Top Ten Video Commerce Predictions for 2009

What kind of a video commerce industry blog would this be without a “Top 10” List of Predictions for the New Year?  We won’t know – at least not this year!  It’s time to share our list of predictions for the video commerce industry in 2009.

10.  Online merchandising video dominates the focus of video commerce throughout 2009. Enough e-commerce sites are seeing measurable revenue growth from merchandising video on-site that existing and new entrants in the video commerce space will continue focusing the bulk of their video production and acquisition resources on this specific type of online video.  Online merchandising video also plays best as a customer loyalty and conversion tool as opposed to a customer acquisition tool.  It makes sense to focus video commerce efforts on loyalty and retention in 2009 as retailers hunker down to weather the current economic storm.  The proof that online video works is already out in the market and will appeal to marketers and merchandisers craving more ROI certainty in uncertain economic times.

9.  Video SEO matures while the hype begins to dwindle. We will start to see the early fruits of Adobe and Google’s late June blockbuster announcement that Google would begin spidering links in .SWF files.  In the meantime, measurable results from video SEO will remain concentrated around video metadata such as transcriptions, descriptions, and page structure.  We will see more video SEO cases emerging throughout the year in the retail space and new adoption of video SEO techniques in e-commerce.

8.  eMarketer misses its online video advertising projections of 45% growth in 2009. While the retail vertical traditionally lags other verticals when it comes to online ad spending (automotive, pharma, and CPG all typically outspend retail), 2009 will not prove itself a breakout year for online video ad spending in our space as most e-commerce organizations intensify their focus on customer loyalty and retention as opposed to acquisition.

7.  Commertainment gains minor momentum. Production of entertainment content blended with e-commerce (“commertainment”) will continue to accelerate as retailers seek to more deeply root themselves in the daily lives of their customers and develop new merchandising opportunities, but the requirement for ongoing, regularly scheduled, self-produced video content will cause most online retailers to delay investment in commertainment initiatives until merchandising and syndicated video are well-proven and widely adopted within the enterprise.

6.  Video commerce analytics come into sharper focus. While most e-commerce sites will continue focusing on page conversion rate and revenue attributable to video, industry leaders will dig deeper to understand what drives those key metrics.  Viewer attention & engagement will emerge as metrics to watch as organizations seek ways to build efficiency into their video production processes while allocating spend on production more intelligently based on what’s actually driving video engagement (e.g. actor, length of video, promotional v. educational focus, set design, production style).

5.  More retailers will experiment with affiliate video in a bid to increase customer acquisition from existing affiliates. Affiliate marketers will remain focused on CPA deals, yet most will not fully realize the potential of affiliate video marketing in 2009.  The higher production cost of video relative to other media coupled with increased demand for performance-based media places a special pressure on affiliate marketers in the world of video commerce.

4.  Online retailers continue to struggle monetizing video syndicated to emerging channels. Syndication of e-commerce video assets to emerging channels (e.g. YouTube) remains a useful method for building awareness, but few retailers have successfully generated meaningful revenues.   We’ll see more e-commerce sites attempt to overcome the user experience limitations of off-site video destinations with their own homegrown efforts focused on video SEO and driving traffic to on-site product pages.

3.  More e-commerce merchants invest in self-produced video. The generally bleak economy will cause many retailers to delay significant new investment in video production until much later in 2009 or 2010, which means there won’t be a lot of growth in the professional video production market due to retailer demand.  As a cost-containment measure, more online retailers will embrace the YouTube philosophy of “Everyone’s a Producer” and produce video in-house with existing staff, relatively inexpensive production gear, and simple sets.  We’ll also see mild to moderate growth in the e-commerce video consulting market as retailers struggle to understand how to best integrate video into the organization and deploy video most effectively on and off the e-commerce site.  Consumer Generated Video (in the form of product reviews) will not be a major factor in most video commerce efforts in 2009.  Those retailers that do succeed with consumer generated video will tie content creation to contests or discounts in order to entice consumers to create video content.

2.  Video’s cross-channel nature continues to create confusion while setting off internal power struggles for ownership. Each channel owner within an e-commerce organization has a distinct set of needs when it comes to online video, yet the scarcity of video content coupled with the possibility of reusing a single video asset in many ways will require stakeholders to come together and cooperate so the entire organization benefits.  Leading retailers will begin the process of centralizing video management within the organization this year, but power struggles will be common as business owners attempt to maintain control and prioritize the rollout of video based on a narrow vision of video commerce that fails to generate leverage for the entire business.

1.  Supplier / manufacturer produced video content really takes off in 2009. Retailers reticent to ramp investment in self-producing video will increasingly lean on their own suppliers to create content.  This trend will prevail across all non private-label retail categories (e.g. consumer electronics, health & beauty, home improvement, baby, etc.) but will be especially pronounced among the mass merchants and specialty retailers that carry the most leverage with suppliers.

The new surge in demand for video content from retailers will signal the official launch of the mainstream video commerce era and a new power paradigm that reverses an economy of scarcity where video content is limited to supplier content acquired through retail syndication networks or one-off relationships between buyers or merchandisers and vendor reps to one of abundance as more suppliers struggle to meet the demand of their retail distribution channels for additional video content.

The rise of supplier video content will have long-lasting and profound implications for suppliers, retailers, video producers, and other industry stakeholders.  For video producers, a surging market for video content from suppliers will buoy demand for video production services.  We’ll see more video production companies pop up while established companies should see 2009 as a year of growth despite the tough economy.  Retailers will quickly build libraries of video content and will be able to understand the real impact of video on the core business.  New technology providers will emerge and those in the market will need to adapt to best situate themselves to accommodate the new demand from retailers.

We will also see a new trend related to supplier video: customization of video content by retailer.  As retailers embrace syndication and seek differentiation from competitors, they will demand unique video content.  This demand will spawn a new generation of tools, place additional burdens on the video production process for suppliers, and accelerate the demand for retailer-produced video.

All told, while 2009 promises to be a tough year for many of us in e-commerce, the future of video commerce looks bright.  Video commerce is one of the few truly new innovations in e-commerce, and continued interest in video across e-commerce organizations practically ensures video adoption will only increase over time.  Happy close to 2008, and as always…

Happy Selling!