Economy Pushes Advertisers and Publishers to Tap Into User-Generated Video Content

A core question being asked about the media and advertising business for 2009 is whether advertisers, as they scale back budgets, will shift increased dollars into tried-and-true network television. "Marketers need to determine how they can put less money to work yet generate greater marketing impact." points out Magnify Media (www.magnify.net) founder and president Steve Rosenbaum, "As they scale back will they put their dollars into network or will they look for their consumers in different ways," Rosenbaum asks. "People are challenged now to do more with less and they are standing back, taking a hard look at their core assets and opportunities. Online video is a growth category and publishers will be turning to video asset aggregation and curated content to generate more page views, more users, and more money while cutting back on their costs."

"Despite the doom and gloom, pre-roll online video advertising remains robust and offers advertisers an important alternative as they seek high impact options that are more consistent with evolving consumer behavior," Rosenbaum comments. In 2008, online video, social networks, widgets and other forms of advanced digital advertising will grow 128 percent to nearly one billion dollars, according to the recently released Jack Myers Media Business Report Advertising and Marketing Investment Forecast (available for free at www.myersreport.com ). The categories are forecast to increase another 70 percent in 2009 and nearly 140 percent in 2010 as the economy rebounds, making it a more than four billion dollar business in 2011.

Rosenbaum has worked in the digital space for more than a decade and in 1995 he created and produced MTV UNfiltered, a program that put the very first user-generated videos on MTV. He is convinced that user generated online video content will provide an expanding array of viable advertising inventory to accommodate advertiser demand. "At any one of 200 to 300 middle market publishers," he suggests, "there is a video solution to generate increased revenues. The expanding model of video discovery and aggregation employed by Magnify and others positively changes the economic model, is valuable for users, increases audience measurability, and has easily discernible R-O-I."

"Niche publishers," Rosenbaum explains, "have a unique and deep knowledge of their space. Their ability to curate a conversation around created, collected and user contributed content is far more efficient than exclusively manufacturing original content." These "three C's of video content," as Rosenbaum refers to them, combining originally produced (created) content, content collected from various professional and other sources, and user-generated contributed content, enables publishers to hand-pick, curate, and aggregate high-quality video content that will appeal to both users and advertisers.

Magnify enables publishers to aggregate and curate video content, increasing their video advertising availabilities in an economic fashion. Rosenbaum points to Magnify client Taste of Home Magazine (www.videos.TasteofHomecom ), which he reports doubled their online video page views within 30-days of implementing the program.

"The ROI is black and white," he says. "They are paying a relatively low cost and they are generating traffic on their site around cooking related video content." Magnify also works with Rodale, Reed Elsevier, Reader's Digest and is in discussions with others. "Agencies and advertisers look for safety," Rosenbaum adds. "They care about video quality and they care that a quality brand publisher has aggregated, reviewed and curated the videos on their site. They want to know an adult is in charge, saying 'this video meets the promise we are telling you it meets... that this is a safe well-lit place where you can be comfortable about your ad running.'"

"As Taste of Home readers come to the site and see they can submit a video, those audiences become more involved and connected to the advertisers," adds Rosenbaum. Taste of Home retains pre-roll rights to these contributed videos at no incremental costs. The video creators at most sites are not professionals and there is no revenue share requirement that reduces profitability. Rosenbaum encourages online video advertisers to use :10 or :15-second commercials for maximum effectiveness.

YouTube, Revver, blip.tv and other dedicated video sites offer contributors revenue share, but Rosenbaum points out most ad sales happen directly through publishers (and publisher ad networks) and video contributors to their sites are more invested in participation and engagement with the content than with personal revenue-share opportunities. While Magnify does host video ad networks, they have not yet engaged in a contributor revenue business model.

Steve Rosenbaum can be contacted at steve@magnify.net

Jack Myers Media Futurist: For more than two decades, Jack Myers has been the media industry's leading analyst, researcher and advisor on relationships among marketers, agencies and media sellers, providing business development services and custom insights on relationship best practices to more than 200 marketers, agencies, media companies and industry service providers. Jack can be reached at jm@jackmyers.com.