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Digital Video Overview
What Every Marketer Should Know

December 2008
USA // Atlanta Boston Chicago Dallas Los Angeles New York San Francisco
Agenda
• Address the New Model
• Define the Options
• Understand the Audience
• Review the Video Content
• Results
• Implications & Best Practices
The New(er) Model: On-Demand
New Reality
Consumers have more control
We must move from exposure

to ENGAGEMENT
5
Milestones: Game Changing Events in Online Video

The Slingbox allows you
to watch your home TV Web video
on any Internet-enabled device. content
migrates to
TV
Relaunches in 2006 as a
video-sharing site,
a la YouTube YouTube limits video clips to
10 mins in order to combat TiVo offers Internet video
piracy. Users respond by service, featuring content
breaking episodic content from the NYT, NBA,
Initial launch of into segmented clips. and iVillage.
Yahoo! Video
5/05 6/05 10/05 3/06 4/06 6/06
Nielsen adds
VOD to their ratings First ever non-traditional
platform Emmy awarded
to Live 8 on AOL.
Apple sells TV shows
iTunes 4.8 offers video
for $1.99 (ABC/Disney)
"This throws the shackles off

Users buzz about a the
of the definition of what
future possibility of a video- 1,000,000 videos sold TV has been." –Tom O’Neil,
enabled iPod in first 12 days author of book “The Emmys”
The Old Way of TV Distribution
CONTENT DISTRIBUTION DEVICE
2004 a. New Programs a. Networks & Affiliates

TV w/ DVR or VCR
b. Syndication b. Cable Networks & MSO
Fewer choices for content

Scheduled
Linear
Distributor-Centric
The New Way… IP Delivered, On-Demand
CONTENT DISTRIBUTION DEVICE
a. New Programs a. Online – iTunes a. TV w/ DVR

b. Syndication b. Online – Aggregator b. Networked TV
c. Game Industry c. Online – ISP’s c. Computer
2008 d. Movie Industry d. Mobile d. Cell Phone
e. Music Industry e. Networked distribution e. PSP
f. General Publishers f. Wireless data system f. iPod
g. Consumer-generated g. Direct to consumer
Unlimited content choice

Multiple distributors
On demand
Consumer-Centric
The State of Television
Today:
Jim Stengel,
CMO, P&G:
– While the average US
household has 96.4 TV
channel choices, the
average viewer watches
only 15.4*
“Inclutter
– Ad 1965, has80% of 18-49
increased year-olds in
– the US
Ratings could
have droppedbe reached with three
–
60-second
Fewer than 10% of
TV spots. In 2002, it
required
consumers 117
say thatprime-time
television ads influence
commercials
their to do the same.”
purchase decisions** Source: *Nielsen Media Research, 2006
**Forrester Research, 2006
Multi-Platform Messaging
• The TV360 model surrounds consumers with your brand in two

highly complementary environments
Television Provides: Digital Video Adds:


Unparalleled reach
Broad scale
+ 

Lean-forward environment
Direct link to brand, continuing consumer
conversation
 Deep inventory
 Uncluttered, yet limited inventory
 One-way, multi-touch consumer
relationship  One-to-one consumer relationship
 Large screen, high-quality messaging  Video + interactivity & custom creative
 elements
Viewer loyalty & engagement
 Real-time campaign performance,
opportunity to track & optimize
 Additional engagement—users virally sharing
great content with friends
The US Ranking
Spend Projections
Defining the Digital Video Options
What is Digital Video?
• IP-delivered video content

– Through the internet
– Potentially compatible with a range of devices
– On-demand
– Degrees of interactivity
• Majority of online video made up of

– In-stream Video
– In-banner video
What is In-Stream Video?
• An online streaming video experience similar
to linear TV models that can offer
• Pre-roll creative runs prior to user requested
content
– Also available in mid-roll and post roll format 15 OR 30 SECOND SPOT
• Coupled with a companion ad unit
(standard or rich media banner) that
adds interactive functionality
• Commercial cannot be fast forwarded
• Sold on impressions, not GRPs
• Commercials run one per pod
What is In-Banner Video?
• Full motion video advertisement

