Online Video Monetization Strategies: Yahoo! - Summer Internship Project

Online Video Monetization Strategies
Yahoo! Summer Internship Project
By Achal Arora | Intern at Yahoo! | From IIM Lucknow Reporting Manager : Suresh Kumar Kalyanaraman
AGENDA
1. Problem Statement 2. Methodology 3. Findings Summary 4. Highlights of Mid Review
5. Video Monetization Strategies

6. Conclusion
1. Problem
Statement
How to better monetize the video ad inventory available to Yahoo! Through premium online videos in India?
Problem Statement
2. Methodology
Literature Study
Stakeholder Interviews and Discussions
Surveys
Methodology
3. Findings
Summary
Key Findings New Ad Formats User Engagement Other Monetization Strategies
Online Video is at an exciting stage, with larger and

more engaged audience ever New Advertising formats are succeeding which is good
for viewers , advertisers and publishers as well

The integration of various screens TV, Mobile, Tablet, PC is increasing Monetization of Online Videos depends mainly on The Content, User Engagement and Interactive Ad Formats
Findings Summary
Two Types : Parity Achievers and Game Changers

Parity Achievers (Short Term)
Slate Ads Shorter PreRoll Ads Mid Roll Ads Companion Banners Branded campaigns See It Later Ads In context Ads Display Ads shown along with video Survey Ads
Game Changers (Long Term)

InVideo Product Ads Buying Banner Space in Video content Sponsored Video Frames Ads at the end of the video (Display Ads) Sponsored Events in long form content Information about the relevancy of the ad
Findings Summary
User Engagement
Depends on
Content (Not in Scope of project) Video Platform
Suggestions for Video Platform

Capability to source ads based on length of video Uniformity of experience across videos Frame preview feature Reduce loading time Autoplay On/Off Subtitles On/Off Capability to shows ads only when user is engaged
Other Monetization Strategies

Yahoo! Digest Mobile app An excellent recommendation engine is a bare minimum 63.75% users voted for upcoming movie trailers to be shown as ad Online Contests
Findings Summary
4. Mid Review
Highlights
Why Online Videos? Market Scope Market Size Competitor Analysis
Why Online Videos?

Internet (Information cloud) Search Engines (Yahoo!, Google) Helped in arranging the information
Issue of Discoverability
Online Videos Site like YouTube, Yahoo!.
Social Networking like Facebook, Orkut etc. A picture is worth a thousand words
Information Aggregators like Yahoo!, AOL etc.
Much more expressive Seamless integration through 3 screens UGC content viewership is huge
Mid Review Highlights
Market Scope
Asia has the highest internet users across world, and India is having second highest number of Internet users within Asia with the highest growth rate Asians are 11% more likely then the world average to watch an online video 71% of online population in India is streaming online videos Huge Growth expected in Mobiles and Internet TV sales
2500 2000 1500 1000 500 0 Internet users Asia Europe NA LA Africa Middle East Oceania
Asia
China India Japan Indonesia South Korea Vietnam
Internet Users CAGR (2000-11) World 18.18% Asia- 21.89% India- 33.6%
In Jan 2011 in India

30 million UU world 71% Internet Audience 1.7 billion Total Videos viewed
16 14 12
9.1 billion Minutes
Units Sold in India (millions)

2011 2012E 2013E
58 videos per user 5 hours per viewer

Broadband subscriptions in India (million) 42.6
34.1 26.7
10
30 million unique users watched online video in India in Jan 2011 with an average of 58 videos per user The slow growth rate in Broadband subscriptions and low internet penetration in India are the main roadblocks
8 6 4 2 0 Mobiles Portable PC Desktop Internet TV

2009 2010 2011
15.2 7.8 11 20.3
2012E 2013E 2014E 2015E
Market Size
Newspaper and Television will remain the popular destination for Ad spending
$4,000 $3,500 $3,000 $2,500
$200.00
190
Ad Spending in India, by media (millions)
$300.00
$250.00
Mobile Ad Spend (millions) and growth % in India 247
Internet ad spending to almost double in 2013 from its 2010 levels
$2,000 $1,500 $1,000

$150.00
116.8 125 90 70.2 56.5
$100.00 $128 $166 $214 $273 $50.00
$500
Huge growth expected in mobile ad spend
$0 2010 2011 2012E 2013E
35.4 20.8
59.5
59.3 38.9
52 30
Newspaper
Internet
TV
Magazines
6.80%
Outdoor
Cinemas
9.00% 10.00%
Radio
$0.00 2009 2010
2011 2012E 2013E 2014E 2015E
Video ad spend market in mobile category expected to grow to a market size of 22 million by 2015.
Mobile Ad Spend by Category in US

4.70% 5.80%
Mob Ad Spend
Growth%
8.00%
25.00 20.00
Video Ad Spend in Mobile in India as per US market distributions (millions)

22.23
There is a huge opportunity in: Capturing ad spend market from traditional sources Have a presence in mobile domain
15.20 15.00 10.00 5.22 5.00

