White Paper by Benjamin McKean_86020

V-commerce: The rise of online video

ABOUT ADJUST YOUR SETTM WHY VIDEO? INTELLIGENT CONTENT CASE STUDY – M&S TV ONLINE VIDEO PLATFORMS MEASURABLE ROI CONCLUSION

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aBout Adjust your set

Adjust Your Set is a pioneer of brand television for the web. Throwing the old agency structure out of the window when the company was founded in January 2008, Adjust Your Set is a new breed of agency that counts the likes of Marks & Spencer, Thomas Pink, Sotheby’s, The Royal Opera House and lastminute.com among its customers. Adjust Your Set is a full service video agency specialising in what we call ‘v-commerce’ – multiplatform video with high production values that drives brand awareness, customer engagement and revenue for brands.

Details

All online video channels featured in this white paper were conceived, designed and built by Adjust Your Set. All content creation, strategic direction and ongoing management of these players is also handled by Adjust Your Set. Copyright © Adjust Your Set 2010

The agency provides an end-to-end service including brand, consumer and technical strategy; design and build of bespoke players; conception, creation, production, distribution and syndication of content; channel management, analytics and technical support, as well as e-commerce integration. The team is a powerhouse of skilled specialists from each corner of the industry with directors, producers, brand strategists, creatives, writers, designers, developers, programmers, digital strategists and account management.

Adjust Your Set closes the gap between content, the call-to-action and the action itself. Here are a few links to some of our work: www.marksandspencer.com/tv www.thomaspink.com/tv www.lastminute.com/tv www.roh.org.uk/video For more information: www.adjustyourset.tv E-mail: info@adjustyourset.tv Follow us on twitter @adjustyourset

Why Video? As the internet gets increasingly crowded, brands are searching for new methods to differentiate themselves and increase consumer awareness of, and engagement with, their offerings. Social media, affiliate models and SEO are among the ways being used to attract and keep the attention of consumers. But the most important and fastest growing of these mediums is online video. The rise of broadband connectivity has caused the web to shift from being a largely static entity, to one where video has emerged as a pervasive means for communicating to customers online. Video-commerce, or “v-commerce,” as opposed to e-commerce, will become part of common marketing parlance in 2010, so any company wanting to connect in a significant

way with an audience should be investing in video. According to Comscore, brands using online video have seen lifts of anywhere from 20%-40% in terms of incremental buying. It is undisputed that the web is a significant driver of influence over people’s behaviour, whether for a political campaign, a charitable cause or a brand message. Of all the tools available to influence behaviour, video is ranked near the top for mass market communications. So if video is such a brilliant communication device, why is it not more ubiquitous on retail sites? The answer lies both in the way it is currently perceived, and the way it is currently used. At present online video is

largely perceived as an expensive stand-alone piece of content to be inserted into a website, with that content often originating from TV ads. To create compelling online video, an entirely new set of narrative rules should be followed for a more interactive, accessible and sticky type of content that can have high production values while at the same time still be highly cost effective to produce. One of the most powerful aspects of the internet is its ability to connect huge groups of people in shared experiences. How to successfully monetise this experience is still perceived as a black art, but video presents opportunities to do so.

Intelligent Content Developing content for online involves using a selection of editorial/narrative production techniques, as well as taking functional and technical aspects into consideration. What is required is content that achieves engagement with the viewer on a deep level. At Adjust Your Set we call this ‘Intelligent Content,’ because it contains data that allows content to be delivered over a variety of sites and platforms, and has built in calls-to-action that generate a response in the viewer. Online video allows this bundling of creativity and technology together in a package that

appeals to viewers, and makes it a compelling proposition for marketers. Intelligent Content is in its infancy, but there are three defined genres of formats evolving. Each of these is aimed at generating a specific consumer response along the customer value chain, ultimately ending up in a conversion. Adjust Your Set has dubbed these the Acknowledgement Layer, the Engagement Layer and the Conversion Layer. Content aimed primarily at brand building – The Acknowledgement Layer

Lastminute.com buy buttons Here is an example from lastminute.com showing the interactive buy buttons wrapped around the content to boost clicks to purchase pages.

