Mark Trefgarne

Time for online video to step out of TV's shadow

Sat, 04 Feb 2012 09:47:18 -0800

This article was originally published on AdAge

Whether digital marketers want to admit it or not, TV is the most powerful branding medium of all time. Online video is a close digital corollary, but we still haven’t seen the big shift in brand advertising dollars from traditional to digital that many are hoping for.

The problem is that since its inception, online video has been sold as a TV alternative. However, online video has neither the scale, nor the simplicity of TV, nor should it aspire to. For brand marketers, TV’s appeal has always been the ease with which it delivers incredible reach. But with a fragmented publisher landscape, a sea of acronyms and complex technology, online video will never be “easier” to buy than TV. Competing head to head with television will therefore never deliver the flood of dollars we as an industry are hoping for.

In order to encourage marketers to shift budgets, the digital industry needs to stop selling online video as TV’s smaller, harder brother, and start emphasizing online video’s incredible power to deliver brand advertising in ways marketers have never before thought possible.

The most obvious game-changer for brand marketers is the power of audience targeting combined with real-time bidding. Large-scale TV campaigns may be easy to execute, but buying American Idol and hoping its audience approximately matches your target customer’s demographics is a little like shooting blindfolded. Never has the old adage been more true than when applied to TV: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.

If brands can avoid the buy-and-pray crapshoot of TV by utilizing audience targeting and real-time bidding to target one-to-one, why are they still trying to emulate the TV buying model online?

If online video sellers would only embrace this technology, they could potentially out-sell their TV counterparts. Instead of competing with TV head on, online must go above and beyond by offering a product that is a generation ahead of the competition.

Creative personalization is another huge plus on video’s side, and it’s very closely related to targeting. Online video lets advertisers swap out creative in real-time so that they’re not only putting their brand message in front of the right consumer, but putting forth the best, most relevant, creative as well. Think of a company like Geico, with its endless supply of characters and pitchmen. In the TV world, the agency would pick one, run the campaign for three months nationally, wait months for panel response data, and then analyze the campaign’s impact on sales before choosing whether to re-air the commercial. Online video offers A/B testing in real-time, across multiple demographics/geos, and creative adjustments that happen within minutes, not months. An advertiser can rapidly figure out that while female consumers respond well to the Gecko, males prefer cavemen, enabling the marketer to achieve higher performance and dramatically less waste.

Of course, online video companies have used creative to differentiate video from TV in the past, largely through the use of overlays and interactive elements that encourage consumer participation. While engagement can be great, the coming wave of connected-TVs — with their uncertain standards and interactive capabilities — will make interactive video ads hard to deliver at scale, and put the onus squarely on targeting.

When a consumer sees a digital ad served on their TV in a full-screen, high-definition experience – where the mouse is absent — interactive skins, overlays, and clickable elements won’t matter as much as strong targeting.

Consumers are spending time online, there’s no arguing that. But they’re still spending time on TV, and no advertiser is going to give up on a proven channel like TV if video presents itself as a lesser alternative. Its time to stop whining about missing brand dollars and start emphasizing what TV doesn’t have. Online media sellers need to adopt audience targeting, creative optimization and metrics, and then sell these capabilities to brands. The only way brands will use video to supplement their other buys is if it helps them drive sales, so let’s show them how it works.

Mobile Data Usage

Fri, 06 Jan 2012 10:04:57 -0800

Mobile Data Usage

How Xbox Is Giving the TV Its 'iPhone Moment'

Thu, 22 Dec 2011 15:07:56 -0800

This post was originally posted on AdAge
http://adage.com/article/digitalnext/xbox-giving-tv-iphone-moment/231535/

The latest update to Microsoft’s Xbox 360 video game system is making it easier for users to access video content, including video streaming services like Netflix, Hulu, ESPN, TMZ and HBO. It’s great for consumers who want one box for all their home entertainment, and it’s even better for marketers who have been waiting for connected TV to take hold.

While Microsoft may chafe at the comparison to Apple, this could very well end up being connected-TV’s “iPhone moment” — the product launch that blasts new technology into the mainstream and makes everything that preceded it pretty much irrelevant. Kinda like what Apple did to the lowly cell phone in 2007. Apple ushered in the current smartphone revolution with the iPhone by re-imagining the interface, usability and form-factor of the cellphone. Similarly, Microsoft just fired the starting-gun on the connected TV revolution simply by updating its existing product and the fixing the sloppy interfaces that plague other connected TV offerings.

Xbox was designed from day one as a video-game system, and has gradually added internet-features like streaming Netflix movies and music from Last.fm over the past few years. With these features, Xbox had already earned a place as an entertainment hub in millions of living rooms, giving it a significant head start against the array of competing devices vying to be the internet gateway for TV. With nearly 58 million devices already sold, Xbox has the install base to change the way consumers view streaming video on their TV sets.

With such a large number of consoles sold, it would only take a fraction of users to adopt Xbox as their primary video-delivery platform for Microsoft to find itself the proud owner of the country’s largest “cable network” – without the cables. Traditional operators like Dish and DirectTV boast subscriber numbers in the sub-20m range, so Microsoft’s install base alone gives it the footprint to rapidly become a significant player in TV.

To achieve this goal, Microsoft doesn’t even need to deploy a new physical device, but has demonstrated that a software update pushed to its network of connected devices can re-invent their primary purpose. Xbox’s internet-connected, HD-capable hardware, combined with a superior interface for discovering and controlling on-demand video content makes it a natural breakthrough product for the medium. The Xbox can be for IPTV what the iPhone was for smartphones.

