With more than 300 million video views a day and two hours of uploaded content every minute in the MENA region, online video has grown by 20 percent since October 2012, according to figures from Google. The study also shows that Saudi Arabia is the largest consumer (per capita) of YouTube videos in the world and leads the region with the most playbacks, followed by Egypt, Morocco and the UAE. Brands in the region are slowly, but surely, noticing this trending genre and are taking their storytelling online.
Even though paying for online ads is not the only means to reach prospects, noting the power of social media, video search optimization and other tactics have become the vehicles for brands to get their videos out. A report by eMarketer, an independent research company, reveals that the online video advertising market in the US saw the greatest percentage increase in spending across all digital formats from 2012 to 2013. Nearly 20 brands spent more than $10 million on video last year, points out Competitrack’s online video ad tracking service. Still, budgets for online video advertising were small in relation to other media, it says, noting that some leading brands allocated “as much as” four to six percent of their media outlays to online video last year.
The same scenario happened to mobile advertising in 2012, despite the fact that until that year it did not command a marketer’s budget. Yet, when brands started allocating significant numbers to start carving out a separate line for mobile ads, the category really took off. It is still unclear if the same fate awaits online video advertising; nevertheless, current signs indicate that it is headed for unprecedented success in the region.
“Spends on digital are generally increasing, although not to the level one would expect. Spends for online video, in particular, are rising, undoubtedly fuelled by the introduction of advertising on YouTube. Whether this budget is taken from TV, rather than from within existing digital budgets, is a different question, although market data shows TV spends increase year on year,” says Ali Sherriffs, digital director at Universal Media.
Alfonso de Gaetano, industry leader at Google Gulf, is also detecting the genre gaining momentum in the region. “If we look at Google revenues, in terms of growth rate, YouTube is our fastest-growing product. Most of the advertisers, 18 out of the top 20 in the MENA region, have already tested YouTube ads. So penetration is very high. As for frequency, there are two models: you can be there all of the time – every time you have a TV campaign, you will have a YouTube one. This is what most of our clients in the region are doing. The other model is more tactical with YouTube.”
Numbers speak louder
The cyber space has been circulating with reports highlighting the growing trend of online video in advanced markets, calling 2013 the “Year of Video”, not mobile. Some research has also come out to support these claims, like that of GroupM; the advertising company states that viewing is growing on video, with more time spent on devices. According to the released estimates, overall video consumption is up year on year by viewing on computers, connected TVs and mobile devices/tablets.
However, budgets are slow to move from TV dollars to online in advanced markets. PwC’s annual media report points out that online video in the US will increase from $2.3 billion in 2012 to $5.9 billion by 2017. The figure represents nine percent of future online ad spending, but that’s still a small amount compared to TV ads, which it predicts will pull in $81.6 billion, or 37 percent of ad dollars in 2017.
As for video advertising, a study by YuMe Video and Device Advertising shows that it is more effective than banner advertising and has a positive impact on all devices (2.5 times higher favorability, 2.2 times higher brand association and 2.1 times higher purchase intent versus banners).
Don’t be a skipper
Online advertising revenues are going up because more people are watching online videos, but some argue that marketers are increasingly packaging it with “forced view” commercials. In the forced view model, commercials are placed before the video runs (pre-roll), in the middle (mid-roll), or at the end (post-roll).
Yet online viewers don’t have to sit through the number of ads endured by broadcast viewers. They also have the power of “skipping ads”, says Mohamed Mourad, Gulf manager at Google. Add to that, Google’s two-view system, which only charges brands if a user does not skip its ad and everyone comes out a winner.
When Google and Ipsos conducted a study in the US last year to find out how to get viewers to not skip ads, they found out that the first five seconds peaked their interests, which is key to driving viewership. Needless to say, advertisers need to up their creativity game if they want to demand the curiosity of their users. There have been examples of brands in the region that are doing just that.
“One of the things we did for [car brand] GMC is that we built the first two-view ad in the region. It was made for the skippable ads on YouTube, where for the first five seconds a guy explains how he can beat the feature of skipping ads,” says Rayan Karaky, chief digital officer of MENA and emerging markets at Starcom MediaVest Group. “It was a 10-second commercial and it cost nothing to produce,” he adds.
Sherriffs praised the creativity of the GMC ad and how it embraced the concept of skipping ads. “The key difference [between a TVC and an online video] should be that the creative has been adapted to be platform specific. An innovation we have seen globally, and recently locally by GMC, is advertisers embracing the skip ad function on YouTube. TV ads, traditionally, have their call to action or reveal big at the end, but online it is better to hook the viewer early to make sure the user sticks with it.”
Even more so, targeting the right consumers is another vital measure, since the Google/Ipsos study also showed that they are more likely to skip ads of non-relevant categories. “A step further is using video in programmatic buying or RTB, whereby you show your video content to individuals that are relevant to your product,” explains Sherriffs.