Content aimed primarily at customer engagement – The Engagement Layer Content aimed primarily at driving sales – The Conversion Layer Each of these types or ‘layers’ requires a unique set of creative, functional and technical treatments in order to deliver on its core functions. As the online video industry matures, specific content formats will increase exponentially.

Intelligent Content The Acknowledgement Layer - Brand Building Content that is specifically about brand building that can be used both on a marketers own site but also can be easily syndicated to third parties. Designed to build brand equity online, this layer seeks to connect with the consumer on an introductory level. In its purest form, this content sits very much in the sphere of marketers rather than e-commerce professionals, but is a crucial driver to the more product-focused sections of a website. It tends to be tied in with broader marketing themes such as corporate heritage or cross-channel marketing themes, and is shot using the highest production values. It is well thought out in terms of the brand story and the desired effect on the user. The content is widely distributed over multiple syndication points - viral activity could be included in this category. It is also the closest to a traditional TV ad; however the production process can be quite different. The content consists of a range of short films, usually

about two to four minutes long, which over time develop a conversation with the consumer. The other difference between this type of content and traditional TV spots is in cost - it is possible to shoot as many as 40 short films around a particular theme for the price of a single 30-second TV ad. And, by distributing online the media costs are significantly lower or even free. Once engaged, the audience can then be encouraged to get more deeply involved with the brand and dive further into what it has to offer. For example, a brand could sponsor a major music event, but rather than simply invite people to the event, it could broadcast the gig live via its own website. The brand would be building equity in terms of consumer loyalty. Taking the example of O2, the brand already provides access to concerts for customers via a priority pass system. It would be relatively easy then, for the channel to offer online concerts to all customers, by allowing those who can’t get to the concert exclusive

access to the live experience via an ownbranded O2 channel. This idea harks back to the 50’s when major consumer brands actually had their own TV production units, like P&G, which originally created the soap opera. There will be a growth of specially commissioned and sponsored programming, by brands showing this content via their own online media channels, in order to capture and own the relationship with the audience. A good example of this is the success seen by Ikea’s “Easy to Assemble” strand of programming (www.easytoassemble.tv) that regularly garners more than six million views for each episode. Without a doubt, it is all about capturing the hearts and minds of the consumer in order to develop a conversation. Once that conversation has begun, the consumer can then move into the next layer of the journey where they become far more engaged with the brand. This is called the “Engagement Layer”.

Intelligent Content The Engagement Layer At this point the user recognises the importance of the brand to their daily life, and through involvement with the brand they gain recognition from their peers. This layer is involved with both building audiences, and building enough influence to start the process of directly connecting those audiences with a purchase. The content works particularly well when it promotes social value in the brand. By encouraging viewers to engage with the stories beyond the corporate face and involve them in something meaningful, it also has the ability to raise their profile amongst their peers. So this content sits particularly well within social media websites. Popular videos found in this layer include “how to guides”, as seen below and on Thomas Pink’s site, e.g. ‘how to tie a Windsor Knot’ (www.thomaspink.

com/tv). This type of content works extremely well online as it imparts information of value, which in turn increases the likelihood of people sharing it with others in their network. Other videos found on the site include ‘how to iron a shirt’ and ‘the history of Jermyn St’ which is the famous street in London full of tailors, with text written by the author William Boyd. Consumers can satisfy their own interest on a topic while gaining a better understanding of the quality of the brand. By sharing this content amongst their peers they raise their social value, courtesy of the brand. This builds loyalty and will convert customers into brand ambassadors. The types of formats currently being developed to help engage consumers in this way include: How to guides and tips and tricks

Thomas Pink how to guide Here is a screen shot from Thomas Pink’s “how to guides” showing an example of how to tie a Windsor Knot.

Ask the experts Popular opinions Humorous stories It is worth noting here that all of the above have been hugely popular on the web since its inception, but it’s usually been consumers generating the content, not brands. You can expect to see significant growth in this layer very quickly as online video grows in importance, and as brands continue to adopt the methods of media businesses in order to deepen engagement with consumers and keep them coming back for more. Through careful integration of interactivity around this content, it can be used to drive significant click-throughs to the next layer, which is where final conversion occurs.

