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THINK AGAIN BEFORE DOUBLE FISTING THE VIDEO KOOL-AID


Hey, I have an idea – why don’t we all make the absurd assumption that video is the holy grail of media consumption and ad revenue in 2017 and the foreseeable future?

Hell yeah! We’re all in!

This has been the rather short-sighted thought process of a number of digital media companies over the past few years seeking the holy grail of revenue streams. They’ve gone as far as laying off dozens of traditional writers in shifting their businesses to one defined primarily by video, a risky move as many of these upstarts are trying to survive in a crowded space where just a handful dominate.

Now they’re paying the price.

VIDEO POISONS FOOLISH DIGITAL MEDIA SHOPS

As I’m sure you’ve heard by now, The Wall Street Journal reported talks of Mashable selling for one-fifth the cost of its 2016 valuation, joined by other chatter around names like Uproxx, Defy Media and Buzzfeed.

These companies risked their original business models on an erroneous perception that Millennials and advertisers prefer short video content that is mass-produced.

“What our advertisers value most about Mashable is the same thing that our audience values: Our content,” Mashable CEO Pete Cashmore wrote at the time.

It appeared like the ultimate two-for-one-deal:

“Hey! Let’s stick an ad before every video we produce because is much more appealing for both advertisers and consumers,” said some mythical online publisher in seeking to submarine their platform. “On the one hand, we have our consumers. They love short video content and they’ll be forced to watch the ads to consume our content. On the other hand, we have our advertisers. They’ll love this because they’ll get more reach and a wider audience.”

Turns out the shiny object strategy failed. Trapping consumers into short video content is not exactly what they want – especially not to the level of laying off dozens of writers and shifting your entire business strategy.

INVESTORS GET “SPILLED ON”

Investors have obviously agreed with the above theory or we wouldn’t be here in the first place. Their billions of dollars in investments rely on young audiences to adopt new technology. Traditional media companies, including broadcasters and publishers, are nearly extinct. It’s necessary for them to find their footing online.

Investors are now scrambling as patience wears thin and dollars for future growth dries up. According to CB Insights, financial deals for digital media are on pace to shrink for a second straight year in 2017, which expects the number of transactions to dip to 120. That’s a 32 percent decrease from 178 in 2015.

TAKEAWAYS FOR DIGITAL MARKETERS

There is much to learn for digital marketers. If your creative strategy solely surrounds one medium, like video or static images or rich media, it’s time to start diversifying. In article after article, thought leaders on panels, and rants on social media – more than a few marketers have proclaimed we’re in the all-video-all-the-time age. “VIDEO!!! Let’s invest most of our creative energy and media dollars on video; it’s the winning recipe for better performance!”

FACEBOOK

Facebook is a prime example, primarily because Google segments their traditional ad types – like text and image ads – from dynamic content like video which mostly exists on YouTube.

On Facebook, you can run several ad types within the same campaign making it prime for testing. For example, we were running a Facebook campaign using video exclusively (Yes, technically we were “drinking the Kool-Aid” solely because of budget restrictions.).

The video ads performed exceptionally well on their own, but of course, with no comparison. Then, the following month we ran video and link ads side by side, both of which were executed well. The “more boring less shiny” link ads outperformed the video ads by a long shot. For this particular client, we’ve now removed the video ads for the duration of this month.

BRANDED CONTENT

Publisher-specific advertising usually comes in two forms: editorial sponsorships or branded content. Of these two, branded content is where most of the video dollars are thrown. This is an extremely crowded space where publishers are battling it out with entertainment studios, production studios and individuals that have recently birthed into this market.

So what’s an advertiser to do when receiving pitches?

Working with a video production house can be a more pleasurable experience, and they’re often keen to work directly with the brand instead of partnering with publishers, agencies, etc. Also, many brands are choosing to work with individual influencers where the metrics are far more clear and the message more controlled.

In the end, video is clearly an important aspect of marketing now and moving forward. But don’t put all of your eggs in one basket or invest in a single publisher without taking proposals from smaller production houses or individuals. Remember to diversify, test, measure and make changes that lead to the best performance, even if the better performing ad units are static images, carousels or text, or come from smaller production houses or individual influencers.

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