Video Killed the Video Star

Tenacity5 will release the second edition of its email newsletter, the Monthly Marketing Mashup this week. Here is the November edition, “Video Killed the Video Star.”

Everyone is talking about how important video is to online content and marketing. They’re also saying TV advertising is dying. But why do they say that? What does that mean?

This month we dig deep into the video market to give you a complete briefing on the Internet video trend.

TV Is Not Dying

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Many say TV ratings — and consequently advertising — are dying. Don’t believe it for a minute. The Internet is not killing video or TV. Video simply is moving from one distribution mechanism to another, from broadcast and cable to Internet downloads. And ad spends are following the eyeballs.

People love video content. Period! Younger people are just finding new ways to watch it. For example, The Walking Dead is the regular weekly best seller on iTunes. Call it cord cutting or just online video, Internet distributed programs are the immediate future. The distribution of video has caused both CBS and HBO to develop their own programs.

How Big Is Digital Video?

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By the end of 2014, 190 million people in the United States will have watched digital video across their various media devices. More than 100 million of those people watched a movie, which is certainly longer than the standard 30-second to two-minute YouTube schtick. We know Netflix made digital streaming a household experience. The brand remains at the top of its category.

Is Online Ad Growth Really Video Ad Growth?

Forrester declared that online ad spending would surpass TV in the next two years. One has to ask: Is that really true?

We think Forrester is thinking in pipes. In one pipe you have cable and broadcast television advertisements, and jn the other — the Internet — you have online ads. So Internet video ads are simply replacing the old traditional broadcast and cable video ads. For example, the Monty the Penguin ad for John Lewis took Facebook by storm in October.

Even AOL Wins with Original Online Video Content

We admit it; we were skeptical when AOL continued its original video content development en masse with 16 new programs this spring. Fast-forward to the autumn, and you can see that advertising on Internet TV programs now accounts for 38% of AOL’s non-search revenue. Even James Franco has joined the AOL line-up with his Verizon-sponsored series “Making a Scene with James Franco.”

Corporate Video More than a House of Cards?

Most technology-driven media giants are following Internet players AOL and Netflix with their own original Internet TV programs. Players include Microsoft, Yahoo! and Amazon.

They’re being joined by some Silicon Valley start-ups, like SlugBooks, a textbook purchasing site. SlugBooks uses its “Dorms” series to drive in-bound web traffic from college students. NASA offers its own TV programming for aerospace nerds.

Most Companies Only Use Video for Their Sites and Social Media

While video programs may be the hot online trend, a survey produced by video production company Flimp shows that most corporate video is created for corporate websites (80.8%) and social networks (69.2%). Some companies are using video for programs, customer service help, sales, training, etc. However, no other use topped 40% amongst corporate buyers.

Dollar Shave Club launched itself with an incredible two-minute YouTube video. The company’s YouTube ads are now making their way onto the traditional screen.

Producing Video Requires Budget

Video production is still one of the most expensive forms of content out there. A two-to-three minute video will cost you anywhere between $2500-$10,000. Original content programs are significant investments that can easily run over $100,000. Why so much? There are many reasons, but we like this list of 25 factors that weigh in on the cost of a video production.

Oh if you want a good laugh check out Dissolve’s Generic Brand Video. It may be the best marketing making fun of marketing video ever.

CMOs Plan to Deliver

CMOs and marketing executives know that video is a priority. Video production is tied as the top line item targeted for spend increases in 2015 at 71%, according to the CMO Council’s annual survey. Better get ready for moving pictures in 2015.

Adobe built an explainer ad to define CMO.com to CMOs. Now we need videos to explain websites.

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Did Arianna Huffington Fire Michael Arrington Over Ethics?

Michael Arrington
Image by Joi

Guest post by Richard Laermer

It appears a couple of different takes on Friday’s story about Mike Arrington leaving TechCrunch, a company which he founded in 2005 and was bought out by AOL in April…

In Friday’s Wall Street Journal article one gets the warm fuzzy feeling that Arrington simply resigned to move on to a bigger and better adventure of running a $20 million venture-capital fund, called CrunchFund, which is to invest in start-ups. CrunchFund is backed by AOL and several VC firms.

TechCrunch is quoted as saying that Arrington will continue to write for TechCrunch, but will have no editorial oversight. When the news broke Arrington tweeted “slow news day.”

Business Insider story quotes Arianna Huffington, the President and Editor-in-Chief of AOL Huffington Post Media Group said, “Mr. Arrington is not being paid by TechCrunch, he does not report to TechCrunch editors and does not report to her or other AOL Huffington Post Media Group personnel.

Reading between the lines, it’s obvious that Arrington didn’t resign. This has all the flavorings of someone who has just been fired.