Intelligent Content The Conversion Layer The Conversion Layer is the point at which the consumer actually gets involved in the v-commerce process by clicking through to product-specific content, which is highly focused on showing the product in the best possible light. It provides only one function, and that is to allow customers to make an informed purchase decision. It comes with a range of additional functionality such as “add to basket,” 360° views, user comments and ratings, all aimed at enhancing the buying process. These videos are the cheapest to produce, the shortest in length, and for most major retailers, the largest in volume. They are highly integrated into the retailers’ website including comments and ratings, stock levels, product information feeds, viral distribution tools, cross-sell and up-sell related videos, and ‘add to basket’ functionality.

The kind of content formats used to deliver this experience include: 360° views of product Detailed product specifications Assembly instructions Customer service videos (returns policy, FAQs etc) Related cross-sells and up-sells Testimonials (customer endorsements) Buying instructions

Thomas Pink e-commerce Here is an example of an e-commerce page with a product detail video pop up designed to provide greater clarity around the product to help boost conversions and reduce returns.

Product specific content is generally the easiest to produce and the most cost effective, but this can scale with the unit costs of the item. For example, a car may well have a significantly higher budget spent per film as the unit costs far outweigh the additional budget required. In order to produce effectively it is important that exceptionally well-defined processes are in place to make sure that content can be filmed quickly and efficiently, as well as loaded onto a system capable of handling large volumes with minimum fuss. This is particularly true for retail, where products can come in and out of warehouses at incredible rates, so it is crucial to have fast turn-round filming methods while maintaining high quality.

Acknowledgement layer In order to produce impactful video there are a number of considerations to be taken into account, not just in the creative execution but the technical ones too. The main areas of consideration when producing intelligent content are as follows: The creative treatment The production quality

Identify the big stories about the brand

High production values

Key messaging & company-wide themes

Low level calls to action

Wide syndication to major web detinations

High volume traffic

Wide syndication to major web detinations

High-value professional cast & crew

Mainstream media partners & web portals

Intergration to third-party distribution services

Recall

HD camera filming

Email boxes & ad networks

Widgets

Returns to main site & brand reputation

Multi-camera shoots

Multi-bit streaming for high-quality playback

Advanced analytics for distribution reporting

Outdoor locations & studio facilities

Manual playlists

£££

The distribution pathways The technical environment The metrics to be measured Here follows a breakdown as to how these considerations are applied within the three engagement layers outlined earlier.

Ad servers & direct email products

Production considerations

Acknowledgement content tends to be the most expensive to produce, can often be widely syndicated to multiple platforms, and has generally low interactivity but maximum reach. It also benefits most from broadcast standard production values where possible. While it is better if this content is shot bespoke for the web, brands will often substitute made-for-TV ads here, but distribute them online rather than on TV alone. Copyright © Adjust Your Set 2010

Multi-platform distribution (outdoor, internet, mobile phone, TV etc)

engagement layer Interrogate the product to find the stories within

High-mid production values

Create films that generate social value in the user & promote conversation

Mixture of professional & non professional (i.e. staff & customers)

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Mid level calls to action

Production considerations

This content is in the mid-price range to produce, and what distinguishes it from the other layers is that it is largely concerned with generating activity online, engaging users within social networks, influencing consumer behaviour and encouraging those consumers to interact in some way. Copyright ÂŠ Adjust Your Set 2010

Focused distribution to website, social sites & big branded content

Intergrated click-to-buy & other interactive functions

Engagement metrics

Deep linking of content

Reach analytics

Dynamic playlists

Number of clicks to product pages

Syndication tools, alongside links to Twitter & Facebook etc

Related videos and customer journey analysis

Conversion layer Product-focussed

Mid-low production values

360° views & close-ups

Heavily automated, rapid turn-around

E-commerce functionality

Products sold

Comments

Products returned

Audio descriptions

Ratings

Quality of comments

Product demonstrations

Sharing tools (e.g. code, email a friend, send link etc)