• Ad plays unobtrusively until clicked on/sound
enabled
• Can use existing creative
• Expandable viewing window
• DR capabilities/clickable for more
information/retail locations/calls to action
• Interstitial ads: Commercial video appears
in same browser window between web
page loads
A Handy Reference
Advertising Examples
Advertising Examples
19
A Hyper-fragmented Video Landscape

Only 50% of streams come from top 10
sites
28% of the views come from

YouTube
Sources: ComScore 11/30/07 Press Release, Willvideoforfood.com
In-Stream Video: Pros/Cons
Pros Cons
• Extends TV reach and ability to penetrate at-
work audience • It’s still just a commercial
• Reaches captive audience awaiting desired • Limited targeting (compared to other online tactics)
content
• Like TV, delivers impact with sight, sound • Inventory is limited

and motion
• Costly CPMS
• Clutter free environment
• Allows for higher composition media buy • 3rd party ad serving not always supported
(where available)
• Allows for interactivity via companion units • Video Ad length effectiveness not well understood
• Delivers measurable results • Reporting discrepancies
• Online buying not similar to TV buying
• Many different video ad products available
• Different video player technologies
• Attribution of metrics and viewers

Marketing Opportunities
Industry Examples
22
Marketing Opportunities: Tiered Levels of

Involvement
Like most other forms of advertising marketers can participate at
varying
levels within online video marketing
Low Involvement
• “Traditional” advertising within Video Sites (i.e. banners, logo
placement)
• In-Video Overlays (small ad banner that pops up on bottom of video
player while content plays)
Medium Involvement
• Exclusive internet produced spots to be included in ad campaign or
seeded within video sites
• Includes pre-roll placement
• Relevant or irreverent (viral) content is encouraged
High Involvement
• Content creation– create
USA //content that
Atlanta Boston lives
Chicago in Los
Dallas specific branded
Angeles New York San Francisco
23
Low Involvement
Adobe’s sponsors Metacafe’s Director’s Cut
Adobe sponsored a featured

channel produced by Metacafe,
showcasing original video that
honors the craft of filmmaking.
Sponsorship includes call out on
features section on homepage,
logo sponsorship with in
Director’s Cut Channel, co
branded media throughout the
site.
24
Medium Involvement
Pfizer Consumer Healthcare
Purchased pre-roll video inventory

before quality video content on top
sites which scored high among the
target audiences and were
contextually relevant
Furthered the broadband video

experience by expanding PCH’s brand
messages to an interactive
companion banner that provided the
user with valuable product
information, games, coupons, etc.
25
High Involvement
Schick: Girl’s Guide to Dating
• A custom microsite was built for Schick Quattro
for Women by Match.com in conjunction with
Schick’s creative agency and Carat
• Match.com hired an actress and to play the role of
‘Juliette’ – a Dating Guide and filmed her giving
tips (scripted in advance with Schick’s approval)
• The role of ‘Juliette’ in the Girls Guide to Dating
microsite was to make navigating the site fun and
to provide a human element throughout the
microsite
• ‘Juliette’ was present across the website and gave
users Dating Advice, First Date Tips, and Tips on
Relationships
• In addition to this, other videos were present such
as: humorous dating scenarios with Juliette
interjecting and providing advice
• In its first month, this site received 3.8MM hits
visit www.girlsguidetodating.c
TV360
(TV + Online)
TV360 | Benefits
• Incremental Reach 
  
Adding Online to a TV program delivers a whole
 
  + 

new set of highly engaged consumers
• Segmenting the Funnel

Television’s broad reach fills the marketing funnel and Online’s
targeting and interactivity push consumers through to purchase
• Enhanced Results
Adding Online increases brand metrics lift by 15-45%
TV 360 | Example
Video
Broadcast + .com + Streams + Syndication + Partners
Internet Dominates the Purchase Process
Understanding the Audience
Who’s watching this stuff anyway?
BB Access at Critical Mass
Broadband Users: Home

(millions)
The Broadband Effect
• Time spent online increases dramatically for broadband users
• Broadband users are much more likely to bank online, and to research
financial products and services online
Time Spent Online
15.8 15.7
12.4 hours hours
10.7 hours
hours 9.1
7.5 7.6 8.1
hours hours
hours hours
W18-49 W25-54 M18-49 M25-54

Dial-up Broadband
Source: Knowledge Networks, Inc., MediaScan Fall 2002
33
The Raw Numbers

Online video viewing has reached its tipping point
• 62% (114 MM) of Online Users are viewing

online video Expected to increase 86.6% (183MM) by 2011
Over 40% watch online videos, at least, on a

weekly basis 24% watch several times a week
Currently, Men slightly outnumber Women, 71% to 64%

Young affluent men are the most frequent online video viewers
Viewers 28-34 are the most “active” online video

viewers Popular activities include creating and posting content
$410 MM spent on US online video advertising in

2006 Reached 47% (88 MM) online video viewers
Source: eMarketer, August 2007 “Online Video: Making Content Pay”
Internet Video Continues To Grow
Internet Users and Percent Who Stream
Source: comScore Video Metrix, April 2007, U.S. Audience

In-Stream Video Audience is Diverse too
Source: Arbitron/Edison Media research Internet and Multimedia 2005: the on-Demand
Media Consumer USA // Atlanta Boston Chicago Dallas Los Angeles New York San Francisco
Viewing Frequency
Internet Video “Primetime” Is Actually Early Fringe
Average Number of Streamers – By Weekday Hour and

Audience
Source: comScore Video Metrix, April 2007, U.S. Audience

Why They Watch
39
Consumer Tolerance
Overall consumers accept that

advertising is a fair way for
publishers to supplement costs and
offer free content
40
Benchmarking: Consumers View 63%+ of a Video Ad

Message
Consumers watch on average 19 sec of a 30 sec video, and 10 sec of a 15 sec video
Video View Time by Vertical for 30 sec & 15 sec videos

Video View Time (seconds)
21.4
18.5 19.1
9.8 10.3
Entertainment Consumer Overall
Video View Time 30 sec Video View Time 15 sec
Source: DoubleClick Rich Media and Video (Klipmart) campaign benchmarks, 30 and 15 second ads only, June-
Sept. 2006
The “Engaged Viewer”
Reviewing the Content
What are they watching?
What Type of Video Content is Accessible?
Since early 2005, broadband video inventory has exploded

Inventory available on leading news, health, lifestyle, and entertainment sites
Four Types of Content
• Repurposed Content
• Original Content
• Syndicated Content
• User-Generated Content
48
What is Everyone Watching?

News, Weather and “Entertainment”
• 45% view news at least weekly
• Movie trailers drive a high share of female viewers: 47% vs. 35% of men*
• Men prefer amateur videos over women, 44% to 30%*; However women
frequently watch “user-created” from trusted communities (e.g., baby home
videos)
Source: Online Publishers Association, “Online Video Advertising, Content *eMarketer “Women Online: Taking a new
and Consumer Behavior: June 2007; look”, March 2007
What and Where
50
Key Video Destinations – What about TV Networks?

