The Brave New World Wide Web

Hopping on the Internet Video Bandwagon

EVEN as this happens, we are also beginning to see a proliferation of video content on the Internet—and everyone seems to want to jump into this “internet video bandwagon.” Sites where users can find all sorts of video offerings—which they can use when and where they want—are sprouting like Wild West mushrooms in a moist oak log. Following the rapid and immense success of YouTube following its launch a little more than two years ago, obliquely highlighted by the fact that an American company with a similar domain name has been frequently overloaded and shut down by the extremely high numbers of visitors unsure about the spelling of You Tube's url, the numbers of similar sites are quickly growing.

Topping the list is Hulu.com, which wryly admits on its brand new site that its goal of helping users find and enjoy the world's premier content is both an ambitious and never-ending goal.

A joint venture controlled by NBC Universal and News Corp.'s Fox TV business, Hulu.com has recently started “broadcasting” popular TV series like "The Office," "Prison Break" and "24" to online viewers in the United States.

Then, from the innovative Swedish creators of Skype, comes Joost. If Skype allows users to make phone calls from their computers to other Skype users free of charge, or to landlines and cell phones for a fee, Joost empowers Web users with the capability to distribute TV shows and other forms of video over the Web using peer-to-peer TV technology.

Joost was sired by all of 150 software developers from six different cities around the world, and so far this has been worth it: latest figures show that more than a million beta testers have signed up, and the site is on track for an end-of-year launch (2007).

Spicing up the scene is Babelgum.com, an interactive software for distributing TV shows and other video forms over the net. Again using P2P TV technology, mainstream TV content is provided—for free—to end users, supported by advertising.

Aside from mainstream content, Babelgum also offers niche programming, including independent and short films. A main difference from YouTube's homey, user-generated material, Babelgum only airs professionally produced content.

And, everything is for free: Users can pick and choose from the available content to create their own customized channels. Content owners can upload their videos, at no cost, through the Babelgum Video Publisher that provides for the simultaneous upload of entire content libraries.

Like Joost, Babelgum is currently in open beta-testing phase, and beta software is available to download for free from the Babelgum website.

Putting order  to this growing crowd of video sites just eager to jump on the bandwagon is Blinkx.com. With this Internet video and audio search engine, you can search and classify audio files, video clips and streaming media. What makes Blinkx so special is that it uses speech recognition to listen to the audio component of video content, then uses both the phonetic and text transcripts to match content with search queries. Blinkx also indexes and searches pod casts and video blogs. To date, Blinkx boasts of being the largest deep indexed Video search engine with 18 million hours indexed and agreements with over 130 content companies.

Internet users are eager to tune in: According to the Nielsen Online—the undisputed leader in audience information—a growing number of viewers the world over use Internet video sites, and do so for longer chunks of time. A Nielsen survey says that in September, almost 70 percent of Britons used an Internet video site, and the length of time they spent on such sites rose almost twice.

There is no disputing these figures: When TV viewers or entertainment professionals in the US mention "ratings" they are often referring to Nielsen Ratings, offered in over 40 countries to determine the audience size and composition of TV programming.

Marketing with Online Paradoxes

As users demand more control, Internet TV becomes more passive.

Parks Associates is a firm that has, for over 20 years, studied the use of digital technology for industry and consumers, and it has this to say about the Internet:

The net is paradoxically getting both more and less interactive. At one end of the spectrum lies social networking that is highly interactive and user-generated. At the other end, is an explosion of video content that users  simply click, download and watch. This end represents familiar terrain for traditional advertisers, since it is passive enough to be more like radio and TV ads.

Keen to take advantage of this “passive” part of the Internet, Joost, Blinkx, Babelgum and the other Internet video sites are starting to incorporate TV-like offerings from a variety of sources.

YouTube—whose popularity was built largely by the fact that it broadcast home movie clips—has now begun to add video material from established TV providers. And, this goes on even as it tries to fend off copyright infringement suits.

Gone too are the wild days of the early Web 2.0, when video was limited to short user-generated clips. Much of the new video offerings on the Internet today is becoming more passive, much like real TV. For businesses set on marketing their brands online, this means that commercials – the good, old fashioned television way – are in again, but this time in a new setting.