2011 2012 2013 2014 2015 2016
8.50 2.66
Search
Banners And Rich Media
0.00
2011 2012E 2013E 2014E 2015E
SMS/MMS
Video
Competitor Analysis
Yahoo is active only in premium online videos and the revenue model is purely ad funded for now.
Competitors in India UGC

YouTube Yahoo BigFlix Spuul ErosNow Facebook Metacafe Dailymotion
Premium

Movies

Music Videos

TV Shows News

Sports

Others

YouTube is the major competitor in this segment. And statistics shows that they are investing in a huge way in this domain. Google
News Channels Sports Channels TV Channels
Play has been launched in US

But there is no clear market leader in premium video segment in India.
Total Unique Viewers (000)

Google Sites Facebook
Videos (000)
Google Sites Metacafe Facebook
Minutes per Viewer

Network 18 Google Stes Dailymotion
Most of the competitors have a presence in mobile domain This presents an opportunity to be an early mover in this domain and attain #1 or #2 position in this segment in India.
Jan 2011 Rankings
Metacafe
Yahoo! Sites
Dailymotion. Vevo Network18 Rediff.com Microsoft Sites MIPS.TV
Daily Motion
Yahoo! Sites Network 18 Vevo Microsoft Rediff MIPS.TV
MIPS.TV
Vevo Metacafe Microsoft Sites Yahoo! Sites Facebook Rediff.com
The biggest issue with Yahoo! Is low user engagement
Online video monetization strategy demands a perfect mix of Quality Content, User Friendly Video Platform and Interactive Ad Formats. These three fronts when covered competently will help Yahoo! In better monetization of its ad inventory.
5. Roadmap
After Mid Review
Video Monetization
Analysis of Advertiser Experience
Analysis of various ad formats
Analysis of User experience
Other Monetization strategies
Analysis of the content available Analysis of the video platform
Roadmap After Mid Review
6. Video
Monetization Strategies
Analysis of Advertiser Experience Analysis of User Experience Other Monetization Strategies
Aim of Advertising
Inform consumers, influence thoughts and elicit an emotional feeling about a brand that results in positive brand perceptions and increased sales
Advertiser Experience Enhancement

By providing various options in ad formats and a high user base on Yahoo which will in turn help in targeted advertising
Ad Formats
Currently only pre roll ads of 30 seconds are shown which are same across the videos and across the users.
Video Monetization Strategies
Innovative Ad Formats used by other players - HULU
Slate (Branded, Premium) First to be viewed by user, Premium category involves a small video or product animation
Branded entertainment selector

Ideal For Product Demos and informational messaging
Innovative Ad Formats used by other players - HULU
Ad Selector
Gives user the option to select a commercial from the available options
Survey Ad
Gives user the option to fill a survey instead of watching an ad
Innovative Ad Formats used by other players - HULU Some other interesting features:
A companion banner is used which takes user directly to the official website The Premium Ads takeover the whole screen and the ad in the video is shown in the background of matching skin colour Complete information related to campaigns which will be conducted throughout the year is available beforehand The online guide for various ad formats is in detail and easy to understand
Innovative Ad Formats used by other players - YOUTUBE
Banner Ad Creative Static Display Ads of sponsors
Product Animatio n Ads Ad Creative Ad supported events
Preroll and Midroll ads

Product Animation Ads Ad supplemented with a survey
More than 20 ad spaces sold by YouTube across the 9 types of ad formats on a single page
In context ads

InStream ads and True View ads are the main features Platform for Brand campaigns and ads for SMEs Preroll, Banner, Homepage Display ads, Overlay ads etc. are the main formats available for premium advertisers Pay when video is viewed option for long tail advertisers Other information like help for making video ads, building a brand campaign is available in a highly discoverable manner
Competitor Ad Formats Analysis - Takeaway
Publishers are making advertisers experience

Full of choices More targeted
Easier to implement
Better ROI
Current Scenario @ Yahoo! Screen

Currently
Preroll ads of 30 sec Ads between trailers of same movie of 30 secs Branded Campaigns covering the skin of the player Very few choices to Users and advertisers Even for short form content an ad of 30 sec is shown No data related to the relevancy of an ad for the user
Give more choice to users and advertisers Try to make the ads more relevant for the user Educate advertisers about the new ad formats
Problem
We need to
Ad Format Suggestions for Yahoo! Screen

Parity Achievers
Slate ads with short form content
PreRoll ads reduced to 15 sec or 20 sec length

Companion Banners along with video ads Survey ads in partnership with companies like surveymonkey.com See it Later option like True View Ads in long form content, in which we allow the user to shift the ad further in the video and if he likes the video then only watches the ad Some other formats like Royal Stag Make it Large, in context ads etc.

