Social Media Statistics ...

There is an amazing post on Socialnomics on statistics related to social media. Have a peek at the embedded video. The key takeaway being - social media is not a fad, even if we halve the statistics from the post, we are looking at a Juggernaut. Ad serving will undergo a fundamental change in the next 3-4 years with more dollars moving into social media away from search and display. Goog is going to suffer and Y! will most probably cease to exist.

Social media advertising

So, what's so compelling about this picture? Apart from it being an eye candy, it won the first Sugoi Facebook photo contest. Sugoi giveaway was a simple performance wear and its generated 100s of votes and fans on the Sugoi page. Talk about engaged promotions and "word of mouth" marketing.

Social media advertising is not about display ads , it all about engaging the consumers in the brand message.


There was a great article published recently from Josh Bernoff - Forrester analyst on media spend budget. I had made a conjecture around a year ago (when the recession started) that media spend on digital (aka internet) related ads will increase; and Josh fully concurs with this. Here are some interesting nuggets -

• The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets won't grow much
• Social media, which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn't even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.

The key to social media advertising is engagement vs. the traditional "push" or broadcast model. Consumer are now looking to engage with and drive what they want to see in a brand vs. brand pushing its strategy to naive consumers. The world is beginning to change and the interesting thing is that its a global phenomenon.
Consumers , all over the world, are spending oodles of time on the social media vs. traditional portals (bad news for Yahoo). And this phenomenon is seeing the largest y/y increase. As per Nielsen report, the engagement is growing 6 times more as compared to other mediums. Currently, almost 10% of internet time is being spent on social media - and this is a global phenomenon.
So, my prediction is that social media type of "engagement ads" will supplant display ads in the near future and soon "search ad" budgets will decrease as well. That's definitely not good news for Yahoo or Google. But hey, there needs to be a change every decade or so and I can see it happening.

Cable - are its days numbered?

Old timers in (online) video land have a saying - "video is only six months away". How many times have we said that the days of viewing linear TV are over. Old ways of distributing video via broadcast or cable are ending. But its been well over 10 years and these folks are alive and kicking, and might I say, rich!

But, I do feel that the day of cable and broadcast distribution are numbered. It'll not happen in the 6 months or 6 years but their hold over our media lives is slowly but surely diminishing and will soon become minimal when the current generation (born post 2002) gets out of high school. I don't know what the demographic segment has been assigned to this generation (e.g. millennial, Gen Y, etc) but I call them the "YouTube generation". Now, I shouldn't be uttering the word - YouTube, given that I'm from Yahoo! but YouTube is the crowned king of UGC online video.
The current generation - millennial, have been exposed to non-linear viewing (in YouTube) but have not grown up with it. For them its an important part of their media viewing along with TV.

However I see a seminal change coming. My 2 year old son watches cartoons on YouTube! He asks for YouTube by name and not TV. This generation is growing up with the non-linear viewing as its default media habit. Linear TV appears weird to them. For them, the norm is to watch on demand, rich interactive media. They will look back and say - "what weird folks lived 15 years ago, they watched linear media"

Identifying opportunities in video - a model

I've always been curious on how to model video opportunities from a core strategy perspective.

Here is my take. 

We should use the strategic positioning model to 

• identify opportunities by specifying various positioning areas,
•  identify problems faced in each area, 
• define target market for these problems, 
• and set of benefits to solve these problems. 

This enables us to have a crisp definition of the product - which is nothing but a set of benefits for a target customer or a market segment. 

Strategic positioning in the video market can be divided into:

1. Variety based positioning - the video workflow
2. Customer segment based positioning - customer segments
3. Access based positioning - on the modes of accessing videos. 

Specifically, 

We can use  "variety based positioning" to identify opportunities by understanding the video workflow:

1. Ingest of video
2. Encode/transcoding video
3. Creation of a video asset (metadata + content). The video asset can be categorized as UGC, semi-pro, professional.
4. Organizing videos and playlists via CMS
5. Inserting ads. There are different ad formats - in-stream, overlays and ad-rules - ad frequency, post/pre rolls, etc.
6. Content streaming
7. Player - player creation, skinning
8. Content syndication
9. Content aggregation.

For  "customer segment based positioning", we should know:

1. Consumer - end-user consuming content on a publishing site
2. Content providers - consumers, semi-pro, professional 
3. Publishers - video destination sites, aggregation sites, video in context sites.
4. Advertisers - small biz, medium sized businesses, and large.
5. Developers - they create publishing sites

And finally, "access based positioning":

1. Form factor for accessing video - mobile
2. Bandwidth constraints - on mobile or slower connection.

By keeping these three positioning models in mind, we can identify unique market opportunities and define a product offering.

I'd use the following table to articulate the problems that each area faces, example: 

Strategic Positioning Areas	Problems Faced
Ads - inserting, rules	Measuring ad effectiveness
.........

