"On TV And Video" is a column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Alex Bornyakov, CEO at VertaMedia.
Pinterest is the latest social media giant to embrace video, but as it pins its fortunes on the format, can it succeed where others have failed?
While Pinterest has steadily grown its user base, its monetization strategy has been notably quiet compared to other social media giants. Ad units such as Promoted Pins and Buyable Pins have shown that it is capable of driving revenue, but it is video that could really catapult the network into pride of place on media plans.
But with Twitter, Facebook and Snapchat already chasing video ad revenue, let’s hope Pinterest’s intention to bring something exceptional to the table stands out. Above all it will need to demonstrate a clear strategy and show advertisers it can offer more than just mood boards to be a revenue driver in itself.
Users and advertising budgets are shifting toward video, which has become one of the few media formats still capable of driving significant revenue. Although Pinterest is late to the video advertising game, it has potential to outperform Facebook and Twitter.
Pinterest’s video potential is especially acute because users often have commerce on their mind, whereas Facebook and Twitter tend to be associated with updates on what is happening in users’ lives or rants about customer service.
What Are The Benefits Of Video Ads?
Every major media organization from Mashable and The New York Times to Yahoo is turning attention and resources toward video. With viewers drawn to its immersive and engaging nature, online video takes up more than an hour of the average US consumer’s day and is expected to generate $5 billion in advertising revenue by the end of 2016. Pinterest has seen a 60% increase in videos on the site.
As consumers lose interest in traditional ads, media companies increasingly are looking to new ways of capturing their attention and earning money, potentially driving users into the arms of ad blockers and further devaluing display ads. In comparison, the biggest draw of video ads is their ability to deliver a much higher CPM than the rapidly diminishing yield generated by standard display ads.
The secondary draw is the success of others, such as Facebook. Earlier this year the social media site hit 8 billion daily video views — placing it once again ahead of the curve and setting a path that many more will follow in a bid to engage with its vast user base.
Video works because it delivers a lot of info in a short space of time. Also, by its very nature, video ads are cross-platform so Pinterest will be able to monetize the 80% of traffic that comes from its mobile audience. Given that many brands know they need video for online advertising success, Pinterest’s reach and appeal as an ecommerce inspiration site could make it an ideal partner for marketers.
The Right Strategy For Video Success?
Despite the overwhelming popularity and power of digital video advertising, there are important considerations. A recent Google study found that almost 50% of online video ads served across mobile and desktop never had the opportunity to be seen. Video’s status as the ad format of the moment is leading many marketers to dive head-first into video advertising without first building a sustainable plan. For example, a large proportion of media companies are offering pre-roll ads that most users find irritating.
Pinterest appears to have taken this on board by rejecting autoplay videos for an in-feed preview that will only load once users indicate they are happy to view it – a great example of how it is considering its relationship with users. Brands will also be able to display pins alongside their ad, enabling a customer to buy into the look shown on the ad, playing well into what made the platform successful in the first place.
Something that Pinterest may not have considered is whether its users may want to post videos. This offers another ideal opportunity to monetize additional content, and Pinterest should make it as easy as possible for users to create and upload their own videos of products they have recently discovered and enable advertisers to serve pins alongside them. The user of the video could also potentially take a share of the revenue as creators, in the same way that YouTube does.
While video has the influence and ability to help Pinterest truly monetize its impressive audience, it will only increase ad revenue if used effectively. To convince advertisers, it needs to stand out from the crowds of brands already chasing video. If the company can build a video strategy that provides genuine value, intrigues users and offers choice, brands will be pinning a Pinterest video strategy to the top of their media plans.