What kind of a video commerce industry blog would this be without a “Top 10″ List of Predictions for the New Year? We won’t know - at least not this year! It’s time to share our list of predictions for the video commerce industry in 2009.
10. Online merchandising video dominates the focus of video commerce throughout 2009. Enough e-commerce sites are seeing measurable revenue growth from merchandising video on-site that existing and new entrants in the video commerce space will continue focusing the bulk of their video production and acquisition resources on this specific type of online video. Online merchandising video also plays best as a customer loyalty and conversion tool as opposed to a customer acquisition tool. It makes sense to focus video commerce efforts on loyalty and retention in 2009 as retailers hunker down to weather the current economic storm. The proof that online video works is already out in the market and will appeal to marketers and merchandisers craving more ROI certainty in uncertain economic times.
9. Video SEO matures while the hype begins to dwindle. We will start to see the early fruits of Adobe and Google’s late June blockbuster announcement that Google would begin spidering links in .SWF files. In the meantime, measurable results from video SEO will remain concentrated around video metadata such as transcriptions, descriptions, and page structure. We will see more video SEO cases emerging throughout the year in the retail space and new adoption of video SEO techniques in e-commerce.
8. eMarketer misses its online video advertising projections of 45% growth in 2009. While the retail vertical traditionally lags other verticals when it comes to online ad spending (automotive, pharma, and CPG all typically outspend retail), 2009 will not prove itself a breakout year for online video ad spending in our space as most e-commerce organizations intensify their focus on customer loyalty and retention as opposed to acquisition.
7. Commertainment gains minor momentum. Production of entertainment content blended with e-commerce (”commertainment”) will continue to accelerate as retailers seek to more deeply root themselves in the daily lives of their customers and develop new merchandising opportunities, but the requirement for ongoing, regularly scheduled, self-produced video content will cause most online retailers to delay investment in commertainment initiatives until merchandising and syndicated video are well-proven and widely adopted within the enterprise.
6. Video commerce analytics come into sharper focus. While most e-commerce sites will continue focusing on page conversion rate and revenue attributable to video, industry leaders will dig deeper to understand what drives those key metrics. Viewer attention & engagement will emerge as metrics to watch as organizations seek ways to build efficiency into their video production processes while allocating spend on production more intelligently based on what’s actually driving video engagement (e.g. actor, length of video, promotional v. educational focus, set design, production style).
5. More retailers will experiment with affiliate video in a bid to increase customer acquisition from existing affiliates. Affiliate marketers will remain focused on CPA deals, yet most will not fully realize the potential of affiliate video marketing in 2009. The higher production cost of video relative to other media coupled with increased demand for performance-based media places a special pressure on affiliate marketers in the world of video commerce.
4. Online retailers continue to struggle monetizing video syndicated to emerging channels. Syndication of e-commerce video assets to emerging channels (e.g. YouTube) remains a useful method for building awareness, but few retailers have successfully generated meaningful revenues. We’ll see more e-commerce sites attempt to overcome the user experience limitations of off-site video destinations with their own homegrown efforts focused on video SEO and driving traffic to on-site product pages.
3. More e-commerce merchants invest in self-produced video. The generally bleak economy will cause many retailers to delay significant new investment in video production until much later in 2009 or 2010, which means there won’t be a lot of growth in the professional video production market due to retailer demand. As a cost-containment measure, more online retailers will embrace the YouTube philosophy of “Everyone’s a Producer” and produce video in-house with existing staff, relatively inexpensive production gear, and simple sets. We’ll also see mild to moderate growth in the e-commerce video consulting market as retailers struggle to understand how to best integrate video into the organization and deploy video most effectively on and off the e-commerce site. Consumer Generated Video (in the form of product reviews) will not be a major factor in most video commerce efforts in 2009. Those retailers that do succeed with consumer generated video will tie content creation to contests or discounts in order to entice consumers to create video content.
