Social Video: the Next Wave in Digital Advertising, October 2012

October 2012

Social Video: The Next Wave in Digital Advertising

Paul Verna [email protected] Contributors: Mitchel Winkels, Lauren McKay

Executive Summary: The power of social video represents an evolution in digital advertising. Marketers are starting to move past the interruptive model of the 15- or 30-second pre-roll ad and toward a broader strategy that includes longer opt-in videos with built-in sharing capabilities. This branded content is designed to be consumed and shared on the social web, driving earned media and raising the potential for viral success.

140121 In some cases, social sharing has resulted in ad campaigns Social Video Ad Views Worldwide, Q1 2011-Q1 2012 millions vastly exceeding their original audience targets. Furthermore, 1,326.9 social video campaigns can deliver a richer set of metrics than traditional web ads. In addition to collecting performance indicators such as total views and clicks to web sites, agencies and technology providers typically harness qualitative feedback that brands use to measure consumer sentiment. This 773.4 747.0 combination of hard and soft metrics helps marketers determine 598.6 596.8 the return on investment of their social video campaigns.

Key Questions

Q1 Q2 Q3 Q4 Q1 ■■ How is social video changing the nature of digital advertising?

2011 2012 ■■ How are marketers using social video to amplify their Note: data is based on social video ads served over the Visible Measures messages and how are consumer-sharing behaviors network to English-speaking audiences; all views are user-initiated where a person needs to press the play button to watch an ad informing marketers’ decisions about where, when and how Source: Visible Measures, "Q1 2012 Social Video Advertising Report," to seed branded video content? April 30, 2012 140121 www.eMarketer.com ■■ What metrics are marketers using to gauge the success of social video campaigns?

From Pre-Rolls to Branded Content 2 Tapping into Sharing Behavior 3 Metrics and ROI 5 Conclusions 6 eMarketer Interviews 6 Related Links 7

Copyright ©2012 eMarketer, Inc. All rights reserved. From Pre-Rolls to Branded Content A recent campaign by Giant Media illustrated the use of longer clips and the integration between traditional TV spots The widespread sharing of video clips on social and social video. The company helped Honda and its agency, RPA, with the social video component of a 2012 Super Bowl venues has ushered in a new mindset about online campaign for the CR-V featuring film star Matthew Broderick video advertising. Marketers who used to focus their in a spoof of his role in 1986’s “Ferris Bueller’s Day Off.” campaigns on 15- or 30-second pre-roll ads are now The campaign launched with a 10-second teaser that showed complementing that strategy with freestanding clips Broderick in a scene reminiscent of the film but did not reveal designed to be shared via social channels. any other information, including the product being advertised. Capitalizing on the intense interest around the teaser, Giant David Segura, CEO of social video company Giant Media, said, secured placements in more than 80 influential blogs, including “The difference between this and the previous online video AutoBlog, BuzzFeed, MediaBistro’s AgencySpy and The Wall Street model, which revolved around pre-roll, is you move from looking Journal’s Driver’s Seat. The clip was followed by the 30-second spot at the media to focusing on consumer behavior. The concept is that ran on TV during the Super Bowl and a 2:25 version for online to blur the lines between advertising and entertainment, so every distribution. In total, the campaign garnered more than 79 million form of advertising becomes an advertorial that accomplishes earned media impressions, according to Giant. the brand’s goal but at the same time has a realistic chance of exciting the consumer to share content.” Most social video campaigns use YouTube, Facebook and other sharing destinations as anchor points, and provide Another key difference is that pre-rolls are inherently interruptive, sharing buttons for users to disseminate clips through other but social clips are user-initiated. means, including Twitter, Google+, Pinterest, email contact lists “The social video ad market is the concept of brands and embed codes. producing content with the express purpose of getting it Some companies are also experimenting with a movement seen and shared by people who actually want to watch it, as known as native advertising, which involves seeding branded opposed to producing ads where the goal is to just interrupt content in the content stream of web sites as opposed to people and push the message on them,” said Dan Greenberg, in a corner or in a banner position. These ads are inherently CEO of video advertising platform Sharethrough. social in that they are designed to be shared, but they usually Mitchell Reichgut, CEO of social video platform provider Jun originate on publisher sites such as Forbes.com as opposed to Group, said it even more succinctly: “Social video is 100% opt-in.” on YouTube or Facebook. Another important difference between traditional ads and “With native media you’re buying media the same way you’d social video is length. Pre-roll ads, which play essentially buy a display ad on Yahoo.com, it just happens that the ad is against the user’s wish, are by necessity short—typically 30 bigger and in the actual content well,” said Sharethrough’s seconds or less. A social video can be any length. Greenberg, who is a pioneer of this practice. Greenberg added that native ads are “still trackable and targetable by the same Indeed, an August 2012 Jun Group survey showed that 70% of metrics and technology systems you’d use for display ads.” the opt-in online video ad views of Fortune 500 brands were at least 1 minute long. What Is Social Video?