Social Networking Joins the Bandwagon

Even social networking sites are not immune to the mad scramble. These sites—which have some of the largest and fastest-growing audiences on the Internet—are up to grab a slice of the advertising pie.

For the longest time, banner ads were the tradition in these sites, with Google ads found on Orkut communities, Microsoft Ad Center being the exclusive provider for Facebook.com, and of course ads brought by the famous partnership between giants Google and MySpace.com

But now ads on these sites are moving closer to the video kind. Only last week, Multiply.com signed an ad partnership with the Filipino television heavyweight, ABS-CBN, following the rapid rise of that networking site among Filipinos.

Bebo, popular in Britain among teenagers and young adults,  recently introduced a service that lets content partners show their videos—and ads—to Bebo users.

More Ads = Increased Revenues?

With many media offerings on the Web, however, can marketers be sure that rapidly increasing viewership translates to more revenues? There's the rub.

Charging Internet users for using Web videos may be close to impossible, after all, as they have long become accustomed to getting their online media for free. So far, experts agree that the business model dominating the web video scene is still: advertising.

For many advertisers, however, especially manufacturers of consumer goods who take up the largest slice of TV advertising, the Internet remains something to be wary about. Much of this is brought by the fear that some web fare may be too radical, too edgy—and thus will undermine their brands.

A leading market research firm, eMarketer reports that while Procter & Gamble spends more than any other company worldwide on advertising, only about 1 percent of its ad budget went to the Internet last year.

A quick look at any site—be it your own blog or your Facebook, or your industry association site, or your company's—will show that most mainstream brands shy away from online banner ads, although many marketers have spent heavily on ads linked to Google.

Could TV-style video then be the answer? Would this win over the mainstream brands and cause them to embrace Internet advertising?

Emarketer, who does market research on e-marketing and online businesses, also estimates that within the next three years, online video ads in the US will generate almost $5 billion—or almost 10 percent of overall internet ad revenue. This is almost four times more than the percentage marked last year.  The fearless forecast: Internet video ads will rise rapidly, not only in the US, but in similar places with high internet penetration such as other countries of North America, Europe and Australia.

Even developing countries with a low Internet penetration – like India and the Philippines – will see that rapid rise of demand, use and creation of internet video in the next three years.

The Outlook is Rosy

Like the wild, wild West at the turn of the 20th century, the Internet today is vastly unexplored territory for marketers—offering a similar promise of wild growth.

Apart from the opportunities presented by passive, TV-like content, the internet allows advertising formats to be mixed and matched in ways that can't be done in traditional arenas.

Thus, spunky companies can position TV-style 15- or 30-second ads spliced before, during or after popular video programs on Joost, YouTube and other such sites. Such ads can also appear in the middle of an article on the online version of, say, the Wall Street Journal, Forbes, the New York Times or popular local dailies or magazines. Or, for more specific targeting, such ads can be placed in industry association sites.

For now, YouTube and other online video providers are using what is known as “fixed advertising overlays." These are ads that appear from time to time on part of your video screen, thus allowing users to click through to a marketer's site or a video ad.

Such less conventional forms of Internet marketing hold the promise of being more effective than traditional ones, drawing their appeal from being more interactive, and allowing site visitors more control over their use and display.

Some of the TV ads with the most recall after all—such as Nike's Yi Jianlian Chinese Basketball ad, Apples McKintosh, American Idol Ford Mustang Car, Citibank Identity Theft Solutions, Coca Cola Black history timeline—were spread online “accidentally” by being posted and reposted on social sharing sites like YouTube.

And just to step up the heat, some video ventures are taking content and ads to where audiences already reside.

Heavy.com is developing an advertising network called Husky, which any online video owner can join. On Husky, advertisers can buy video ads that displayed on the "skin" of videos being watched by users.

In Britain, Bebo has gone into a new venture aimed to tap into that country's social network audience of 40 million users. Called Open Media, partners who use the service are allowed to keep all the ad revenue they generate. Alternately, Bebo will sell and run advertising for companies, and keep part of the proceeds.

Is the Internet video bandwagon getting anywhere? Most likely so. Emerging trends fuse the emotional power of traditional video (TV) ads with the customization offered by the Internet. All in all, this seems to be the first of the bandwagon trains to open up the Brave New World Wide Web as the marketing frontier of the future.