2. Video’s cross-channel nature continues to create confusion while setting off internal power struggles for ownership. Each channel owner within an e-commerce organization has a distinct set of needs when it comes to online video, yet the scarcity of video content coupled with the possibility of reusing a single video asset in many ways will require stakeholders to come together and cooperate so the entire organization benefits. Leading retailers will begin the process of centralizing video management within the organization this year, but power struggles will be common as business owners attempt to maintain control and prioritize the rollout of video based on a narrow vision of video commerce that fails to generate leverage for the entire business.
1. Supplier / manufacturer produced video content really takes off in 2009. Retailers reticent to ramp investment in self-producing video will increasingly lean on their own suppliers to create content. This trend will prevail across all non private-label retail categories (e.g. consumer electronics, health & beauty, home improvement, baby, etc.) but will be especially pronounced among the mass merchants and specialty retailers that carry the most leverage with suppliers.
The new surge in demand for video content from retailers will signal the official launch of the mainstream video commerce era and a new power paradigm that reverses an economy of scarcity where video content is limited to supplier content acquired through retail syndication networks or one-off relationships between buyers or merchandisers and vendor reps to one of abundance as more suppliers struggle to meet the demand of their retail distribution channels for additional video content.
The rise of supplier video content will have long-lasting and profound implications for suppliers, retailers, video producers, and other industry stakeholders. For video producers, a surging market for video content from suppliers will buoy demand for video production services. We’ll see more video production companies pop up while established companies should see 2009 as a year of growth despite the tough economy. Retailers will quickly build libraries of video content and will be able to understand the real impact of video on the core business. New technology providers will emerge and those in the market will need to adapt to best situate themselves to accommodate the new demand from retailers.
We will also see a new trend related to supplier video: customization of video content by retailer. As retailers embrace syndication and seek differentiation from competitors, they will demand unique video content. This demand will spawn a new generation of tools, place additional burdens on the video production process for suppliers, and accelerate the demand for retailer-produced video.
All told, while 2009 promises to be a tough year for many of us in e-commerce, the future of video commerce looks bright. Video commerce is one of the few truly new innovations in e-commerce, and continued interest in video across e-commerce organizations practically ensures video adoption will only increase over time. Happy close to 2008, and as always…
Happy Selling!
December 30th, 2008 at 6:33 pm
Justin – Great predictions for 2009! Having spent much of 2008 working hard to get video off the ground at online shoe retailer Onlineshoes.com I had a few ‘from the front lines’ comments regarding your predictions.
10. Online merchandising video dominates the focus of video commerce throughout 2009.
I agree. Merchandising video will be video for eCommerce’s largest revenue driver in 2009, particularly with engaging videos at the product or categorical level. These videos will either educate or entertain the consumer, and have a positive effect not only converting the consumer towards a sale, but also by increasing the consumer’s lifetime value potential.
9. Video SEO matures while the hype begins to dwindle.
Extolling the virtues of video on SEO in general feels tantamount to evangelizing feline phrenology, but we’re seeing traffic. 2009 will be the year we figure out the ‘how’ and ‘why’ we’re seeing increased traffic to video.
8. eMarketer misses its online video advertising projections of 45% growth in 2009.
Video for eCommerce is still in its infancy and until we figure out the time and place for video on the web we can’t put a figure to how much ad spending will roll its way. With Commertainment videos on YouTube getting a million plus hits per video, 2009 will be the year marketers figure out how to advertise to online consumers via video. My guess – creativity will pay off.
7. Commertainment gains minor momentum.
With already a dozen plus large brands incorporating commertainment into their marketing strategy I expect we’ll see big growth here in 2009. Video ad displays will not garner the ad revenue eMarketer forecasted, but commertainment advertising will pick up a moderate portion of the ad spending slack.
6. Video commerce analytics come into sharper focus.
Video specific analytics that revolve around engagement are important (READ: Critical), but video for eCommerce is still young, and most dot coms are still at a stage where we’re either attempting to get video off the ground or just past that initial stage and moving on to prove out ROI for the little we’re investing in it. 2009 will be the year that video for eCommerce becomes a proven ground for driving revenue and acquiring new customers thanks in large part to the simple key metrics like conversion, AOV, and revenue.
5. More retailers will experiment with affiliate video in a bid to increase customer acquisition from existing affiliates.