Once key strategic areas and its problems are well identified, we can then articulate market sizing for each area and its value proposition. The product definition must focus on a set of benefits for a target segment. The feature set is a technical articulation of the benefits.

Video syndication and ads - on the content or player?

This question has always intrigued me?  In network TV land syndicating shows generally means - making prime time content available to run on other networks (e.g. syndicating Sienfeld). 

How does this translate to online video world? Content providers make content available to different distribution channels. E.g. CBS audience network syndicates content to YouTube, Yahoo!, MSN, etc. However, they are generally averse to allow sharing or further syndication to others. Why is that? I believe its the fear of losing ad revenue. CBS does ad-rev share deals with YouTubes of the world, they want to ensure that wherever their content is being distributed, the monetization can be attributed back to CBS. 

Here is another data point worth noting - almost 40% of YouTube's stream count are via "embeds" - i.e. shared linked outside of YouTube! In addition, if you pay close attention to ComScore video metrix, you'll note that video stream share is very fragmented - YouTube has the lion share (50%+) but the rest of the share is divided into 100 + players. 

Syndication in the online world is very different from TV network land. There are hundreds of viable distribution channels. Content providers have to take advantage of all distribution channels to reap full potential of thier ad revenue. 

My assertion is that barrier to universal syndication is the inability to attribute ad revenue back to the content provider. And this barrier is limited by our technical ability to associate ad with the video instead of the syndicated player. 

Currently, most video ads are managed by an ad-plugin in the player talking to a video ad server (e.g. Doubleclick or an internal ad server in MSN, Yahoo!, etc). If they could be directly part of the video, the ad revenue could be directly associated with the stream instead of the player. This will incentivize the content providers for universal distribution. 

Video Platform companies - is it a crowded field?

Over the past few years, we have seen a proliferation in video platform companies - these are your traditional platform plays allowing other companies to create derivatives. As video has grown in popularity, every publisher wants to show video, however the expertise around creating a rich video experience is now getting more complex than simply displaying a player and its playlist.



Do we have too many companies addressing the similar needs with minimal differentiation? Is it too crowded?

1. Summary of the key players in the market today -
   
   the Platform. Target segment: white label publishers, premium publisher. Value proposition: ingest video and manage metadata. Tie-up with ad networks and player vendors for an end to end offering. Owned by Comcast. Metrics (month): 65M streams and 10 M UUs.



2. Brightcove. Target segment: white label publisher, premium and mid market (torso) publishers. Value proposition: ability to customize player, great toolset for publisher, open APIs for customization, tie up with ad networks. Private with around $90M funding. Metrics(month) : 31M streams per month, 10M UUs. Customers: Showtime, WSJ, and AOL.



3. Move network. Target segment: white label publishers, premium and mid-market publishers. Value proposition: high end streaming needs - HD. Customers: ABC, Discovery, Fox, CW.



4. YouTube. Target segment: tail publishers. Value proposition: get your video on YouTube. Value proposition: access YouTube audience.



5. Ooyala. Very similar to Brightcove.
   

And there are new players in the market - Kaltura, Fliqz, Marcellus. As you'll note, there is not much of a differentiation between the players. Few of them are beginning to differentiate on price vs. value - a dangerous strategy leading to price wars.

What would be ideal is that they bring out a value proposition for their target customer semgent and focus on it. Too many of them are simply creating "me-too" products. I predict an industry shake-down in the next year or so, the five players listed above should make it out all right, the rest will face a very tough climate.

Internet TV will it be a true competitor to Cable

Video over Internet is getting popular as seen by the time the younger demo are spending on YouTube's of the world. The time and unique users watching video on PC is ever increasing. We are even seeing an increase with mobile video viewing. However the form factors provided by TV and mobile have limitations, in the end the consumer would like some of this content to become available on TV. 

I want to see my Hulu videos, YouTube favorites, and Netflix content on TV. Now, Roku is doing a good job with getting Netflix content on TV. However, the way to get the rest is via your PC. This may be an easy task for us media types but for the common consumer its a exercise in futility. We need a device to manage video over the internet and our other media scenarios such as DVDs, cable, etc. 

One tenet that we must imbibe is that clutter in the living room is a non-starter. i.e. we need to reduce the number of devices not increase it. Women rule the living room design and they hate clutter. Well, we know what guys will do.  To make this happen,  I see a great opportunity in co-tailing on the Blu-ray players.  Consumer have to purchase the percieved winner in the HD DVD world, its price point is coming down (below $200 is the tipping point for mass consumer adoption). If folks like Hulu, Netflix, YouTube tie in with Blu-ray device manufacturers, they have a perfect entry into the consumer's living room. 

Of course, the other entry is via the gaming devices such as Xbox, Wii, and Playstation. Microsoft has already put its IPTV player in XBox, so we know where they are heading. 

The other option is to have the Cable guys do it but given my work with Cable guys, I dont think they have the aptitude or will to make such a device.