Online video offers new ways to promote products—but it’s not as easy as YouTube makes it look
By Bill Briggs
If a picture is worth a thousand words, then a video must be worth 100,000 words. At least that’s the view of some online retailers who have started using video to promote their goods and who appear convinced video will become increasingly valuable.
They hope to take advantage of increasing consumer familiarity with online video as a result of free video web sites like YouTube. The e-retailers deploying video say it helps bring products to life for consumers, but that the technology challenges remain formidable.
What online video does best is support sales by informing customers and keeping them on an e-commerce site longer than they might have stayed in the past, says Thom Disch, president, CEO and owner of Handiramp.com, a b2c and b2b company that sells ramps for homes, businesses and vehicles. “Video gives action and voice. It’s a wonderful way to reach out and tell the customer, ‘This is the right product,’” says Disch, who also is founder and CEO of Internet-Engine.net, an Internet marketing company.
New marketing opportunities
Video can demonstrate how a product works and offer instruction on how to use and care for the product in ways that static images cannot. Video also provides new marketing opportunities: E-retailers can post TV commercials as well as clips on special offers, and videos can be embedded in marketing e-mails.
However, the technology is new and not yet easy to implement. Producing a video requires a significant investment of time and money. And even if their suppliers provide product-demonstration videos, web merchants still have to integrate the videos into their web site platforms.
Videos from multiple vendors mean multiple formats that have to be made compatible with e-commerce platform software, drawing information technology resources away from other projects, e-retailers warn. While some retailers might conclude online video is a luxury rather than a necessity today, others are already in the game and hoping to benefit from the broad trends making online video more commonplace.
The technology behind online video has improved significantly as the use of high-speed broadband has expanded to two-thirds of all Internet-connected U.S. households. Those faster connections have more consumers looking to the Internet as a source for movies and TV shows, such as through Apple Inc.’s iTunes and RealNetworks Inc.’s Real.com.
High priority
E-retailers are noticing. In the State of Retailing Online 2007 survey by Shop.org and Forrester Research, streaming video clips and podcasts ranked second among the technologies web merchants planned to invest in to help consumers better research products, cited by 51% of the 150 respondents. Product zoom was first at 58%.
Video’s basic selling point is that it shows a product in action. A video demonstration of a power drill, for instance, can help sell the product, and help the shopper find the right drill, Disch says. “If you can show in a video how easy a product is to use you can confirm it’s what the customer wants—or that it’s not what they are looking for,” he says.
Handiramp.com started using video in 2005 to describe its equipment and show how one product differs from another, Disch says. It began by creating videos in-house with a simple digital camera that had a video feature. The result was brief clips showing simple set-up for ramps used on commercial and private vehicles. For its pet-oriented product, the company turned to a professional videographer to develop a 4-minute video showing how to use pet ramps.
Many of Handiramp’s product demos use Flash technology from Adobe Systems Inc. to manipulate still images shot with a digital camera, many of which can shoot a few seconds or a few minutes of video. The company is updating its web site and plans to add more 1-minute product demonstration videos to increase the time shoppers spend on the site.
Disch is convinced that consumers who spend more time on his site will be more likely to buy, although he admits he has not measured the relationship. “I know that sales are up, but I cannot tell you just how much might be due to the video,” he says. “I am a big believer in A/B testing, but in this case I just knew that the video content was better than the content that was replaced.”
2nd Wind Exercise Equipment is another retailer using video and thinks it’s paying off, but does not yet have the tools to measure its impact on sales. The company, which sold mostly used exercise equipment when it launched in 1992 but now sells primarily new equipment, knows that consumers are viewing 6,000 to 8,000 videos a month on its site, 2ndwindexercise.com, says Adam Lindquist, director of business development. And, he notes, “a person who looks at it stays onsite six times longer.”
Tracking sales
But does that lead to more sales? “We believe there is a correlation but we have no statistical data to back it up,” he says. He adds that the marketing firm that helped him develop the online video, Juice Media Worldwide LLC, is developing a tool to help 2nd Wind track the relationship between video views and sales.
Getting started with video wasn’t easy, Lindquist says. “A lot of it was seat-of-the-pants and the first couple of videos were kind of bad.”
Since the start-up phase, the videos have improved and the retailer has come up with more ways to use video. “We use it to post our TV commercials, to show sales specials, and on the service side as an instructional aid for customers,” Lindquist says. The company also uses video to communicate with its 110 physical stores in the upper Midwest, for instance giving them access to new videos provided by manufacturers.
2nd Wind also includes videos of beginner exercises in e-mails to customers as a sales follow-up, he adds. 2nd Wind now has its own studio to create product demo videos, Lindquist says. The studio cost about $15,000 to set up, a price Lindquist says is at the low end of such investments. “You could easily spend $50,000 to $100,000,” he adds.