I know I will. Video is exciting – once you create a video asset your ability to leverage it becomes almost endless. When marketers figure out the how to leverage their video assets within the affiliate channel we’ll start seeing a whole lot more product, brand and categorical specific video assets all over the web. We’ll reach new customers and provide a benefit to the consumer (knowledge or entertainment) that will only help with off-site branding.
4. Online retailers continue to struggle monetizing video syndicated to emerging channels.
Online retailers struggle with syndication only if they haven’t either built a homegrown solution or found a third-party solution that programmatically syndicates media content anywhere they want to be seen. Syndicated video then becomes a free portal (additional traffic acquisition channel) thru the use of embedded links within the player back to the retailer’s website. Monitor your referring domain traffic and you’ll see that these videos can contribute a healthy portion of incremental revenue.
3. More e-commerce merchants invest in self-produced video.
Who knows your customer base, your brand and your product better than you do? Current economy or not, why would you want anyone else to produce this content? User generated content in the form of video product reviews will commence soon after retailers begin the conversation by using video online first.
2. Video’s cross-channel nature continues to create confusion while setting off internal power struggles for ownership.
Good video for eCommerce is heavily reliant on Merchandising and Marketing teams that can play nice and having clearly a defined business owner is more than a little bit helpful. Video is a telling extension of your brand and successful online retailers will bring in new talent that can evangelize video, oversee the production of video content, manage cross-department communications and planning as well as make sure everyone continues to play nice without the need for toes to get stepped on, or feelings to be hurt.
1. Supplier / manufacturer produced video content really takes off in 2009.
Manufacturers have been producing video content for the past few years and the tough economy will only increase production, but not for the direct benefit of online retailers. More and more manufacturers are breaking down the direct to consumer barrier by selling direct online. As the economy gets worse manufacturers will use video to help compete with their merchants for the same customer.
In addition, most online retailers will not want to be using the same video asset that all their competition is using as well – video content is quickly becoming a value prop, a great point of differentiation that allows online retailers to sell consumers on their products, their product knowledge, and their brand.
Video for eCommerce is taking off faster than almost anything else in the Marketers tool belt because it offers a rich dimension to every way we communicate with our customers whether we’re attempting to acquire a new customer, convert an online customer or retain a valued customer. This has been a great year for video for eCommerce and it is a safe bet 2009 will trump this year six ways to Sunday.
Thanks for the great 2009 predictions and for everything else that the VCC brings to online retail!
December 31st, 2008 at 3:11 pm
Jimmy,
This is an incredible post! A few key points you mentioned I wanted to call out again because I think repetition here can’t hurt
Point 5: You mention leverage. You’re right, of course. Video is about LEVERAGE, LEVERAGE, LEVERAGE! Too many organizations keep video locked up in one part of the organization, whether it’s in-store video, merchandising video, TV ads, etc. The beauty of video is that it can be produced once and then re purposed to best suit the new application.
Point 2: You mention marketers and merchandisers playing nice with one another. You of course could not be more right. This ties in with the idea of leverage. Marketers and merchandisers who parter on video create more value for the entire organization. In many cases, it’s a classic 1+1=3 type of situation.
Your conclusion: you summed up the reason video is growing perfectly. Video provides a richer customer experience no matter how it’s applied.
January 3rd, 2009 at 3:51 pm
“5. More retailers will experiment with affiliate video in a bid to increase customer acquisition from existing affiliates. Affiliate marketers will remain focused on CPA deals, yet most will not fully realize the potential of affiliate video marketing in 2009. The higher production cost of video relative to other media coupled with increased demand for performance-based media places a special pressure on affiliate marketers in the world of video commerce.”
I think you are going to see a lot of merchants trying to figure how to extract more value out of their affiliate network in 2009. Times are tough, and paying at 10-15% commission on top of 10-20% discounts consumers are expecting these days is squeezing margins like never before. I expect video to play a big role in improving affiliate conversions and overall ROI. Thank you.
January 5th, 2009 at 9:55 am
I think 7 is a big one. If someone can really nail the balance of getting their message in front of people with quality entertainment, it will open the flood gates.