As the online video market matures, like any technology, it becomes more segmented. Online video platforms (OVPs) are like a full set of tools. Whereas as recently as five years ago, the question businesses were asking themselves was whether to use on-line video, now the question is about choosing the right combination of tools to achieve the desired business objective.
The best-known OVPs are those that command huge audiences, first and foremost being YouTube, of course with over a billion visitors a month. Platforms like YouTube have opened the floodgates to creative talent that used to be tightly controlled by tv or newspaper and magazine commissioning editors. They also bring audience sizes bigger than anything previously conceived of in publishing or broadcasting. But, as Mark Suster at Upfront Capital warns us all, these are challenging businesses to succeed in, not just because so much of the income has to be shared with the platform, but because they require a daunting combination of top creative, technical and commercial skills (Both Sides Of The Table).
Most businesses are using video to market something, not producing creative content to captivate large audiences. For most of us, platforms like YouTube are incredibly cost-effective lead generation channels. Suster observes, “YouTube is a distribution and marketing channel like any other.” Except that it delivers vaster audiences, more cost-effectively than any in history, and for some content, it even shares revenue while it does it. However, YouTube is optimised to make money for YouTube. As Suster concludes, “YouTube is simply the top end of your profit funnel.”
YouTube Sits At The Top Of The Funnel
Many of us have read with interest the story that the fashion eCommerce business Bottica posted about their Christmas campaign. They published a brand-building video on YouTube combined with targeted remarketing to those who watched the video but didn’t click through to their site. The original click-through was pretty standard for YouTube, about 0.7% of viewers clicked through to the Bottica site. But combined with the remarketing, the click-through rate was above 10%. For less than $5,000 direct marketing cost, Bottica attracted almost half a million views, and the campaign was undoubtedly profitable and a success on its own terms. This is YouTube doing its job as a phenomenal lead generation tool. So far so good.
But this is not the whole business story, what about further down “the profit funnel”? Because, as Bottica themselves observe, the conversion rate to sales was lower on this campaign than they normally get from their website. In fact, less than 1% of those who viewed the video went on to purchase. This could be in part because the video itself was a beautiful, high-level branding video; visitors were not moved on to more specific sales or product content. And it is also probably because even on the website, the video is hosted on YouTube, so the audience is always being drawn back into the YouTube world optimised to make money for YouTube. If you come to the webpage or video via Google search, you are back on the YouTube video with 0.7% click-through.
Brilliant lead generation is just a cost until and unless it leads to the acquisition of customers.
The Right Tool For The Right Job
The video platform tools needed to convert and retain leads, or to sell and deliver products and services are as different as is a hammer from a chisel. Businesses with specialised and tightly targeted audiences, of which the world of video publishing and online tv is full, need tools to market tightly to a known audience.
MoneyWeek, the UK’s best selling financial publication, are a good example of a company that recognised that “a lot of YouTube views go to waste. After watching our videos a huge chunk of people head off into the rest of YouTube. As our viewing figures mounted we weren’t seeing a difference in our bottom line.”
They want to draw interested parties to their website, keep them there, share valuable informational or educational content with them securely and convert as many as possible to paying customers who they retain. MoneyWeek’s Andrew Williams explains, “We still post a lot of our videos to YouTube. But we annotate those videos, advertising one exclusive video on MoneyWeek each week. Because we have secure video hosting at vzaar, we ensure that the videos we embed on our site cannot be made available anywhere else.”
The “narrow neck” of the marketing funnel needs video platforms that are integral parts of the the business’s website, over which they have much more control over branding and playback, and greater security over their proprietary content.