19-year-old Chen Liangmin is an ordinary school student, but he is not ordinary on the Internet. His net name is “Qiaolin” and he is one of the most popular podcasts (video sharing) on Tudou. Since he uploaded his first game commentary video on Tudou in January 2007, the total viewership of his videos has exceeded 24.5 million .
“At first I just liked this, but as more and more people watched it, I became more and more motivated.” Chen Liangmin said that while his original video brought huge traffic to Tudou, Tudou also contributed He brought many friends, fans, and even job opportunities. He revealed to reporters that a professional game TV station has already invited him to join as a commentator.
There are many similar podcasts active on video sharing sites. On the night of April 26, Chen Liangmin and other well-known Tudou podcasters gathered in Moganshan to participate in the first “Tudou Film Festival”.
Nearly 200 people from Tudou podcasters, Tudou users, and judges from all over the country packed an old church on Mount Mogan. On the stage, podcasters appeared one after another, showing their talents and receiving awards; off the stage, venture capitalists, Tudou team, and advertisers watched quietly and smiled.
In their eyes, the business model of a video website with original strength and user base no longer exists in imagination.
Explore Ad Formats
Tudou.com, which has been burning money for several years, has started a series of advertising attempts since February this year. The company has successively set up branches in Shanghai and Guangzhou. The sales team has also increased from less than 10 people last year to more than 50 people now. .
At present, video websites can use various advertising types such as background advertisements, banner advertisements, button advertisements, pre-roll advertisements, and implanted advertisements.
However, different types of advertisements have different effects when applied to different types of advertisers. Wang Wei, CEO of Tudou.com, said, “We have been experimenting with advertisements, constantly trying new advertising formats, and watching the effects of user feedback at any time.”
Compared with traditional media audiences, Internet users belong to a relatively young group, while users of video websites belong to an even younger category. Taking Tudou as an example, the data shows that 63% of Tudou users are between 19-30 years old, and nearly 40% of registered users are between 25-30 years old.
“Although the annual income of these people is not necessarily the highest, their disposable income is higher.” Wang Xiangyun, vice president of sales of Tudou.com, said, “Most advertisers are very interested in advertising on video sites. If you are interested, you are willing to try.”
Youku CEO Yongqiang Koo also expressed the same point of view: “Most customers are very interested, but they are all looking for specific feasible ways.”
Since image ads are relatively mature, real video ads have become the focus of attempts by websites, and pre-roll ads were launched earlier. The industry has always believed that pre-roll ads have many advantages, such as having the same visual impact as TV ads, mandatory and ad tracking and statistics that can be realized by clicks.
“But in fact, the effect of pre-roll ads is not good,” Wang Xiangyun said: “Many advertisers don’t want to place such ads, they are more willing to place ads on the homepage.”
According to Yang Weiqing, President of iResearch, advertisers, especially brand advertisers, are more taboo to insert their advertisements in inferior videos or content with unclear copyright, so content and copyright issues are also hindering the advertising of video sharing websites. a threshold of income.
As a result, implantable advertising has become the focus of sales on various websites. Compared with pre-roll ads, implantable soft ads are more effective. By integrating the customer’s product or promotional content into or built into the video content itself, users will be more likely to accept the advertiser’s dissemination information while watching the video.
In February 2008, Tudou.com officially launched product placement ads on the homepage. “Ford Motor has published a series of seed advertisements here,” Wang Xiangyun said. “The final effect is surprisingly good. One of the video advertisements called “Reverse Intersection” set a record of 560,000 hits per day.”
In addition to the “seed advertisement” directly provided by the manufacturer in the product placement advertisement, the advertising effect of UGA (User Generated Advertisement) goes further. Since last year, big brand manufacturers have joined hands with video websites to launch various video creation contests.
At the end of last year, Tudou.com cooperated with Intel to launch a video creative contest. By providing various rewards, users can participate in making advertisements for Intel. “The customer is very satisfied with the results last year, and plans to increase investment this year.” Wang Xiangyun said.
Ku6.com said that it has held video contests for well-known companies such as Yili, Patriot, Lenovo, Motorola, Perfect World, and Microsoft.
Regarding this year’s Olympic opportunity, Youku also took the lead in taking action. On April 15, 2008, Youku and Samsung announced that they had reached a friendly cooperation and launched the Olympic Torch Relay Photoshoot Contest. Koo said that this is just a manifestation of Youku’s strategic content cooperation for the Olympics, and Youku will also carry out in-depth exploration and cooperation in many aspects such as Olympic-related services and celebrations.
