Electronic Retailer - May 2012 - 35

GUEST VIEWPOINT

BY JAFFER ALI

Is Video Commerce a Game Changer?

If you are marketing online and not yet using video in some manner on your website, you may want to pay particular attention to this article. In the past few years, the use of online video has shifted from being a novelty to a requirement for any company looking to gain an edge. Presently, more than 70 percent of online retailers use some form of video. Online researcher eMarketer released a study stating that sites using video had a 9 percent increase in time spent on the site versus those not using video. As time spent on a site increases, conversion rates also increase. According to Jupiter Research, nearly 40 percent of videos viewed resulted from search. Video search is here to stay and having video on your site is one more way to generate traffic. And when it comes to traffic, search traffic may not be scalable, but it is free and anytime you can grab some free media, do it. Before we get too far down the rabbit hole, let’s define video commerce. Video commerce is using any video to aid in the transactional process online. Video can be used to drive traffic, and video can be used to help close the sale. Many reading this are TV direct response marketers who probably think they know everything they need to know about producing and using video to lead to transactions. But you would be wrong to think you can transfer shortform commercials or long-form infomercials online and be successful. Been there, done that. Or, in 21st century millennial lingo, epic fail! Let’s take a survey of different ways video can be used online to drive online sales.

Traditional DR spots yell or bark at you from afar. The computer screen is usually less than 3 feet away from the audience, and this barking is a real turn off in the intimate setting of a person sitting at home or work with a laptop.

Using Short-Form as Pre-Roll
Here, you take your short-form commercial and place it before content clips in the hope someone clicks to your website to order. Even without the end slate, you are looking at around a 48-second commercial, and this is entirely too long for online video. Pre-roll length is presently beating a path from 5 seconds to 15 seconds. Abandon rates exceed 40 percent for 30-second spots and increase precipitously the longer the commercial. Click-through rates are now less than 0.5 percent and decreasing annually. Cutting your commercial to shorter lengths will lower abandons, but click-through rates decline even further. The numbers simply do not work for websites or DR marketers. Rates on YouTube for RON range from $10/M to $13/M and online ad networks range for remnant from $10/M to $15/M. Let’s take a look at the economics: 1,000,000 views at $10/M = $10,000 buy Abandon rate for a 60-second spot = 50 percent Total Video views to end: 500,000 Click-through rate at 0.5 percent = 2500 visitors = $4 per visitor Conversion rate at 2 percent = 50 orders = $200 CPO (Cost Per Order) These are actually generous assumptions. Abandon rates may reach 70 percent, and pre-roll is charged on the commercial loading, not actually being viewed. The main advantage of using pre-roll is that you can get wide distribution. The negative is that you have about as much chance of making this work as having a snowball fight in hell.

Short-Form On Your Website
Taking 2 minute or 60-second spots and slapping them on your website (minus the end slate, of course) is better than nothing, but not much better. Why? Online is a different medium from television. It is more intimate.

Online viewing is more of a “snacking mentality.” Video snacking is a term for watching 1-minute to 5-minute video clips rather than the full program, or meal.

May 2012 | electronicRETAILER

Electronic Retailer - May 2012

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