Related products

Cross-sell & up-sell tools

Mainly on retailers’ own site

Aftercare

Production considerations

This content is generally the lowest cost to produce and for many retailers involves high-volume production-line techniques. Often formats for the products will be defined beforehand, in order to impart the most information to the consumer while filming in the most automated way. This is all about helping the consumer reach an informed decision to allow them to buy something they really want, and reducing returns due to dissatisfaction. Copyright © Adjust Your Set 2010

Case study - M&S TV Background Marks and Spencer is a pioneer of online video through its video channel ‘M&S TV’ (www.marksandspencer.com/tv) - a great example of v-commerce in practice and proof positive that compelling online video increases sales. One year old in March 2010, M&S TV is delivering a new form of customer engagement, resulting in longer dwell times repeat site visits and a significant uplift in conversions. Objectives M&S is known for its innovative online approach and with online predicted to plateau in growth over the coming years, the retailer was keen to find ways of growing its online business while retaining the customers already visiting the site. In addition to enhancing the experience, the channel had to ultimately drive sales.

M&S TV was launched with a range of objectives including: Raise the level of customer engagement

Provide a deep range of content to the consumer that informs, educates and entertains

Provide an elevated customer experience by raising the level of information available around key product ranges

The Solution

Allow deeper insight into the company’s social and environmental responsibility programme, Plan A Streamline the shopping experience through

A screen shot of one of the M&S videos of Dannii Minogue with related videos shown along the bottom of the screen.

Raise awareness of the brand beyond www.marksandspencer.com

Illustrate the hidden stories beyond the shop floor, for example interviewing the people responsible for making M&S cakes, or the farmer who supplies the company with milk

M&S TV related videos

sympathetic integration of e-commerce tools

Increase sales

M&S TV is a collection of over 500 films divided into 12 channels. Each channel focuses on a particular company theme or business vertical. To maintain brand consistency, the channels are managed by a central commissioning team with staff from both M&S and Adjust Your Set. This team also plans future content and measures consumer response.

Case study - M&S TV The films tend to be under two minutes long, in order to fit the consumption patterns associated with branded channels. In order to maximise engagement and conversions, links are weaved throughout the editorial, and displayed prominently next to the player. Engagement levels are constantly measured, and regular refinements are made in order to improve the quality of the editorial and the rates of conversion. For example, if the channel manager sees that users are dropping off significantly within the first 10 seconds, the content will be examined in order to understand why this may occur. Similarly if viewers are dropping off before the end, or certain links are not being clicked, then further changes are made. The type of programming that works best on M&S TV draws the viewer in to the experience and encourages them to interact with

the site, rather than simply sitting back and watching passively. To do this, the editorial style of content production for M&S TV is more akin to “visual radio” rather than “TV on the web.” Visual radio adopts many of the broadcast techniques of radio but with added pictures and clickable elements. Radio DJs are always encouraging listeners to send in emails or phone in or text for a competition etc. The language used is highly inclusive and all about interaction, drawing the listener in and painting pictures with words. Increasingly this style is crossing over to TV, in particular on news bulletins when users are asked to send in their opinions or pictures/videos of a particular story. M&S TV uses those same techniques, but instead of telling people to click, interaction is driven via

visible cues, delivered by the appearance of clickable links next to the video. This closes the gap between the call-to-action and the reaction, driving a significant increase in conversions without detracting from the quality of the content. For particularly busy periods such as Christmas 2009, a range of clips shot for M&S TV were re-packaged into pre-roll ad placements, and targeted to online media titles frequented by the M&S audience including The Sun, GMTV, BSKYB, Hello and so on. This process turned these publishers into a point of mass syndication, further extending the reach of the brand. Click-through from these bespoke ads effectively shot specifically for online achieved rates of over 5%, which is up to five times the industry average for pre-roll.