Game Changers (Innovative ad formats)
Innovative product ads

Game Changers (Innovative ad formats)
Sponsored Video Frames
Buying banner space in video Issues: Permission issues from content provider

Other Formats Mid Roll Ads at logical ends in long form content Ads at the end of the video (Preferable Display Ads) Sponsored special events

The new ad formats help the advertiser by:
Giving him more choices Presenting the same in information in a better manner More targeted advertising
The new ad formats help the publisher by:

Enhancing the advertiser experience and attracting more advertisers Enhancing user engagement by giving more control to them Better utilization of ad space inventory
Analysis of Content (Not in Scope of Project) Analysis of Video Platform
Better online video monetization not only involves better content and ad formats but also involves enhancing capability of video platform which can make watching videos and ads a fun experience for the user.
Suggestions for Yahoo! Screen Video Platform

Capability to source ads as a function of length of video Uniformity of experience across videos Frame preview feature
Reduce time to load a video

Need to improve the search and discoverability of the video inventory Ability to choose quality (HD/Non HD) AutoPlay On/Off and Subtitles On/Off

Introduce timed comments feature and allow users to share a part of a video Allow users to share their comments for a specific part of a video Increases user engagement in long form content by promoting parts of it Sharing a small part of video will increase the users coming to watch a small snippet of video The users coming to watch a small part of video can be monetized by showing a slate ad While giving comments we should allow user to tag his friends in the comments
Source: Soundcloud.com

Promote continued browsing of videos
Recommended Video For You
Suggestions for Increasing User Engagement

Yahoo! Digest to keep user updated about the new additions
All new additions should be updated on Yahoo! Screen Facebook page

Online contests can be held to attract more users Improve the recommendation engines and categories, some interesting categories can be
Recommended for you Friends are watching Watched in your city/state/country
Collecting information about the relevancy of the ad
Suggestions for Other Avenues Of Monetization

User prefer to watch Movies/TV show trailers as ads which we are completely ignoring
Which ad you want to see?
Ad with Generic Ad 0% animation 9%
Presence across the screens is needed, app for mobile and tablet should be released, Yahoo! Axis Platform can be leveraged Short Term: Ad Funded Model Long Term : Freemium Model
User preferred Ad 24%
Movie/ TV show trailer 67%
Suggestions for Other Avenues Of Monetization

Internet TV Huge growth expected Utilize this medium Partnership with DTH providers
In some countries the increase in internet usage has decreased the usage of TV and assuming that the same will be the case in India, a part of ad revenue can be directed from TV to online videos 32% Advertisers are going to cut their TV advertising budget to increase online video ad budget in US
Source : Break Media
Conclusion
The new ad formats and other suggested methods for monetization do not guarantee success but its time that we start experimenting with new modes of monetization and keep on tweaking them to achieve optimum results.

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Online Video Monetization Strategies

Yahoo! Summer Internship Project

5. Video Monetization Strategies

Key Findings New Ad Formats User Engagement Other Monetization Strategies

Key Findings New Ad Formats User Engagement Other Monetization Strategies

Online Video is at an exciting stage, with larger and

for viewers , advertisers and publishers as well

Key Findings New Ad Formats User Engagement Other Monetization Strategies

Two Types : Parity Achievers and Game Changers

Game Changers (Long Term)

Content (Not in Scope of project) Video Platform

Key Findings New Ad Formats User Engagement Other Monetization Strategies

Suggestions for Video Platform

Other Monetization Strategies

Why Online Videos?

Online Videos Site like YouTube, Yahoo!.

Information Aggregators like Yahoo!, AOL etc.

Mid Review Highlights

China India Japan Indonesia South Korea Vietnam

In Jan 2011 in India

9.1 billion Minutes

Units Sold in India (millions)

58 videos per user 5 hours per viewer

8 6 4 2 0 Mobiles Portable PC Desktop Internet TV

2012E 2013E 2014E 2015E

Mid Review Highlights

Ad Spending in India, by media (millions)

Mobile Ad Spend (millions) and growth % in India 247

Internet ad spending to almost double in 2013 from its 2010 levels

$2,000 $1,500 $1,000

$100.00 $128 $166 $214 $273 $50.00

Huge growth expected in mobile ad spend

$0 2010 2011 2012E 2013E

$0.00 2009 2010

2011 2012E 2013E 2014E 2015E

Mobile Ad Spend by Category in US

Video Ad Spend in Mobile in India as per US market distributions (millions)

15.20 15.00 10.00 5.22 5.00

Banners And Rich Media

Mid Review Highlights

Competitors in India UGC

News Channels Sports Channels TV Channels

Play has been launched in US

Total Unique Viewers (000)

Minutes per Viewer

Jan 2011 Rankings

The biggest issue with Yahoo! Is low user engagement

Mid Review Highlights

Mid Review Highlights

After Mid Review

Analysis of User experience

Other Monetization strategies

Analysis of the content available Analysis of the video platform

Roadmap After Mid Review

Analysis of Advertiser Experience Analysis of User Experience Other Monetization Strategies

Analysis of Advertiser Experience Analysis of User Experience Other Monetization Strategies

Advertiser Experience Enhancement

Video Monetization Strategies

Analysis of Advertiser Experience Analysis of User Experience Other Monetization Strategies