US Opt-In Online Video Ad Views of Fortune 500 Brands, eMarketer defines social video as video advertising or by Length, Aug 2012 content designed to be easily shared on social media % of total venues such as Facebook, Twitter and Google+, as well

30-60 seconds as through email lists and embed codes. Unlike pre-rolls, 0-15 seconds 7% social video ads are typically non-interruptive and often 6% longer than 15 or 30 seconds. Some marketers see social 16-30 seconds 16% video as a blurring of the line between advertising and 2+ minutes 37% branded entertainment.

60-120 seconds 33%

Note: numbers may not add up to 100% due to rounding Source: Jun Group, "The State of Opt-In Video & Consumer Engagement," Sep 27, 2012 145878 www.eMarketer.com 145878

Social Video: The Next Wave in Digital Advertising Copyright ©2012 eMarketer, Inc. All rights reserved. 2 Tapping into Sharing Behavior Because of its dominance in the video space, YouTube remains the leading venue for social video campaigns. The The widespread use of social media on PCs, site attracted more than 150 million unique viewers in the US in August 2012, according to comScore. By comparison, smartphones and tablets is raising new possibilities Facebook, the second-most-popular US social video for marketers and content owners to enhance their destination, had nearly 48 million unique video viewers videos with sharing features. These one-click buttons that month. can potentially turn any clip into a viral powerhouse. Top 10 Online Video Properties Among US Internet Many ad campaigns have already benefited from the Users, Ranked by Unique Viewers, Aug 2012 multiplying effects of the social web, and more success Unique viewers Videos* Average time (millions) (millions) per viewer stories are likely to follow as marketers, agencies and (minutes) platform providers fine-tune their tactics. 1. Google sites 150.2 13,772.3 443.4 2. Yahoo! sites 55.0 529.0 58.6 In a July 2012 MediaBrix survey of 2,236 US internet users, 8% 3. Microsoft sites 53.7 522.4 40.6 of Facebook users said they had shared a video advertisement 4. VEVO 49.3 595.2 41.4 for a brand on Facebook and 16% of Facebook app users said 5. Facebook 47.7 261.2 16.1 6. AOL 45.7 725.2 62.8 they had shared a video ad for a brand shown inside an app or 7. Viacom Digital 38.7 405.3 50.3 game on Facebook. 8. NDN 37.5 396.0 73.2 A Visible measures report showed that user-initiated, English- 9. Grab Media, Inc. 29.9 231.6 40.6 10. Amazon sites 27.9 103.9 16.0 language social video ad views served on its network reached Total 188.0 37,689.5 1,335.4 1.33 billion in Q1 2012, a 77.6% increase over the previous Note: home and work locations; content videos only; for long-form content quarter’s total of 747 million. (e.g., TV episodes with ads in the middle) each segment is counted as a distinct video stream; video views are inclusive of both user-initiated and auto-played videos that are viewed for longer than 3 seconds; *a video is deﬁned as any streamed segment of audiovisual content (both progressive Social Video Ad Views Worldwide, Q1 2011-Q1 2012 downloads and live streams) millions Source: comScore Video Metrix as cited in press release, Sep 19, 2012 1,326.9 146416 www.eMarketer.com 146416 Choosing a venue for a social video campaign depends as much on raw audience numbers as on target demographics, the ability of the site to deliver metrics and the extent to 773.4 747.0 which a brand has an established presence there. By these 598.6 596.8 calculations, YouTube tends to win out as the launching pad for social video campaigns. “You Tube is probably 80% of the goals of our clients when they have a video they want to drive traffic to,” said Jun Q1 Q2 Q3 Q4 Q1 Group’s Reichgut. He added that when a YouTube player is 2011 2012 embedded in a third-party site, as often occurs, that still is Note: data is based on social video ads served over the Visible Measures counted as a view “on” YouTube. (YouTube analytics allow network to English-speaking audiences; all views are user-initiated where a person needs to press the play button to watch an ad video creators to track and measure views of YouTube videos Source: Visible Measures, "Q1 2012 Social Video Advertising Report," both on and off the site.) April 30, 2012 140121 www.eMarketer.com The e-tailing group found that 66% of US internet users watched 140121 product videos on YouTube in November 2011, compared with 57% The company attributed part of the sequential increase to a on Facebook and 24% on Twitter. A substantial 38% of respondents plethora of social video campaigns around the Super Bowl used other social networks such as Google+ and Myspace. but also noted significant growth over the same quarter in 2011. Top-performing campaigns in Q1 2012 included Invisible Children’s “Kony 2012,” M&M’s “Just My Shell,” Volkswagen’s “The Dog Strikes Back,” Rovio’s “Angry Birds Space” and Honda’s Bueller-themed campaign. According to Visible Measures, the Q1 2012 trend indicated organic growth across the social video industry.

that many top brands are succeeding in steering customers Frequency with Which US Internet Users Watch Product Videos on Social Networks, by Site, Nov 2011 to their Facebook pages once those customers have been % of total engaged through a social clip.

