Advertising agencies may just be missing out on one of the few growth sectors in the advertising economy … online video advertising for small and medium businesses. Increasingly, I hear business owners say, “I don’t want a marketing strategy, I don’t need a branding review, and I definitely don’t want to spend $50,000 on a 30-second TV ad! Just give me an effective video that I can use online to explain what I do and the value I offer!” They don’t want a television commercial or an infomercial; I believe they want a searchmercial. The following is some background data on why I (and the team at PixelFish where this thinking originated) think this market represents a compelling marketing opportunity, some insights on why different thinking and executions are needed to succeed in servicing this market, and what a searchmercial is.
Barriers to Video Advertising
Traditional television advertising is not for all businesses; as a matter of fact, video advertising is a medium selected by less than 0.1% of the 25 million U.S. businesses. Why is this, when studies indicate that people remember only 20% of what they hear, 30% of what they see, but 70% of what they both see and hear? Shouldn’t video be the major component in the marketing mix for converting shoppers to buyers?
For the vast majority of small and medium businesses (SMBs), television advertising carries too much risk due to the high costs of production and media, the lack of ability to target behaviorally and demographically, and its lack of accountability. SMBs are less interested in the long-term benefit of brand awareness and more interested in reaching the “shopper” with their value proposition. The old adage that “50% of my advertising works; I just don’t know which 50%,” is especially true with television advertising and represents an unacceptable risk to SMBs with limited marketing budgets and the need for short-term results.
The Barriers Tumble Down
The Internet now provides a video platform that not only has critical reach but is accountable, economical and reaches a high density of active shoppers. More than 65% of U.S. households now have a broadband connection and 68% of Internet users now watch online video advertising at least monthly. Combine this with the fact that 52% of online video ad viewers take action and 16% saying they purchased2, and you have the arrival of a compelling video advertising platform.
The rate at which SMBs are embracing the broadband video advertising opportunity is astounding. Borrell Associates – a leading media research, consulting and project firm specializing in local Internet advertising – predicts that online video advertising will increase from 7% ($371 million) of local online ad spending to 35% ($5 billion) by 2012. This phenomenal increase understates the importance broadband video will play in the marketing mix of SMBs, as these businesses will also benefit from free exposure (such as placement on their own Web sites or views generated in search results).
Internet Yellow Pages and search engines are gearing up to ensure that their listings incorporate premium exposure for video and are in the process of rolling out packages that make it affordable and expedient for a business to create their own video advertisement. The continued reduction in video production costs, spurred by advances in technology and the emergence of national video ad producers, has put video advertising within reach of SMBs. While tools are now available for businesses to create their own video ads, at PixelFish we found more than 75% of SMBs opt for a professionally-produced custom video ad and – unlike traditional advertising agencies which typically charge six-figure sums for such an ad – these custom ads are now typically being created for $750 to $3,000!
What is a Video Searchmercial?
We think a new term is needed to describe this rapidly emerging form of video promotion that is largely used online and displayed in directories or search results. We call it a video “searchmercial;” that is, a video commercial designed specifically for online search and directories. Unlike online video display ads or in-stream video ads that are designed to demand attention and create a brand preference, the purpose of the searchmercial is to appeal to the active shopper by providing the information sought. There is no need to cut through the clutter or generate effective reach; you simply need to tell your story and communicate value. In fact, where traditional advertising is designed to stand out from the content the audience is viewing, the searchmercial is the content.
Typically, searchmercials run between 30 to 90 seconds and can be placed on the advertiser’s Web site, on an online directory or an Internet search engine. They can be created cost effectively because they simply need to efficiently tell the story of the business. No need for the “big idea” or expensive talent.
