The Rebooting’s Brian Morrissey recently surveyed over 150 media executives on all aspects of the video industry – from video production, monetisation strategies and content strategy. His findings? The internet continues to evolve in the favour of video but the format still remains under-exploited by media companies of all sizes. Read on…
A decade or so ago many media commentators believed that publishing was on the cusp of a new era. Video content was going to explode across the web and media companies were in a prime position to capitalise on its popularity. They would soon be enjoying the boom in advertising, including reaping significantly higher CPMs than standard display ads.
And while the media seers were right in that video content has become ubiquitous on the web – Sandvine concluded that 65% of internet traffic in 2022 was video, mainly powered by social platforms like TikTok and Instagram – many publishers are still waiting for the payback.
It was this disconnect among other things that inspired Brian Morrissey the Founder behind The Rebooting email newsletter and podcast to take stock of the state of video among mainstream media companies.
Enabled by his partner VideoElephant, Morrissey quizzed over 150 executives from media companies, mainly from the US and UK, about their video production systems, monetisation strategies and ambitions for video content. And the results, delivered in this report, make illuminating reading.
As Morrissey explains,
“When I speak to publishers, I ask them their top priorities. I regularly hear video, along with areas like commerce or events. (I rarely, if ever, hear display advertising.) A solid majority said video is a top priority, yet under a quarter said that video advertising makes up over 25% of revenue.”
Is video too complex for publishers?
So why does video remain under-exploited by media companies? Is the creation and monetisation of video seemingly just too complex and difficult to scale? One thing is clear, the video revolution has changed the web irrevocably,
As Morrissey notes, “The Internet is moving towards video. According to one estimate, 65% of Internet traffic now is video. Think about your own habits. The fastest-growing content – TikTok, Instagram – is video, it’s not pictures anymore.”
Publishers also have other very sound reasons to pursue video strategies. As Morrissey explains, “With display being such a tough market, a lot of publishers have turned to video because there is a ton of demand for video advertising inventory.”
Morrissey thinks that many media companies may have bet heavily on video a few years ago and not seen the results they expected, so they are wary of going big on video again.
We saw people build up big video teams. These are very expensive and the revenue never followed. So I think there’s a once-bitten twice-shy phenomenon going on. We found too that as many as 45% of respondents outsource their video content, so there’s clearly some reticence.
Where are the bespoke video ads?
Another issue that the report focuses on is the difference between the expectation and the reality of how much money video content generates. Sure the CPMs are much higher than standard display advertising, but as highlighted earlier some of this has to be used to offset the high production costs of the content.
In addition, the high-quality video advertising that some media companies were expecting has never materialised. Yes, some high-profile news publishers have attracted large sponsorship sums, but a lot of video advertising has been generic and all too often programmatically-delivered.
In short, brands are making video advertising content for many diverse platforms from connected TV through to social media and simply don’t have the resources or the inclination to create bespoke content for media brands.
Besides, as Brian Morrissey points out, a lot of publishers don’t have the scale to sell their video inventory directly and so they end up turning on programmatic demand systems.
“At the end of the day I think this is the essential challenge facing a lot of publishers. Publishers want to have video advertising on their sites because of the higher yield. Brands pay more for video ads than they do banner ads. Far more. The problem ends up being a lot of publishers are still mostly in the text content business. Mixing chocolate and peanut butter works. But mixing oil and vinegar does not. And sometimes video in these very text environments is oil and vinegar, not chocolate and peanut butter.”
It’s a challenge because you’re trying to balance the expectations and needs of your audience, with the expectations and demands of your advertisers, with your own business needs. And trying to square all these things is really difficult.
Is AI the magic bullet?
One potential solution could be the incorporation of Artificial Intelligence into video content creation. There are already a host of AI-based tools (Fliki, Synthesia, HourOne, etc) that can help media companies significantly speed up content creation and potentially scale it too.
Morrissey thinks that while AI might have its uses for improving the quality and efficiency of video content, it is no magic bullet.
“I remember years ago, I wrote a newsletter about the easy button. Inside every company that I’ve ever been part of, there’s always this impulse to reach for the easy button and to look for the big switch. It’s like, yeah, we’ll just turn on this switch and then a bunch of revenue will show up. And that usually doesn’t happen.
“It’s hard and it takes way longer than you think. And so we’re going to see people look to take shortcuts, that’s inevitable. It’s a human condition, it’s not a publisher condition. It’s a human condition and AI is very enticing as the ultimate shortcut. So we’re going to see a lot of people deliver bad AI-created video content with the idea that they won’t have to pay much to create it but they’ll be able to monetise it. So there’s going to be a lot of crap.”
Ultimately then we return to the core question. Is it time for publishers to pivot on the pivot to video and maybe look for other ways to generate new income?
“I said this in the intro to the report, I recounted a conversation I had at a dinner in Cannes where I asked one of the executives ‘What are you optimistic about?’ And he said the end of pivots. What he was getting at was I think digital publishing specifically. He has been hunting for a saviour for too long.”
The video report is available here. You can also watch the highlights of our video with Brian below: