Online Video Has Too Much Potential; Don’t Make TV Broadcaster Mistakes
Forget the fiscal cliff--focus on fiscal 2013

Whether you’re in consumer or B2B, it seems like everyone’s jumping on the video bandwagon to connect with customers and clients and to show they’re cool. However, if you’re using video to steer prospects closer to a purchase decision, then you better take the high road and keep the intrusive hard-sell to a minimum.

New research from AOL and QaulVu indicates that consumers would rather be pitched prior to watching short videos rather than being pitched at the beginning and middle while watching longer videos online. "Consumption habits are evolving rapidly, and we're seeing consumers display many of the same ad avoidance tendencies online than they do with TV," said Ran Harnevo, senior vice president of The AOL On Network, in a press release.

Our Take. Duh! But before dismissing this report as just another expensive exercise in restating the obvious, let’s drill down into some useful kernels of insight:

The AOL/QualVu study found that ads in short-form content actually produce significantly higher recall, brand affinity and purchase intent than those in long-form content.

Additional findings include:

• Ads in short-form videos are more effective than ads in long-form content-- short-form video produced a 25 percent higher brand recall and a 42 percent higher purchase intent for the featured product or service.
  
• Viewers are adopting traditional avoidance behaviors during ads within long-form videos. If ads are too frequent and interruptive; they’ll avoid them altogether (by walking away, going to other sites, multitasking with their phone). This is the same “annoyance” behavior that is demonstrated when viewing television without the use of a DVR.
  
• Consumers want content that’s more targeted and more humorous. Researchers found that 67 percent of respondents would be willing to answer a question to make their ads more personalized and enjoyable.
  
•  ‪Consumers understand the exchange of free content for advertising, but they want to make sure their time tradeoff of watching ads also benefits them. They found coupons, contests and links as the most positive forms of engagement.

Don’t insult the viewer’s intelligence. They’re busier than ever and have a myriad of myriad of ways to bail on you instantly if you bore them, bother them or overbear them with your message.

Fiscal cliff and beyond

Whether or not Congress sends us over the fiscal cliff next week, it can’t stop the calendar from rolling over into 2013. You have budgets to meet, customers to serve and new products to roll out. At the end of the day, most of you are in businesses that won’t live or die by new capital gains rates on the ultra wealthy and a few more bucks taken out of the average worker’s paycheck. They’ll be some residual impact, but the overall macro economy is showing more positive signs than ever and the so-called cliff is more likely to be a gradual slope than a one-step painful trip to the auto body shop.

Are we out of the woods yet? Not by a long-shot, but it’s going to take some real legislative hubris in Washington to put us on a direct flight to Recessionville.

Here are some positive macro-indicators that have us encouraged:

• The U.S. economy grew faster than expected (3.1%) in Q3 according to the Commerce Department. Consumer spending, which the Department says fuels 70 percent of the economy rose 0.4 percent in November and incomes rose 0.6 percent, the biggest gain in 11 months
  
• Homebuilding permits reached their highest level since July 2008 in November the Commerce Department reported Wednesday. Further evidence of consumer confidence and demand is that mortgage rates are actually inching higher according to a separate report from the Mortgage Bankers Association.
  
• The National Federation of Independent Business reports that the share of small business owners who say their credit needs are not being met is falling.
  
• Corporate profits are at a high. They’ve amassed mountains of cash waiting for fiscal cliff and other issues to be resolved. They have tons of cash available to buy cash or hire people when the feel secure enough about the recovery.
  
• Consumers have become a lot more responsible about debt. They’ve significantly deleverage themselves since the downturn began and are finally feeling a little better financially, especially with housing market bottoming out according to experts.
  
• Household formation is picking up: Young people are finally getting some form of employment and moving out of the parental nest and into their own homes, according to Moody’s Analytics. Demographic data suggest there should be about a million more households headed by younger Americans today than there actually are—that bodes well for continued formation of households and typically injects about $150,000 of output per household into the economy, according to Moody’s.
  
• The average vehicle on the road is at a record high of 11.2 years, according to research firm R.L. Polk. Experts expect pent up demand for new cars being unleashed (especially as job market slowly improving and workers need reliable transport to get to their jobs).

Conclusion

Have some eggnog. Unwrap those presents and let’s hit the ground running by the middle of next week. Don’t wait for the day after New Year’s. We’ve got to much work to do. The world didn’t end when the Mayan calendar expired yesterday and it’s not going to end on January 1. You customers, clients and constituents are counting on you.

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TAGS: AOL, QaulVu, Ran Harnevo, Commerce Department, fiscall cliff, online video advertising, ad avoidance, R.L. Polk, Moody’s Analytics, National Federation of Independent Business, Mortgage Bankers Association