M&S TV Home & click-to-buy Left: Close-up of the M&S TV homepage Right: Video player with integrated click-to- buy buttons to the right of the player

Case study - M&S TV Finally, in order to start the conversations within social media networks, M&S TV developed a strippeddown version of its video player, complete with clickto-buy links that users could embed directly onto their Facebook pages. Customers can view content as a shared experience amongst their peers, discuss what they like and don’t like, and even click-through to the M&S purchase pages from within Facebook. In the future, M&S hopes to get more involved in community shopping initiatives online, as it is a great way to work with customers to deliver the right kind of products in the right way.

Results

visiting the site alone

One year on M&S TV has been a huge success. More than three million minutes of content have been viewed, and delivered the following results:

Up to twice as long dwell time for customers who watch M&S TV as those who don’t

Three times as many product views when supported with video

In order to explain this in more detail we have created a film that illustrates many of the points mentioned above. To watch, please visit the following page of the Adjust Your Set website:

Up to twice as many repeat visits by customers who watched M&S TV as opposed to those

M&S TV Facebook This image shows the stripped down player designed specifically for syndication, fully complete with click-to-buy links and embedded into Facebook.

Average uplift in basket size: 23%

www.adjustyourset.tv/case-studies/marks-and-spencer

online video platforms With a strategy in place and a plan for how you want to create and use online video, you need to address the key challenges around publishing, distributing and monitoring your video content. Today, there are many options available to integrate online video into a website, including solutions that organisations build in-house, or simply posting video content to a destination site like YouTube. YouTube is an extremely powerful and effective means for generating awareness around an organisation’s video content, but it is much less effective in delivering a true in-shop experience. On the flipside, organisations that build their own solutions for publishing and managing their video content often underestimate the complexity and reliability issues associated with running an effective video business. To stay ahead of the fast-changing online video landscape, in-house solutions also require a continual technology refresh and staff training as the industry develops. Many e-retail organisations and their agencies are instead choosing to develop their v-commerce initiatives on top of a proven online video platform, such as Brightcove, which provide on-demand systems with all of the capabilities required for

simplifying the managing, publishing, distributing and measuring of high-quality online video across the web, internet-connected TVs and mobile devices. By removing much of the underlying technological complexity to delivering online video the platform allows customers to focus on the important aspects of the service such as developing, managing and measuring compelling customer experiences. The online video platform you select should have the following capabilities: Streamline the upload and management of online video content easily – whether you have a few video clips or thousands of full episodes, online video platforms help you upload, manage, and organize your entire media library Create and publish players customised to the specific needs of your site and your brand – take control of the viewer experience and develop bespoke experiences to let your brand shine through.

Enable viral sharing and distribution to build community around your content – find new viewers and expand your reach by delivering your video through social networks and 3rdparty sites. Provide analytics that allow you to monitor and optimize video initiatives – identify your best content and discover audience behaviour with comprehensive built-in analytics and reports Deliver high quality user experiences and a highly-reliable service – protect your content while ensuring the best possible quality across every device and bandwidth profile. Distribution and Syndication As the volume and demographic profile of the people who access online video changes, organisations should experiment with a variety of online distribution strategies. To develop a video distribution strategy that fits your vcommerce goals, it is essential to fully understand the range of options available.

online video platforms Viral Distribution – The most open form of online video distribution. You can allow viewers to publish content anywhere on the web by acquiring a publishing code, sharing via email, or posting directly to a blog or social network like Facebook. The key benefit of this strategy is to increase the velocity at which your content is shared and discovered online by viewers, who can then be easily drawn back to your own website. Managed Syndication – Under this model, you or your agency can create your own audience network by selecting a set of trusted affiliates who push your content within their site or application. Managed syndication relationships can take various forms and can range from small partners to major portals. Mobile distribution – More and more organisations are placing emphasis on delivering their video content across three screens – personal computers, TVs and mobile devices. Organisations of all sizes

are seizing the opportunity to reach new audiences and deepen viewer engagement, particularly on mobile devices. As a result, it is important that e-commerce organisations have a solution in place that is able to streamline the delivery of video content across three screens, as well as to social networks and third party websites.