TV Network websites are indeed gaining
momentum
• Individually it’s hard for them to compete
in terms of share of visits, however as a
cluster they make a significant dent
• When scaled by gender, TV networks
actually are taking the lead for the #1
destination for women, just ahead
YouTube 47.8% vs. 47.7%
• NBC leads the broadcast networks at 37%
share of visits, followed by ABC with 30%
share*
News sites such as CNN.com are also

significant
*•Hitwise,
35% April
total share
2007 vs.
, **Harris PollYouTube
Jan with 42% and
TV networks with 41%**
2007
Delivering Results
52
Benchmarking: In-stream CTRs Higher than In-

Banner Units
Click-through Rate by Format
1.40%
Click-through Rate
0.74%
0.47%
0.40%
floater * in-stream expandable standard
* Note: It is DoubleClick’s supposition that the high click-rates on the floater format is due in significant part
to consumers attempting to close the units and missing the close box.
Source: DoubleClick Rich Media and Video (Klipmart) campaign benchmarks, on-page plus in-stream ads, June-Sept. 2006
Causing Action
Benefits to Marketers
Qualitative Effects
Performance by Format
Performance by Frequency
Enhanced Results
• The TV360 model delivers impact beyond what either medium can
deliver alone Online Only TV Only TV 360
16.8% 16.6%
14.1%
13.3%
11.8% 11.7%
11.4%
10.7% 11.0%
8.5%
4.7% 5.0%
Aided Brand Awareness Ad Awareness Brand Favorability Purchase Intent
Online Only TV Only TV 360 Lift vs. Control

16.8 16.6
14.1
13.3
11.8 11.7
11.4
10.7 11.0
Source: NBCU Dynamic Logic Cross Media studies (average of 9 brands)

USA // Atlanta Boston Chicago
8.5 Dallas Los Angeles New York San Francisco
Implications & Best Practices
A Shift in Planning
• Advertisers need to plan for shifts in on-demand media habits

– Young adults and affluent Americans are most engaged by on-demand media
devices and behaviors
– Consumers’ desire to control their media use continues to spread
• Traditional media outlets need to incorporate the on-demand media

lifestyle into their programming decisions
• Internet advertising needs to expand beyond banners, search and pop-

ups
Source: Arbitron/Edison Media research Internet and Multimedia 2005: the on-Demand
Media Consumer
A Shift in Video Creative
• Marketers need to consider the potentially disruptive nature of video
placements and tune content to web constraints
– Optimize the quality and composition of their creative for web delivery
– Be conscious of Codec compression and video file size implications on streaming
speeds and picture output quality
– Images and scenes need to be simple and uncluttered to best be interpreted within
small screen spaces
– Elaborate lighting effects and excessive panning, zooming, and camera movement
should be minimized to avoid pixelation or blurring
– Editing transitions, such as long cross fades and dissolves, should be avoided
– Overly complex audio, such as ambient noise and peaking above normal audio
levels, may be difficult to decipher through PC speakers
– Text should be placed in space surrounding video so that viewers can clearly read
taglines and calls to action
Source: Online Video Advertising, Jupiter Research, 2005
A Shift in Metrics
• Planning
– Reach and composition into psychographic audience, not just demo
• Example: “Adults who have researched purchasing new compact cars in the past
six months”, instead of “M25-34”
– Ability to deliver engaging user experience, not GRPs
• Delivery
– Impressions counted upon user initiation of the stream, time spent watching ad, and
interaction rates with companion ad units, instead of program ratings
Best Practices | Creative Variety
• Brand Recall
– Number of creative executions had no significant effect on recall
• Brand Attributes
– 3+ creatives had a positive impact on brand attributes vs. 1-2 creatives; 3+
creatives seen as less repetitive & annoying and more entertaining
• Among those viewing 1 creative, :30s were more likely to be seen as repetitive
and annoying vs. :15s
– The threshold for repetitiveness and entertainment is 3+, while annoyance
begins to decline at 2+ creatives
% of Respondents who Agree 1 2 3+

