allocate less of their budget to TV, print, and other, more expensive media, and more to online advertising. In other words, weíll see an influx of online ad supply in the coming year.
Hooray for online video! Too bad for the country and democracy in general, but hooray for online video!
But letís continue to play this out, and understand what it means for the online space and for marketers. While marketing budgets will be getting slashed, so will investment dollars. An increase in the capital gains tax rate will mean reduced incentive for investors to pour money into riskier ventures. Not only will fewer online video networks (and large scale, video-enabled sites) launch in 2013, but weíll likely see a shakeout of less successful networks that have already launched, but are struggling to find and maintain an audience.
With fewer places to advertise and an increase in ad supply, any Economics 101 textbook will tell you that average ad prices will go up.
To avoid paying higher prices for pre-roll ads that nobody wants to watch, but to maintain relevancy and build an audience in the growing online video space, marketers will (or should) begin to get more creative with their presentations. This especially applies to production or branded content.
Ad Budgets Change Course
Executives on Madison Avenue could be reworking their budgets to focus more on
online and video in coming years.
Branded content is basically long-form advertising that can last for a minute, two minutes, or however long it can run without turning viewers away (usually, three minutes is about where most online viewers start to get bored and go elsewhere, unless theyíre watching an episode of Breaking Bad, or some other show they would usually watch on TV).
The difference between branded content and a pre-roll is that as a branded content piece, itís not getting in the way of what the user wants to watch -- it is what the user wants to watch. And rather than being a direct pitch, the content actually provides entertainment, information, or something else of value, presented by a particular brand.
Production costs donít have to be budget breaking, and high production quality for online video isnít difficult to achieve. Whatís more, branded entertainment plays better to audiences and can gain an online and social media following far better in two or more minutes than any pre-roll can do at 30 seconds.
— Jay Miletsky is founder and CEO of MyPod Studios, an online video network featuring pre-screened, pre-qualified video content. He is a best-selling author of 10 marketing, branding, and Internet-related books, and is a frequent speaker at seminars and universities.