Content is an increasingly ad-supported medium, but content creators and publishers all seek to generate a two-pronged revenue stream to make production and publishing profitable.  With the democratization of content creation and a barrier-less publishing landscape, the supply of ad inventory has mushroomed, making ad-supported models unsustainable for most (unless you have some kind of comparative advantage rooted in a low-cost, high-quality model).

With users not all that interested in paying for most forms of premium content (consumers have proven to be willing to pay for ultra- and super-premium content, but not for made-for-Web premium content), this leaves licensing and e-commerce as two options.

We’ve previously looked at licensing models and options; today we’ll touch a bit on e-commerce.

Conversion and secondary demand

Zappos has been experimenting with videos as a conversion tool.  This form of videos as a means to convert people who are in the virtual store is a no-brainer and bound to become more commonplace.

Building primary demand

But video remains a branding tool — and by and large, there are few cases demonstrating that video has in fact converted curious surfers (let alone interested would-be shoppers) into actual buyers.  That doesn’t mean that publishers and marketers can’t turn to video content to generate e-commerce, however.

Here are some factors to consider:

Scale

The pre-roll ecosystem is a loser’s proposition for most content creators.  CPMs keep falling, and with about 50% of videos generating 500 views on average, the reality is, you can’t expect videos to break even.  However, 500 targeted views may lead to one to five sales of a product, which means that the revenue generated from e-commerce has the potential to be more lucrative than the revenue from advertising alone.  While you need serious scale to drive either e-commerce or advertising revenue, at first glance, it’s possible to develop a profitable e-commerce strategy, while advertising schemes are becoming increasingly difficult if you lack your own-and-operated property.

Timelessness

E-commerce offers tend to be timely in nature, whereas any timeless video can swap out old ads for new ones.  As such, an e-commerce strategy needs to take into account how popular your video will be over time.  According to some stats, 25% of views come in the first four days, after which point the views trail off; if that’s the case, the e-commerce offer can be timely.  If, however, you produce more timely videos that sustain views, it’s important to ensure that your offers don’t get stale.

Tech limitations

Of course, there’s no need to “bake in” the offers (be it via graphics, or verbal mentions).  One can technically rely on dynamic overlays to regularly update a video with new, pertinent e-commerce offerings over time.  Of course, the limitation here has to do with technical realities.

Distributed model presents unique opportunities

Online, most of a video’s views will come in a distributed model, frequently in a third-party player.  This means that any dynamic overlay is an add-on to the content, in the player.  Chances are, then, that you, the producer, don’t control that aspect.

There’s no silver bullet

In other words, you have to choose which approach to take, as there are no silver bullets.

If you promote timely offers, those will quickly become irrelevant to viewers over time.

If you pursue a dynamic insertion strategy, then those may not travel around the web with your video, limiting their impact.

Buyer beware…

E-commerce is as old as the Web, but video is a relatively embryonic tool. Through experimentation, video can augment a producer and publisher’s monetization strategy, but any attempt to find a perfect solution may be wishful thinking.  You know that saying: If something seems too good to be true, it just might be!