Of course, just like the iPhone, the new Xbox interface comes with ad opportunities. As users scroll through the Xbox dashboard, there are multiple ad opportunities in the form of video and interactive ads, both in the interface and before or during the streaming video content. Microsoft has played with advertising on the Xbox before, but the arrival of video apps opens the console to the brave new world of in-stream video advertising and provides content owners a gateway to deliver advertising to their viewers.

The arrival of HD, full-screen video on such a user-friendly internet-connected device creates an incredible opportunity for advertisers. Marketers can leverage the granular targeting and real-time bidding technology of online video in a full-screen, HD, lean-back environment that looks and feels exactly like TV. This combines the best of both worlds, enabling advertisers to deliver relevant, high-impact brand advertising to far more engaged and relevant viewers and achieve the measurement and accountability of digital. To say that marketers are excited is an understatement.

Photo

Thu, 13 Oct 2011 18:52:14 -0700

Dropbox and the issue of defensibility

Tue, 30 Aug 2011 16:17:00 -0700

Dropbox is an awesome service. The product is beautifully simple and does exactly what you’d want - sync files automatically across multiple users and machines. We use it at LiveRail and love it. Reading a recent article in techcrunch, it looks like the company is about to, or just has, closed a massive funding round at a 4-billion dollar valuation.

What concerns me is not that the product or revenue doesn’t deserve this sort of recognition, but that the defensibility of their position is weak at best. From an outsider’s perspective, it seems that any serious attack by the majors would severely impact their existing customer base and cut their growth prospects; and do it almost overnight.

Although operating a secure cloud storage service at scale is clearly non-trivial, I can’t see anything that is beyond what could be developed by Google/Apple/Microsoft and integrated natively into their respective OS’s, providing an even simpler, more powerful user experience, with zero sign-up friction. Sure, any of these companies could choose to buy instead of build, but with Dropbox’s new investors now demanding a multi-Billion dollar price tag, that path would only be attractive if Dropbox’s product/position became literally unassailable.

Instead, I believe cloud storage will prove to be a re-run of IE vs Netscape… The OS-bundled solution need not even be inherently better - at least not on day one - because native availability in the OS eliminates the biggest friction to using the service… signing up! But the big-guy’s advantages over Dropbox run much deeper than just being “pre-installed” on people’s devices. Although the first generation of services like iCloud may lack complex rights-management capabilities for controlling the sharing documents with certain 3rd parties, that feels like a very thin veil of protection for Dropbox. And for consumers, that will probably matter far less than things like having a new song instantly sync’d to both your iPod and Desktop iTunes the moment you click buy, or your photos syncing from your iPhone camera to your desktop iPhoto the moment you snap. Native app integration is a features that Dropbox will struggle to deliver, but will be easy for the likes of Apple/Microsoft/Google who’s deep bench of incredibly popular applications from iTunes to Excel could all benefit from native cloud storage integration.

On top of their OS and native cloud-integratable applications, AAPL/MSFT/GOOG also have long standing, deep and well-run relationships with 3rd party developers. Imagine if Apple made iCloud API’s available to every iOS developer… suddenly every app in the App Store that wanted to access your photos/music/documents would be looking for them via iCloud… not Dropbox.

Combine zero sign-up friction, native app/device integration and 3rd-party developer support via APIs, and its clear that a strong move by AAPL/MSFT/GOOG could crush Dropbox very quickly. They may be a great business today, but their investors clearly have a view of its long term defensibility I’ve missed.

Photo

Wed, 11 May 2011 21:37:12 -0700

Whoever negotiated to get all the Bond movies onto Netflix...

Sun, 24 Apr 2011 17:02:10 -0700

Whoever negotiated to get all the Bond movies onto Netflix deserves a raise.

The Milky way

Sat, 23 Apr 2011 22:00:28 -0700

The Milky way

"Fortes fortuna adiuvat"

Fri, 01 Apr 2011 16:46:43 -0700

“Fortes fortuna adiuvat”

New notepads

Fri, 25 Mar 2011 22:26:36 -0700

New notepads

Not sure I see the funny side of this.

Sat, 19 Mar 2011 14:19:16 -0700

Not sure I see the funny side of this.

Bay Bridge panorama

Sun, 20 Feb 2011 09:57:32 -0800

Bay Bridge panorama

A major milestone for behavioral targeting. Finally,...

Wed, 05 Jan 2011 16:04:31 -0800

A major milestone for behavioral targeting. Finally, they’re serving me Netjets ads.

Photo

Tue, 21 Dec 2010 15:38:10 -0800

"In a free society, we are supposed to know the truth. In a society where truth becomes treason, we..."

Fri, 03 Dec 2010 20:08:29 -0800

“In a free society, we are supposed to know the truth. In a society where truth becomes treason, we are in big trouble.”

- Ron Paul on WikiLeaks

"It suddenly struck me that that tiny pea, pretty and blue, was the Earth. I put up my thumb and shut..."

Sun, 28 Nov 2010 10:52:57 -0800

“It suddenly struck me that that tiny pea, pretty and blue, was the Earth. I put up my thumb and shut one eye, and my thumb blotted out the planet Earth. I didn’t feel like a giant. I felt very, very small.”

- Neil Armstrong

Looks like a good place!

Tue, 23 Nov 2010 09:40:57 -0800

Looks like a good place!

Tiny apples! Cute.

Sun, 24 Oct 2010 10:42:38 -0700

Tiny apples! Cute.

"A corporation is a living organism; it has to continue to shed its skin. Methods have to change...."

Sat, 16 Oct 2010 01:28:13 -0700

“A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”

- Andy Grove

"The higher our position the more modestly we should behave."

Mon, 11 Oct 2010 12:23:50 -0700

“The higher our position the more modestly we should behave.”

- Cicero