Creative Creative Creative
Was Repetitive 74% 76% 65%
Was Annoying 45% 43% 40%
Was Entertaining 26% 27% 31%
Best Practices | Interactivity
• Brand Recall
– Among ads with branded canvases, those with complex
interactivity (e.g. playing games) generated significantly higher
recall than ads with simple interactivity (e.g. choosing your ad)
• Brand Attributes
– Ads with branded canvases (vs. those without) were more likely to
be seen as entertaining and less likely to be seen as repetitive
• Respondents viewing ads with branded canvases were also
more likely to rate their experience on the NBC.com video
player excellent/very good
– Respondents exposed to ads with more complex interactivity were
more likely to agree that the ads:
• Caught their attention
• Made them want to know about the brand
• Were better than advertising in other full episode players
Best Practices | Ad Content
• Think Advertainment, not Advertisement
– Viewers are more open to enjoying the advertisements. Give them what they
want by creating ads that are entertaining as the video clips with which they are
paired. Make the advertising a part of this engagement by telling compelling
stories rather than repeating TV spots.
• Shoot more video
• Be more creative
• Active mindset equals greater action
– People who watch long form video content are more engaged with every aspect
of the experience, including the advertising. This implies that viewers that sit
down to watch a one minute clip come to the screen with different mindsets.
Consider having multiple creative units depending on the mindset of the watcher.
• Use all the units on the page as a team
– Advertising can be annoying, but it doesn’t have to be. Viewers respond to ad
formats that don’t intrude unfairly. The preference for banner ads supports this,
but banner ads can be supported by a comprehensive ad experience that ties
display ads, sponsorships, and in-video ads together in a coherent package.
• Be mindful of advertising length!
Questions?
Comments?
Sarcastic Remarks?

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Digital Video Overview

What Every Marketer Should Know

• Define the Options

• Understand the Audience

• Review the Video Content

• Implications & Best Practices

Consumers have more control

We must move from exposure

Milestones: Game Changing Events in Online Video

5/05 6/05 10/05 3/06 4/06 6/06

"This throws the shackles off

CONTENT DISTRIBUTION DEVICE

2004 a. New Programs a. Networks & Affiliates

Fewer choices for content

CONTENT DISTRIBUTION DEVICE

a. New Programs a. Online – iTunes a. TV w/ DVR

Unlimited content choice

• The TV360 model surrounds consumers with your brand in two

Television Provides: Digital Video Adds:

• IP-delivered video content

• Majority of online video made up of

• Full motion video advertisement

A Hyper-fragmented Video Landscape

28% of the views come from

Sources: ComScore 11/30/07 Press Release, Willvideoforfood.com

• Like TV, delivers impact with sight, sound • Inventory is limited

• Delivers measurable results • Reporting discrepancies

• Online buying not similar to TV buying

• Many different video ad products available

• Different video player technologies

• Attribution of metrics and viewers

Marketing Opportunities: Tiered Levels of

Adobe sponsored a featured

Purchased pre-roll video inventory

Furthered the broadband video

• Segmenting the Funnel

Broadband Users: Home

Time Spent Online

W18-49 W25-54 M18-49 M25-54

The Raw Numbers

• 62% (114 MM) of Online Users are viewing

Over 40% watch online videos, at least, on a

Currently, Men slightly outnumber Women, 71% to 64%

Viewers 28-34 are the most “active” online video

$410 MM spent on US online video advertising in

Source: eMarketer, August 2007 “Online Video: Making Content Pay”

Internet Users and Percent Who Stream

Source: comScore Video Metrix, April 2007, U.S. Audience

Average Number of Streamers – By Weekday Hour and

Source: comScore Video Metrix, April 2007, U.S. Audience

Overall consumers accept that

Benchmarking: Consumers View 63%+ of a Video Ad

Video View Time by Vertical for 30 sec & 15 sec videos

Entertainment Consumer Overall

Video View Time 30 sec Video View Time 15 sec

Since early 2005, broadband video inventory has exploded

What is Everyone Watching?

Key Video Destinations – What about TV Networks?

News sites such as CNN.com are also

Benchmarking: In-stream CTRs Higher than In-

floater * in-stream expandable standard

Aided Brand Awareness Ad Awareness Brand Favorability Purchase Intent