Online Video Advertising Levels Playing Field for SMBs

Wednesday Jun 4th 2008 by Daniel Casciato
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For small and medium businesses, online video advertising can play a key role in delivering a unique message that engages consumers and drives them to act.

Soon after launching its online media-editing application One True Media, a California-based multi-media company, discovered that small-to-medium business (SMB) owners were among its most enthusiastic and prolific customers. One True Media's Web site allows users to edit personal media, such as photos, music, video and text, to create mini-movies that they could then e-mail or post to their own Web sites, blogs, or elsewhere on the Web.

"We started noticing last year that many of the videos being created were made by businesses," said John Love, One True Media's COO and co-founder. "They were using our creation tools to make video advertisements, how-to-guides or customer testimonials. That got us thinking that our service ‑ which lets a non-technical person put together something that is very TV-like and easy to use in an inexpensive and quick fashion ‑ might work very well for the business market."

As a result, One True Media officially launched SpotMixer, designed specifically for businesses, in April. "What we have done is taken our underlying technology, re-skinned and slimmed it down to a feature set that appeals to businesses," said Love.

Many of the videos created by businesses through SpotMixer usually end up on that company's home page, YouTube, advertising Web sites, on national guides like Yelp and CitySearch or online yellow pages.

"We made it as simple as possible for the business owner, but it's still high-quality production," said Kathleen Farley, director of product marketing. "It lets the customer get in and out quickly. We feel that this levels the advertising playing field between small businesses and large corporations, which is exactly what we are trying to do."

An Emerging Trend

Online video advertising is emerging as a trend among SMBs, according to Carmine Denisco, CFO and president of Florida-based BizFlick.com. "With the advent of online video Web sites like YouTube and the digital technology available today, it's much easier to get commercials online without spending a lot of time or having to hire a videographer or an editing company."

Amy Shuen, a management-practice professor for the China Europe International Business School and author of Web 2.0: A Strategy Guide, agreed. "Things are definitely very hot in the Fortune 500 space but it's just emerging for the Fortune 50 million and local/regional space."

Shuen credits Google for paving the way for SMBs to enter the online video advertising space.

"Google opened up the long tail of advertising," she said. "In the past, only large companies were able to afford TV advertising or large media campaigns. What Google did with its pay-per-click advertising would actually allow small businesses to have an audience of millions of online customers worldwide. That guarantees you actually have five or 10 times more return on your advertising dollar than if you had done a spot on the radio."

Search engines like Google now provide video within their search results. Benjamin Wayne, founder and CEO of California-based Fliqz, a plug-and-play video platform, calls it one of the best search engine optimization techniques that exist today, but most people aren't taking advantage of it.

"None of the search engine crawlers are capable of reading Flash tags, which means that if you have video on your site, search engines won't find it," said Wayne. "But if you submit it via media RSS into the search engine repository, you have an opportunity to be one of the small pool of videos that show up in the search results."

Wayne expects to see more small business owners take advantage of online video advertisements in the near future.

"About a year ago, there was a lot of conversation about online video, but only large advertising enterprises actually did it because of the price points and the technology complexities," said Wayne.

However, with lower cost and simplified technology, Wayne believes that over the next one-to-two years, more small businesses will come to see video advertising as a necessary part of their marketing mix.

Types of Video Ads

The two types of online video ads prevalent on the Web today are called pre-roll and overlay.

"Pre-roll ads have to be 15 seconds or less, or you'll have people opting out of the experience altogether, which serves no one well," explained Wayne. "Overlay ads pop out at the bottom while the video is playing and will often persist for anywhere from five to 15 seconds over the video. They're less intrusive to the viewer, however they tend to be much less effective in terms of driving conversion."

Wayne encourages pre-roll ads for sites that have high-value content. "It's more effective and the audience will put up with a pre-roll ad because they really want to see the content. Where you tend to have lower value content, an overlay ad is much more successful. In that case, the ad duration is more important because it's less invasive in terms of the experience."

Tips on Producing an Effective Ad

Like any innovative marketing tool, when applied correctly and strategically, online video advertising has great potential. Denisco offers three tips for producing an online advertisement.

"Keep the video short. You don't want to overwhelm the viewer," he said. "Also, keep it honest because the viewer will know when you're being truthful. Finally, show the consumers what your business is all about. If it's a serious business, show a serious business. If it's a fun type of business, then show it as a fun type of business."

Josh Martin, the director of emerging media at ID Media, a direct response and digital services media agency, believe that while a wide range of businesses use online video ads to supplement their marketing efforts, the practice remains underutilized.

"Online video advertising has strong potential in the food industry, especially restaurants," he said. "More consumers have broadband connections, which means you can run a video ad alongside a banner ad with a coupon. This could be great way to distribute coupons and increase in-store traffic, especially for small retailers and restaurants."

Is Online Video Advertising Right for You?

Online video advertising is only beneficial if used by the right kind of company, said Richard Dovere, managing partner of Hardin Design & Development, a full service Internet management and marketing firm.

"Online video advertising is extremely advantageous for companies introducing innovative concepts and products that demand explanation both through audio and visual communication," Dovere said. "It presents messages in a setting that is more conducive to the target watching the video beginning to end than other mediums like television."

On the other hand, Dovere believes that not all products require online video advertising when other forms of Internet advertising will do, such as banner ads. He recommends considering two points before deciding whether online video advertising is an avenue to pursue.

"If online video advertising production doesn't meet a high professional standard, its poor quality will potentially hurt a company’s image," he said. "Additionally, a large portion of people still don't have broadband capabilities, which means that online video advertising will not reach as many viewers as other Internet marketing tools."

Daniel Casciato is a freelance writer from Pittsburgh, PA. In addition to writing for Small Business Computing, he writes legal, medical, real estate and technology-related articles for trade and consumer publications and has his own copywriting business. For more information, visit www.danielcasciato.com.

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