Nonetheless, a research by digital video advertising firm, Bright Roll, showed that only 10 to 15 percent of online video ads in the US are interactive. The rest run variations of ordinary TV spots. Unfortunately, this is mostly the case with brands in the MENA region, adds Sherriffs. “The key thing brands have to understand is that putting a TVC on YouTube isn’t utilizing online video.”
The rules of TVCs are being re-written for online video ads, backed by strong original programming investment from the likes of Yahoo and MBC’s Shahid.net, to name a few. Google also began funding original content channels on YouTube in recent years, making it a more curated venue for commercials. Moreover, KSA is producing homegrown digital video studios to cater to its staggering video demand, such as UTurn and Sa7i – both of which enjoy millions of viewers.
“A great TV ad will always have the ability of capturing the audience for 30 seconds, totally immersing them emotionally. Online comes with that additional interactivity, engagement and shareability,” says Boye Balogun, regional director and head of digital MENA at Mindshare.
Video killed the TV star?
It remains unlikely, however, that online videos will ever replace traditional TV; it is a complement to the rising genre. When it comes to branding, video continues to be a powerful choice for advertisers.
According to a brand-tracker study on time.com, on top of the 100 million viewers that a TV spot in Super Bowl reaches, ads in the 2012 Super Bowl were viewed 400 million times online. “The same way that digital revived TV, we are seeing a ‘marriage’ between traditional broadcast and online video. A nice in-between that is becoming blurred to the user and that has advertisers adopting their strategies for the multi-screen era,” says Balogun.
However, research continues to indicate that brands experiment much more with added value than television. An eMarketer report found that 75 percent of ad agency executives say that online video ads are more effective than traditional TV ads, compared with just 17 percent who say they are less effective. That sentiment is shared when comparing online video ads with social media and search advertising ads as well. Ad executives feel that online video ads are more effective than direct response and display ads, according to the report.
“We conducted our first research in the MENA region and we were able to prove that the incremental reach that YouTube is bringing on top of TV is the highest in the world,” says de Gaetano. This study showed that, in Egypt, 23 percent of users surveyed remember seeing an advertisement and 50 percent of YouTube users clicked on the ad to get to the advertisers’ website. Moreover, approximately two thirds of users find the video advertising they see on YouTube interesting, funny and non-disruptive. While, in KSA, almost half of YouTube users surveyed remember having seen ads, with the highest recall for in-video advertising and ad banner at the top of the website.
Nielsen also conducted a study to compare the impact of online video and TV ads based on message and brand recall. Online videos had 40 percent message recall, while TV had only 20 percent. On the other hand, online had 50 percent of brand recall, compared to 20 percent on TV. “When you buy TV ads, you buy impressions. This impression is happening in a period of time where the viewer is in front of the TV. However, it doesn’t guarantee that the viewer will not move away from the TV during commercial breaks. Online is different because the user has to click on a video to watch it and a pre-roll will appear,” de Gaetano explains.
“There is still a pure reach play, which is ‘How can I complement my TV reach with online?’” says Karaky. “Brands choose to produce a multi-million-dollar TVC and they want to run it somewhere else, which is not [necessarily] bad, but they need to consider that when they produce an ad for TV it can be skippable online.”
Balogun believes that clients are interested in an online, as well as an offline, approach. “Our clients are also seeing the benefit of a multi-screen approach and, hence, adjusting their investments accordingly. The industry is moving to a space that we simply call ‘screen’, whether that is online or offline.”
De Gaetano says that clients would benefit the most if they use both TV and online video to complement their objectives and maximize their reach. “The value proposition that we have is that if you combine TV and YouTube, then you are able to plan video in a much more efficient way. If you kill TV, then you miss out on a big chunk of users and if you don’t use online, you are also missing out on another big chunk.” In a nutshell, both media complement one another.
Online video advertising also offers incredibly lower rates than TV and yet bigger reach. “The targeting available allows you to layer in contextual or demographic filters on top of the traditional targeting a TV planner would seek, thereby automatically increasing efficiency and effectiveness,” says Sherriff.
“The key, of course, is to understand your target market. If you are targeting 15 to 30 gamers who love football, there is little point in spending big on TV. However, in the short- to mid-term, traditional TV will never be killed off. More spends will continue and are going to sponsorships, but the big TV spot has too much heritage and is too important to agencies and brands alike to die out.”
Size doesn’t matter
The issue of which screen users like to use for watching videos – TV, computer, tablet or mobile – has been generating mixed answers. YuMe’s report found that videos are mostly accessed from home, especially on laptops and tablets, whereas they are accessed on smartphones when outside.