in these low margin times. This is especially true when it comes to online video. It is imperative that you are able to identify your best and most effective v-commerce initiatives and discover audience behaviour toward your video content. Online video platforms have a range of tools to help you provide comprehensive analytics and reports that help track drop-offs and player From viral and three-screen distribution to interactions, monitor performance bandwidth advanced syndication, online video platforms and utilisation, and integrate with other leading give you complete control over which analytics and audience measurement solutions distribution strategies you choose for each like Omniture, Google Analytics and others. piece of content you publish, as well as offering Analytics and measurement tools enable a unified platform for delivering the best retailers to continuously fine-tune their online possible video experience across both PCs and video initiatives to maximise formats that work, devices such as the Apple iPad. move away from ones that are not working, and ultimately provide a better end user experience Analytics and measurement and drive increased sales. These analytics can be further developed by agencies to deliver bespoke Today’s online retailers must measure everything reports such as detailed customer journeys and to ensure they are generating the highest value conversion metrics.

Measurable ROI E-commerce organisations and retailers that have been early to adopt a comprehensive v-commerce strategy and integrate their video content into the overall shopping experience are already seeing substantial ROI from their initiatives. Though v-commerce is a relatively new phenomenon, the noticeable increase in conversion rates, site-traffic, video-views and customer engagement, such as M&S TV has generated, is hard to ignore. E-commerce websites and organisations are taking notice of how online video can help in increasing brand awareness, building online communities and fostering a more engaging sales process. As consumer demand for video in the online shopping process increases, it is likely that even stronger ROI metrics will emerge that help to drive the next level of online video adoption in the e-commerce and retail industry. In addition to driving conversions and customer engagement, online video also provides a host of other benefits for retailers:

Increased site traffic – Engaging online video content is a powerful tool in driving site traffic, particularly for organisations that are also syndicating their content to third-party sites and social networks Improves the chances your customers will find you online – Video as part of an e-commerce online presence helps improve organic search engine ranking. Many online retailers have seen a substantial increase in their organic search results after adding product videos to their websites. Also, according to Forrester Research, on the keywords for which Google offers video results, any given video in the index stands about a 50 times better chance of appearing on the first page of results than any given text page in the index. Greater prospect and customer engagement – Retailers who have used online video on their site have seen prospects and customers spend a greater amount of time on the site, a greater

number of return visits, as well as a larger amount of unique site visits. Video has also been instrumental in increasing click through rates across e-commerce websites Improved customer satisfaction – Retailers who have video on their site have seen customers make more informed purchases, resulting in fewer product returns and happier customers Decreased merchandising and support costs – Fewer product returns and more happy customers equal a reduction in costs associated with returned merchandise and less burden on telesales staff. Advertising cost savings – Online video content is much cheaper to produce than your typical television ad. Producing content specifically for online consumption also gives organizations more freedom and flexibility in the type, amount and length of content they want to create and can show significant increase in conversions over made for TV advertising.

conclusion V-commerce gives you economies of scale – you can reach more people with more engaging communications. It is cheaper than TV and yet the editorial and production values are just as high. It’s an innovative, non-intrusive way of marketing, and because it doesn’t feel like advertising, people are more responsive. All this, coupled with the fact that v-commerce provides measureable ROI, makes a compelling case. How retailers interact with consumers is, and always will be, driven by the needs and desires of the customer, and those customers now expect more from a retailer’s website than just images – they

demand engaging and interactive content. However, technology is also driving the creative process and in-turn, the customer journey. For example, it is an immutable fact that mobile apps will continue to flourish, and give us handy help in ways we never even knew we wanted. And augmented reality (AR) will be ubiquitous for the foreseeable future. AR is in its infancy, and currently has a lot of pitfalls – once these have been ironed out it will have a spectacular impact on retail. This paper outlines that the benefits of using v-commerce are hard to ignore,

particularly in the wider context of smart phones, the iPad, faster broadband and the ongoing fusion of technologies. We may be coming from a slightly biased point-of-view, but we can say with conviction that if you’re a retailer and you have no current or future plans to enter into the world of v-commerce and capitalise on the appetite for online video, then you will miss out on one of the most compelling ways to engage with consumers, as well as a huge opportunity to see a significant uplift in sales.