YouTube 47% 19% 34% Actions US Internet Users Take After Watching Opt-In Online Video Ads of Fortune 500 Brands, Aug 2012 Facebook % of total 39% 18% 43% Visit brand's Twitter Twitter 1% Email 1% 17% 7% 76%

Other (Google+, Myspace, etc.) Visit brand's 26% 12% 62% YouTube page Visit brand's 17% Facebook page All of the time/often/sometimes Once in a while Never 31% Source: the e-tailing group, "Delivering Superior Shopping Experiences Via Replay video Video: Consumer Insights and Retail Execution" sponsored by Invodo, 21% March 27, 2012 138658 www.eMarketer.com Click to site 138658 28% When marketers choose Facebook as the centerpiece for their social video campaigns—as Intel, Toshiba and Nestlé’s Hot Note: numbers may not add up to 100% due to rounding Source: Jun Group, "The State of Opt-In Video & Consumer Engagement," Pockets brand recently did—they tend to rely on YouTube to Sep 27, 2012 manage and measure views. P&G’s Old Spice, though, recently 145875 www.eMarketer.com 145875 shifted from YouTube to Vimeo, citing Vimeo’s ability to support Demographics play a role in marketers’ decisions about the user-generated content requirements of the brand’s where and how to manage social video campaigns. Marketers latest campaign. targeting millennials, for example, are tapping into that group’s Wherever marketers decide to start their campaigns, the propensity for sharing video content. A Pew study found majority of sharing activity takes place on Facebook—a natural that 44% of US internet users ages 18 to 29 shared videos on consequence of the site’s estimated base of 1 billion worldwide sharing sites in August 2012, compared with 21% of 30- to users as of October 2012. Nearly three-quarters of Sharethrough’s 49-year-olds and smaller percentages of older users. native ad shares occurred through Facebook in mid-2012, according to company data. Other venues, including Twitter, email US Internet Users Who Repost and Share Photos or and URL shares, accounted for less than 10% each. Videos on Photo-/Video-Sharing Sites, by Age, Aug 2012 % of respondents in each group Methods Used to Share Online Video Ads Viewed on the Sharethrough Platform in the US, 18-29 July 18-Sep 17, 2012 52% % of total 44% Google+ LinkedIn 30-49 1.5% 2.7% 38% URL Pinterest 21% shares 1.0% Tweets 6.8% 50-64 7.4% 26% Email 18% 8.5% 65+ Facebook 17% 72.2% 11%

Repost and share photos Repost and share videos

Note: numbers may not add up to 100% due to rounding Note: n=799 Source: Sharethrough, Oct 11, 2012 Source: Pew Internet & American Life Project, "Photos and Videos as Social Currency Online," Sep 13, 2012 146460 www.eMarketer.com 146460 145398 www.eMarketer.com 145398 Jun Group found that 31% of US internet users it surveyed The correlation between youth and sharing activity played into visited a brand’s Facebook page after watching an opt-in a recent decision by Intel and Toshiba to sponsor an interactive video, compared with 28% going directly to the company’s site social film project titled “The Beauty Inside.” The companies and 17% navigating to its YouTube channel. This data indicates knew that their target demographic of 18- to 34-year-olds was

