This Old House Drills Into Online Video

This Old HouseThis Old House, the venerable home-improvement brand, possesses a trove of video assets highly valued by users and advertisers alike.

Video is the very foundation of This Old House. The brand started off as a local Boston television show in 1979, and it now runs nationally on PBS. Time Inc., which had been running This Old House magazine, acquired the brand in 2001.

Originally, the show’s video assets made their way online virtually unchanged and without much consideration about monetization.

“We were quite naïve about it,” said Scott Omelianuk, editor of This Old House Ventures. “We had ten to 15-minute clips for people who were on dial-up. We had video that no one was watching except our most dedicated fans. It wasn’t monetized, either, because advertisers weren’t interested in it.”

Cut to today, with an Internet dominated by craft albums and DIY videos. It’s a culture that plays to This Old House’s strengths, such that video is one of the site’s main draws.

“We have a very high video conversion rate compared to most publishers,” Omelianuk said. “Two out of three people who come to the site watch video, and they … watch multiple videos.”

Instead of an online dumping ground for old videos, Omelianuk oversees a much more organized video hub. Among the DIY content are themed series like “Salvage Style,” “Family Projects” and “Team Saturday.” The latter garnered sponsorship from Jim Beam, which discreetly inserted itself into make-your-own games projects.

To monetize these videos, This Old House focuses on both sides of the video equation: CPM and sponsored.

This Old House takes advantage of a growing audience and pre-roll CPMs of $30+ (down from $100 CPMs easily garnered in video’s early heyday, Omelianuk noted). The rise of mobile benefits video, giving viewers an additional channel to watch This Old House content.

“Our completion rates on video are fantastic,” publisher Nate Stamos said. “We’ll have 22-minute episodes with 60% completion rates, and 800,000 to 1 million video starts a month.”

The site as a whole attracts more than 3 million unique visitors a month, according to recent comScore figures.

But though This Old House’s content is evergreen and will accrue a large number of views over its lifetime, it doesn’t have instant scale like Hulu, Omelianuk noted. The site must tread carefully with costs to ensure video investments turn a profit.

To finance bigger projects and provide better branding opportunities, This Old House turned to sponsored video programs. Fully integrated branding programs can bring in 100 times more revenue than pure CPM monetization of video.

It’s done 20 sponsored video programs with marketers this year, including a two-part series with Marvin Windows and Doors featuring a house remodel with custom windows, as well as a five-part series with Home Depot and an eight-part series with GNC.

This Old House often sells these series as “integrated sponsorships,” which include brand integration in the video content and complete share of voice next to the content.

The company responds to the majority of video RFPs with a custom video solution. Omelianuk will work with the sales team to come up with different ideas for executions.

But the brand integration is soft, for a more natural feel and to make the videos relevant even after a sponsorship has ended.

But while the market for video is bullish, making a profit can be trickier.

“Video production is a profit center for us, but there’s not any margin of error in terms of making money,” said publisher Stamos. Production costs add up fast, and the team has found that these spends require additional justification.

Digital buyers aren’t yet used to the costs associated with custom video, “even though our prices are fractions of what they spend for a TV commercial, and they get three to five minutes of custom content,” Omelianuk said. “Advertisers tend to blanch at the cost, when it’s less than 10% of what they’re going to spend on a 30-second commercial.”

For that reason, they find that sponsored videos, even if they start with an agency, usually rise to the brand level for approval.

If advertisers who created a sponsored video want to scale a campaign further, they can work with Time Inc. at large, as well as an extended network of sites like AOL with which Time Inc. has relationships. “If the size and scale of the buy mean we needed to use those networks, we can put it an another league,” Stamos said.

This Old House will put some of its content on YouTube, especially DIY pieces, and Omelianuk says the company is happy with the revenue share it receives from the videos.

“You can get a huge viewership and not make much money because the keywords associated with video aren’t desirable to advertisers,” he said. Because This Old House’s content shows up under high-value keywords related to home improvement, it performs better than most.

And despite the scale of YouTube’s network, videos generally rack up more views on This Old House’s URL than on YouTube. Omelianuk estimates fewer than 10% of video views occur on YouTube.

“That speaks to the brand’s power,” Omelianuk said. “If you’re doing a YouTube or Google search, then there are other brands and content creators. There’s more choice, and consumers aren’t as dedicated to us. People trust our brand, and come here to consume video.”

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