“Smartphone is definitely the most important device. Our phones are always with us and this is where engagement around short forms of entertaining content happen – just look at the rise of Vine and Instagram video, as well as the popularity of Keek in this region, as signals to how important mobile is. The laptop is probably more relevant when we look at something, such as pre-roll advertising, as people are more engaged with video-on-demand platforms on their laptops,” says Sherriffs.
Balogun shares a similar point of view. “‘Phablets’ are just genius. Phones are getting bigger, notebooks are getting smaller and all I need is a screen big enough for visual entertainment, but portable enough to carry around. However, you will struggle to get any better than the intimate technology of the smartphone.”
Google research done in the MENA region showed that 45 percent of views come from mobile phones. KSA had the highest percentage with 60 percent, followed by 40 percent in the UAE. However, the answer could be much simpler than this. Google’s research in the UK showed that users will use whichever screen is closest to them at a given time.
But these numbers might change after Facebook starts selling videos capped at 15 seconds for $1 million per day or more. The social network had been looking to introduce the ads in July, but recently pushed that back until fall. Video ads will follow the efforts by Facebook’s online rivals to capture ad dollars that have traditionally gone to TV networks. The ads would be the same length as Facebook’s Instagram videos – a feature that was added to the company’s photo-sharing service last June.
Overall, YuMe and IPG Media Labs put the findings of their research, titled: “Are all screens created equal?” in a nutshell: “The much-hyped screen size does not play a role in ad effectiveness”.
Unlike TV, online and mobile are the two media channels where brands can demand performance. Every online publisher can guarantee video views. Moreover, brands can get feedback from customers about their ads, even if they don’t ask for it. Advertisers have an opportunity to migrate from shouting a one-way message to their target consumers to engaging in two-way communications. Interactive video gives the consumer a very valuable element of choice. In addition to having a big chunk of audience engaging in digital video, the medium also presents a big opportunity for marketers, given that online viewers are receptive to ads and that viewing is growing among hard-to-reach audiences, such as adults aged between 18 to 34 and light TV watchers, reveals the Interactive Advertising Bureau study by Nielsen.
But how do brands define the success of online video ads, when they have several factors such as sales, engagement and reach? “Measuring the success of online videos is a combination of several metrics. Reach is always important and, unlike TV, it can be measured online. Recalling the message is a very important element as well,” explains de Gaetano.
According to Sherriffs, the medium also offers more measurements. “Annotations can drive users to other video content. With some video publishers you can incorporate a data capture form or calls to action that drive [users] to your website or social platforms. All of these touch-points can be measured and optimized to drive even better results.”
Yet, he also believes that it all comes down to brand objectives. “A number of brands look to views as being a yard stick to the success of the video, but there is a danger with being too focused on just one metric,” he explains.
Indeed, Balogun sees client objective as a key defining factor to success metric, but not the only one. “With online video, success lies in four things: engaging content, contextual relevance, a distribution approach for the long-tail sites and a destination approach for the most popular media channels.”
He thinks that clients should look at reach/view per dollar spent, as well as engagement/interaction rate of influencers and share ratio per reach. After all, viral videos always create the bigger buzz.
There is a lot of potential for video to grow in the region, even if brands usually lag behind when it comes to digital innovation. The MENA region has shown an incremental boost with video, more so than other markets and budgets are a different thing.
“MENA is behind a number of other markets when it comes to online budgets, despite having countries in the region that globally lead in terms of smartphone penetration and YouTube views per capita. Throw into the mix what you can achieve with online video when you utilize RTB or native advertising tactics and, as a region, we really should be spending significantly more,” says Sherriffs.
Facebook’s widely expected video ads in its news feed this year doesn’t alarm its would-be rival, YouTube. “YouTube already offers the options of sharing videos on various social networks, so we don’t foresee our users migrating to a new portal,” says de Gaetano. Instead, he feels that more should be done to encourage brands to tap more into online videos and realize the value added and, hence, dedicate more budgets to the medium.
“I think conducting more research will show advertisers the value of online videos,” he says. YouTube has partnered with brands in the region to conduct case studies and will be conducting more research in the next couple of months that would include brands such as Souq and L’Oreal.
Others have argued that a Facebook video feed might be a flop, since its marketing strategy has been so far to get users, and not brands, to put it at the center of their daily life. And the popularity of other social networks and applications in the MENA region, such as Twitter, What’sApp and Viber, suggest that people here like to use several options, rather than being dominated by one.
When it comes to branding, video storytelling continues to be a powerful choice for advertisers, but how they evolve to meet the opportunities that the medium is offering will determine its growth in the region.
“What I hope that we do see is more interactive TV ads. Mercedes in the UK used real-time Twitter engagement to determine the outcome of an ad that aired during the highest-rated program in primetime and we see more and more use of hashtags and digital calls to action to drive online engagement. This is the trend to keep traditional TV relevant,” says Sherriffs, who nevertheless asks the question on everyone’s mind: “If I look forward to 2020, what place will traditional TV have in people’s lives?”