When Business Insider asked for a clarification on Arrington’s new role (if any), Ms. Huffington said that “Mr. Arrington will be welcome to contribute to unpaid blogs to the company as long as he stays within AOL blogging guidelines.” She went on to say that Arrington’s relationship with at AOL is not with TechCrunch but with AOL Ventures.

Business Insider pressed for clarification on Arrington’s role at AOL. They were finally told that Arrington no longer works for AOL in any capacity. Strong words for someone who the WSJ would have us believe that he just merely resigned. As Business Insider noted this sounds more and more that Ms. Huffington ousted Arrington.

There is a funny coda to the Arringtongate story, according to Business Insider: Suddenly, Arianna Huffington decided she could not have a bad vibe in “her house”.

“The editor just got bounced from the staff by his boss, Arianna Huffington. She found out Arrington and her boss, Tim Armstrong, were planning to launch a VC fund about the very startups that Arrington writes about. Not in her house.”

Oh, really?

Book Excerpt: The Death of Facebook

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The following is an excerpt from Welcome to the Fifth Estate, Chapter 7: Sustaining Your Community Over Time

Who in their right mind would predict the death of Facebook, given its ever-increasing dominance? But everyone always asks, “What’s next?”

One thing long-term Internet citizens have seen over the past 30 years: Communities and social networks get large, even as dominant as Facebook now is, and then they fade.

Some stay relevant as leaders in their niches — YouTube, for example — and others drop into a second tier, or worse. Friendster, MySpace and AOL exist in some form to this day, but none of them enjoys the leadership positions and mindshare of their heyday.

One of the secrets to Facebook’s longevity is its replication of the McDonald’s business model. McDonald’s offers a cheap menu of foods and beverages that contemporary society demands. If a customer wants a latte, they can go to McDonald’s. Ice cream? McDonald’s offers soft serve. Salad? No problem! And McDonald’s still offers the now classic Big Mac, just in case someone wants a burger.

Facebook does the same with its social network functionality. It literally watches competitors create new features, and then it incorporates those functionalities into its network, competing head-to-head in that functional space. Facebook relies on its incredibly large user base to accept and use the new features. We saw this with Facebook Places and the competition it offers Foursquare. Other examples include:

  • Facebook Pictures competes with Flickr
  • Facebook Video competes with YouTube (this feature does as well as a McRib sandwich on market share)
  • Facebook Chat competes with AOL’s AIM
  • Facebook Questions and Groups compete with LinkedIn Questions and Groups

One could argue that the strength of this business model is also Facebook’s weakness. As we have seen over time, Facebook constantly updates its interface to incorporate these changes. This is relatively easy because of its text-based, three-column layout. While text allows Facebook to offer all of these features, the user interface has become clunky and cumbersome. In essence, being the McDonald’s of social networks has forced it into an over-reliance on text.

If a competing technology arose that provided a new interface, an almost completely visual tactile (touch) input to a social application, then Facebook would be challenged to completely redesign its web site. Several new apps on iPad have shown a new way to interact. Early signs show these applications are becoming immensely popular.

One iPad application, Flipboard, allows users to create their own magazines based on preferences and socially recommended content. ABC’s popular iPad app features a visual globe of news stories. Both application interfaces rely heavily on pictures with very few words, and why shouldn’t they, given that a picture is worth a thousand words?

It’s only a question of time—maybe even within the next two years—before a primarily visual-interface-based social network launches. Processing time, software development and bandwidth inevitably will increase to enable it. How will Facebook upgrade its interface to compete with this kind of innovation?

It would take an almost complete gutting of its social networking code. Facebook’s system has become so clunky that Facebook CEO Marc Zuckerberg can’t make changes that he wants to in order to open the network.Plus Facebook’s original feature of private, closed social networking was its big differentiator. The privacy tension caused by the movement toward openness continues to haunt Facebook.

Such a network upgrade likely would force Facebook to abandon users who are still text-based. It would be very hard for McDonald’s to keep serving Big Macs while offering a tastier Filet Mignon sandwich that holds market share (Angus Wraps aside). If you think Facebook cannot unseated,or it will not be by a tactile-input-based network, what about a video- based network? Bandwidth and technology permitting, how about Third Life, a better version of Second Life’s would-be virtual-avatar-based world, where interaction would occur in a computer-generated 3-D environment? Or a video-based network like, but more nimble than, the original Seesmic?

Isn’t it just a question of time before Facebook meets a competitor with a better, next-generation interface that it can’t match? Yes given the context of Internet history and technology development.

If a better, easier choice becomes available, you can expect people to spend more time on it than on Facebook. The Fifth Estate moves with what’s hot, and without thinking about the historical value of today’s technology platform of choice.

Business leaders and strategists cannot afford to become too entrenched on a mega social network like Facebook or Twitter. If an organization cannot move with its community because of an over-investment in one network, it loses the opportunity to serve stakeholders effectively.

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The source material for this section of the Fifth Estate was originally published on this blog under the same title.