Social Video: The Next Wave in Digital Advertising Copyright ©2012 eMarketer, Inc. All rights reserved. 4 Tapping into Sharing Behavior more likely to respond to shareable branded content than to Metrics and ROI traditional advertising. Accordingly, Intel and Toshiba created a video series that allowed users to audition for the program by Marketers that seed branded content through social submitting content through sharing venues. channels expect a rich set of metrics that often “That younger demo is trickier to hit these days, especially all in exceeds what they might get from site publishers for the same boat,” said Tom Hume, Toshiba’s director of marketing communications. “There’s so much video snacking, but they a traditional campaign. These include key indicators don’t spend a lot of time with traditional advertising. So we were such as video views, a breakdown of venues where looking for a way to break through with that audience, and the the clip ran, clicks to websites, visits to Facebook, only way was to have interesting content that folks would want to store locator usage and coupon downloads. seek out, watch and share with friends.” Marketers also try to gauge consumer sentiment by monitoring Some marketers are using social video apps to reach youth real-time feedback on social channels. This combination of hard audiences. BBH used Viddy to target young fans of pop stars and soft metrics is the foundation for marketers’ assessment of Lady Gaga and Justin Bieber for separate campaigns. social video campaigns’ return on investment. “We found Viddy to be very valuable,” said BBH strategy director John Watts, senior manager of digital marketing at American Colleen Leddy. “It definitely contributes to the sharing of a piece Honda Motor Co. Inc., said, “Typically, we measure aggregate of content. With Lady Gaga, we invited her fans to join in and video views as well as impressions and earned media asked them for content, and a week later we had the video shots value from mentions by influencers. In addition, we track they submitted. Then we put it into the spot and it launched in the the sentiment of that coverage and associated online ‘Saturday Night Live’ episode that she hosted. It was very relevant comments and the engagement rate. Qualitatively, we also to her community, and it did really well.” track against common themes mentioned in comments and Sharing not only increases the potential audience, it can also coverage to determine whether they are consistent with our lend a campaign an extra measure of authenticity. Jennifer communications goals.” Long, brand director of Patrón Spirits, said, “If people come Social video firms are delivering these metrics, but they say their into a brand from, say, a friend, or they read about it from efforts are sometimes hampered by confusion over definitions press versus just seeing it in an ad, that seems to be more and unrealistic expectations on the part of their clients. impactful for consumers. It’s a form of endorsed media versus traditional push media.” “There’s a problem in the social video world when one guy thinks a view means a pop-up, somebody else thinks a view means a user clicking the video, and somebody else thinks it means a pre-roll ad,” said Sharethrough’s Greenberg. “The word ‘view’ ends up getting bastardized.” Some firms have found ways to game the system by generating automated YouTube views. “There are players in this market that are doing unseemly things like buying cheap traffic and having it bounce around in circles until it gets to a video,” said Greenberg. “That’s not a market that’s going to scale forever.” Further, the viral success of some campaigns has created an environment where marketers equate social with viral and expect every campaign to yield earned media views many multiples larger than the corresponding paid media placements. “Some clients are benchmarking this whole industry to being viral,” said Giant Media’s Segura. “They want to pay for half a million views but receive 50 million. It goes without saying that that’s what we want, too, but our proposition is more driven by statistics. Historically, for every two paid video views you get from Giant Media, you get one that’s earned.”

Social video represents an evolution in digital video Toshiba and Intel Target Laptop Buyers with Social Film on Facebook advertising. Whereas brands were once focused on pre-roll ads, they are now taking a broader view of the advertising Billie Goldman landscape. This includes tapping the viral potential of social Campaign Marketing Manager venues to drive earned media, often in conjunction with a paid Intel media campaign. Social sharing has become an essential feature of Tom Hume online and mobile video. When users watch video clips, Director of Marketing Communications they expect to see prominent buttons that allow them to share the material with Facebook friends, Twitter followers, Toshiba Interview conducted on September 17, 2012 email contacts and other members of their networks. There is no friction involved in this process. A single click of a button on Hot Pockets’ Viral Videos Connect with the a web interface, smartphone or tablet can instantly expand an Millennial Male audience by hundreds or thousands of viewers. Kevin Holmes Marketers analyze sharing behavior to determine the Marketing Manager, Hot Pockets best strategies for their social video efforts. YouTube and Facebook are the most popular launching pads for video Nestlé Interview conducted on September 27, 2012 campaigns, but some marketers use other venues depending on factors such as demographics. Regardless of where a social video Honda Hints Its Way to Viral Video Success campaign originates, users share media across a broad spectrum of sites, including Facebook, Twitter, Google+ and email lists. Once John Watts a clip proliferates through the social web, it takes on a life of its Senior Manager of Digital Marketing own and can deliver more visibility than the advertiser paid for. American Honda Motor Co. Marketers use a combination of hard and soft metrics Interview conducted on September 26, 2012 to measure the return on investment of social video campaigns. These include key indicators such as total views Dan Greenberg and clicks to social media sites as well as user comments CEO and other qualitative feedback. Many of these metrics are Sharethrough not standardized, leading to complications in using them to Interview conducted on October 8, 2012 measure ROI.

Colleen Leddy Strategy Director BBH New York Interview conducted on September 26, 2012

Jennifer Long Brand Director Patrón Spirits Interview conducted on August 16, 2012

Mike Norton Director of Communications Old Spice Interview conducted on September 20, 2012

Mitchell Reichgut CEO Jun Group Interview conducted on September 21, 2012

David Segura CEO Giant Media Interview conducted on August 8, 2012