Challenging traditional portals
In April of this year, Tudou announced the completion of the fourth round of financing of 57 million US dollars. Including the first three rounds, Tudou has now raised a total of $85 million in financing.
Fu Jixun, a partner of GGV, once said that for Internet companies, if they consider profitability too early, it will affect their long-term interests. The key is to do a good job in content and user experience first.
Although investors seem to be in no hurry to ask for returns, as a rule of thumb, venture capital generally only conducts a maximum of four rounds of financing for a project. At present, websites such as Tudou, Youku, and 56 have completed 3 to 4 rounds of financing, so each website has already begun to make efforts to compete for the advertising market in 2008.
Of course, the contention not only occurs between video sites, but mainly exists between video sites, traditional media, and traditional websites. This emerging media platform has begun to share the advertisements of TV stations and portals.
Last year, mainly due to the increase in TV advertising costs, Seven Star Shopping suffered a huge loss of HK$380 million. As a result, video websites have become a new way for TV shopping to break through. In early 2008, Seven Star Shopping and Tudou jointly launched a commodity channel. “The cooperation between TV shopping and video websites can be more accurate and faster, and you can directly link to the website to buy products without making a phone call,” Wang Xiangyun said. cooperation.”
As advertisers have not yet fully recognized, the current advertising prices on video sites are relatively low. According to Wang Xiangyun, the regular price of seed advertisements on Tudou’s homepage is 60,000 yuan per day, while portals generally cost around 200,000 yuan.
“We are very optimistic about the prospect of video website advertising,” said Guo Yiguang, Director of Digital Marketing Strategy Group of Ogilvy & Mather China, “Because the brand memory rate of video website advertising is four times higher than that of ordinary websites, the effect is very good.”
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Wang Xiangyun said that because the attention of watching videos is more concentrated, the advertising effect of video websites is better than that of traditional portals. “The average daily hits on the seed ads on our homepage can be around 100,000, while banner ads on portals generally receive thousands to 10,000 hits. The click rate of background ads is about 2%, while portals generally have a few per thousand.”
At the same time, the interactivity of video sharing is unmatched by traditional TV media. For example, the UGA model, in which users create advertisements breaks the situation of one-way transmission of information in traditional advertisements, and audiences realize two-way communication between advertisers and audiences by participating in the creative production of brand themes. Users are both an audience group and a communication channel, which can organically combine media communication and interpersonal communication.
However, due to the existence of inertia, most advertisers cannot fully recognize this form immediately. “Not all customers are aware of the advertising effects of video sites, and this market still needs to be cultivated by everyone.” Wang Xiangyun told reporters.
Guo Yiguang said: “Big advertisers are very optimistic about the effect of video website advertising in the future, but now because it is just at the beginning, everyone is still trying.”
Judging from the existing advertising statistics, the acceptance speed of the IT industry is relatively fast. Industries such as consumer electronics, online games and fast moving consumer goods are the main advertisers of video websites.
Survival Dilemma
After three years of development, the competition in the video industry has become increasingly clear from the initial chaotic state. The new regulation on video regulation at the beginning of this year is both an opportunity and a challenge for the entire industry. That’s because higher barriers to entry protect companies that have already entered, while stricter censorship may put video-sharing sites under the same scrutiny as mass media.
In the early days of development, fringe and copyright-free content attracted a lot of traffic to video sites. But now, if they want to obtain the “Information Network Dissemination of Audio-Visual Program License”, the video site must completely solve these two problems. However, censoring content requires a lot of human costs, and purchasing copyrights requires huge sums of money.
How to continue to develop under such circumstances and maintain a considerable number of users and traffic is the biggest difficulty for video websites. In addition to these disturbing factors, it will take time for the video advertisement itself to be truly recognized.
“Now the video website industry lacks a unified standard, and some existing ranking statistics are not authoritative,” Guo Yiguang believes, “If there is a third-party standard recognized by everyone in the future, it will have a huge impact on the advertising market of the entire industry. Benefits.”
This is also the reason why the CPM (cost per thousand impressions) billing method is not generally recognized in China, because advertisers cannot distinguish the authenticity of the data, and it is difficult to sell video ads if the CPM method is not recognized.
It is understood that starting this year, video sites have begun to transition to selling CPM.
According to iResearch’s forecast, in 2008, China’s video advertising (only referring to the form of pre-roll advertising with online video as the carrier) revenue will reach 480 million yuan. Correspondingly, the number of online video users will increase to 240 million, and more than 85% of Chinese netizens will become the audience of video advertisements.
Wang Xiangyun believes, “If customers allocate advertising budgets in the future, they will naturally allocate a piece to video websites, which means that the market is truly mature.”
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