Beyond the price of the equipment, 2nd Wind employees found they had a lot to learn about making videos, and few models to guide them. “In the beginning there was a horrendous learning curve on how to make them,” Lindquist says. “We had to dedicate someone to the job because creating them was unbelievably difficult.”
How big is big?
Employees had to learn the proper way to position cameras for filming product demos and to determine the optimum size for a video. 2nd Wind tries to keep its longest videos to about 90 seconds because a 3-minute video can take more than a minute to download, depending on the viewer’s Internet connection capacity.
Managing large files meant purchasing new servers to handle the load, along with monthly fees incurred to support them. The company is spending about $1,000 a month to support the bandwidth necessary to manage videos for dozens of products and about 10 TV commercials.
Adding servers was the biggest expense, but there were so many other resources required that Lindquist says it’s difficult to estimate the total expense. More investment lies ahead, including for increased bandwidth, he adds.
The video project took a lot of personnel time. In addition to staff from Juice Media, 2nd Wind’s video team includes its webmaster, a graphic designer, its I.T. specialist and Lindquist. The internal team has other responsibilities than the web, he notes, so sometimes progress is slow.
For e-retailers like Handiramp.com, presentation quality dictates online video equipment requirements. Handiramp.com makes simple product demonstrations using the movie mode of a digital camera or with a low-cost digital camcorder. The company cannot afford full multimedia productions.
“We haven’t had major costs, but the more money you put into online video the better it will look,” Disch says. “If you’re Target or Macy’s you’ll want high quality. Handiramp is more interested in conveying how something works and less interested in a polished look.”
As Handiramp moves forward with its site redesign, new videos will be added. One decision the e-retailer faces is whether to create multiple one-minute videos that break down a product demonstration into segments or longer versions that cover an entire demonstration. “We think several one-minute videos are more effective because once we segment the content we can talk about five topics briefly,” Disch says.
That pattern better suits shoppers who want only to see what’s most important to them. Disch believes short clips better match what shoppers want from the site—fast information.
Shoppers drive content
Tuning into what customers want is part of the battle for managing online video content, says Mike Spindler, CEO at Gladson Interactive. Gladson Interactive provides product images and dimensions as well as label detail for e-commerce and physical stores, with a focus on the grocery industry.
For starters, it’s essential that the video provides accurate information. For instance, “Is it this year’s version of the product?”
Next, is the video consistent? The video must be tuned to the e-retailer’s web site information systems, he says. Merchants who develop their own videos will make them compatible with existing technology. “But if they are getting content from 10 sources they could be getting different file formats and load speeds,” Spindler says.
The resolution of video images must be high enough to make them appealing to shoppers. “If you don’t have control over those things you’re going to have a variety of videos from different sources and different quality,” Spindler says. “If the quality or load time varies widely, like that on YouTube, it can be hugely frustrating for shoppers.”
Gladson Interactive customer MyWebGrocer.com operates web sites and provides e-commerce technology for 80 grocery companies around the country and is developing online video for a number of them, says CEO Rich Tarrant. Video file size and format compatibility are key considerations for any e-retailer, he says.
Video should do more than just replace static images—it should be interactive, Tarrant says. For example, a shopper viewing an online video of a cooking demonstration should be able to buy at least some of the ingredients called for in the recipe being prepared.
“Adding video is good,” Tarrant says, “but connecting the dots is better.”
billb@verticalwebmedia.com
A video marketing strategy outline
Thom Disch, head of multi-channel ramp retailer Handiramp.com and Internet Engine LLC, an Internet marketing company, has worked both sides of the online video fence. His e-commerce site uses demonstration videos for ramp products and is being redesigned to add more.
Disch offers the following points for e-retailers to consider when pursuing online video.
— Decide on a budget.
— Determine the type of media you will be using and whether it is compatible with most browsers
— Determine the software you will be using to address compatibility issues.
— Weigh video quality against user download time and let the viewer know the video is downloading by including in the first frame the phrase “video loading.”
— Check bandwidth on your web site. Each viewer that clicks on your video will be taking up some of your allocated bandwidth.
You can add video to your web page in different ways and formats. Videos can be downloaded, depending on the size, or they can be streamed, a process that enables viewing video after a brief delay without downloading a file. Longer and higher-resolution videos are good candidates for streaming. A short video clip can be downloaded rather than streamed and accessed by a link to the clip or embedded in your page. These clips usually are in .avi or .mpg format.
The most popular formats for video are QuickTime, Windows Media, Real Media and Flash. Using Flash software enables you to create a video with relatively small file size and maximum compatibility.
The most important consideration is that your message should be clear. First determine the length of video based on the message, then develop storyboard ideas and prepare a script. Try to break the message into smaller video segments; don’t give shoppers too much information at one time.
Last, use a transparent “watermark” company logo in your video in a corner for branding, and add a link back to your web site.
