CQPTiVATING THE AUDIENCe THROUGH ViDEO MARKETING. INTERACTIVE & CUSTUMIZED PQRTCiPAHON ON YOUTUBE & HULU LORENC ESCOBEDO REBEKGH HOBBS MaYU waTandBe MaRid SGNCHEZ(eto) OL) ra Cafe |))) EXECUTIVE SUMMARY INTRODUCTION BACKGROUND METHODS/RESULITS INTERVIEW RESULTS DISCUSSION CONncLusIONLorena Escobedo is in her last year at Ball State University. She is currently majoring in Telecommunications, ‘Spanish and French. She enjoys I- earning new software and learning what design software is capable of. Traveling| is something she hopes to do more of in the future. She is interested in pursuing a career in marketing and advertising. She appreciates a good advertisement and is interested in the potential that viral marketing has. Mayu Watanabe, 20, is an exchange student from Japan. She studies at Ball State University for just 1 year. She has broad interests, for example, children, education, information technology, media,and international affairs. She uses YouTube for watching promotion video of music. Her opinion about video advertisements of YouTube is that they are annoying. She often skips them quickly. Then, what kinds of advertisements work for her effectively?| Rebekah Hobbs is a sophomore at Ball State University, studying publishing and Spanish. She enjoys learning about other cultures and new technology, and would like to pursue a career in publishing or graphic design. She is interested in the way different types of consumers respond to certain Maria Sanchez is a junior at Ball State University. She is double majoring in Telecommunications and Cultural Anthropology. She enjoys rock climbing camping, and cooking. She hopes to {travel and learn about different cultures. When it comes to video advertisements, she finds them annoying, but thinks that they have potential to become a very useful way for companies to reach out to their consumers.Re L.Marketing, LUT NAMIC eRaNCICedT RLM marketing is committed to providing information to our clients based on the high- est quality of research. To help our clients reach their needs we will thoroughly re- search and analyze data specifically focus- ing on marketing trends and consumer data. We aim to positively impact our clients’ companies and their objectives in order to improve business relations between our cli- ents and the public. Our project aims to determine the effectiveness of advertisements on video-streaming sites. We will gather information based on the audiences’ use of YouTube and Hulu. Surveys will provide a broader perspective from consumers, while interviews will go more in-depth with consumers. This project is especially useful because it affects the most modern type of advertising, and the most profitable consumer demographic. Video streaming, YouTube, Hulu, Effective- ness, Advertising, Surveys, Interviews, Consumer demographicINTRODUCTION WHY DO RESEGRCH? The purpose of this study is to determine how captive audi- ences interact while watching the advertisements on two video sites, YouTube and Hulu. This includes any interac- tion on their part with the advertisements, with further re- search into the advertisements and the methods used by au- dience members to avoid viewing the advertisements that precede videos. We had a total of 200 participants take the survey and a total of 5 interviewees. The reason to do research on this topic is to find out how consumers interact while watching video advertisements on YouTube and Hulu.com. The goal is to figure out if consum- ers are drawn to specific products due to the advertisements that are shown in these two websites. If so, which ones and why. Also, the research will show whether these advertise- ments are even effective at all and how the consumers feel ibout these advertisements on the two sites. CENTRAL RESEACH Questions Peper a ee nn Ce Bee en eek CR cs PA CSR er curd etc ON Cann Crd OMe hokey) PE Cee Ree ty iedHulu is an online video streaming site. Currently Hulu streams TV shows, movies, webisodes, trailers, and behind-the-scenes| footage from NBC, FOX and ABC among other networks. Hulu was founded in March of 2007 and is a joint venture of NB- CUniversal, Fox Broadcasting Company and Disney-ABC Television Group. It is currently owned by the three companies that started it. Hulu began its advertising campaign during the 2009 Superbowl. Its | ad starred Alec Baldwin and was titled “Alec in Huluwood”. In 2010, Hulu Plus, a monthly subscription service was launched. Hulu Plus offers a more expan- sive library of video content, including full seasons of shows currently available on Hulu. YouTube is primarily a video-sharing website that was created in 2005. It was created by three former PayPal employ- ees, Chad Hurley, Steve Chen, and Jawed Karim. The idea was supposedly hatched after the men had difficulty sharing videos that had been shot at a party they all attended. In 2006, Google Inc. acquired YouTube for $1.65 billion dollars. Advertisements began on You- Tube not long after. YouTube is not ex- clusively a video-sharing site. Addition- ally, YouTube has a Movies page that allows users to watch free movies and rent movies. YouTube also broadcasts certain sports for free and in 2012 it streamed all three presidential debates. According to some previous research 58% of 18-24 year olds stay tuned to adver- {tisements that play before their desired video. 15% of consumers leave the site en- tirely when an advertisement begins to play. Advertisers spend $2.2 billion on all online video ads, compared to the $65.5 billion spent on television ads. YouTube advertisements have an advantage over regular television ads because they allow the viewer to choose whether they want to watch, share, or create their own videos about products. On the other hand, Hulu charges advertisers only when ithe ad plays 100% through. Hulu also offers a feature called “ad swap” which allows ithe consumer to choose the type of ad they want to see. This not only helps sell the product, but also allows the consumer to have control of the content they want to lwatch. When testing of this new feature began, 46% of consumers stated that the ads became more and more relevant.Our survey was hosted through Qualtrics.com. We chose this site because of its branching option, which came in handy since we were asking separate questions for Hulu and YouTube users. We had a consent form, which required our participants to agree that they were at least 18 years old. Our survey consisted of 10 questions relating to video advertise- ments in both Hulu and Youtube.com. Participants lwere recruited through Ball State’s Communications Center and social networks (Facebook & Twitter.) We had a total of 200 participants. Usage Out of 200 people we found that 54% use YouTube only, 3% use Hulu only and 43% use both. Our data suggests that YouTube is Poeniiunoatin Saeki can Oe Rc ey atta cy H iii) BRERRRURS ESS A Oe enc kk cee eog icc Renee om ae Rukia Cantos STL OM Cec er a UC sea co dttereeeneeteteattnetiettette | BA ZM ORO UPR eer ee ures Reta 18-29 year olds and Ads eR eeu ua ROR Bello Ua ui nek ee aca Clr UO OR ea eee ua CRP md RST OE ORS gee ue UU a Our Thoughts: PERO eRe ARUN CRe CO okie BECO ec Re EU ea mun CUT ios DA oe SECU es eee Re ae reo Cena CRU MeL oe SEER aCe og CuI} DR OR OR et CRC OU Lee One Dien Pe CCR OE i ca nee RCO ECR om eee hd Rusu e RRC a Re SOIC CORT ReeMETHODS CONTINUED Oe ae Onegai Input on Ads All ages Pee rt ukuee k ae a Neen Ce ore eer eae CLT features are limited to a “Skip Ad” button that appears at eee ne a rch ternt seconds, YouTube allows you to skip the ad and go straight acm ern ti Re Cert ey et oe Crna a ery) that is playing is relevant (to the user) “yes or no”. In addi- tion, occasionally users are prompted to select between Pe ene ar Race CEL Ree u ee Sattar eee Oats Bee a RU eee CeO ee ee ku o uu ce - YouTube is the most widely-used streaming site (according to our data) but it has few pCa ei ee Uae ec eect ec hk oo tures, rendering a lot of “neutral” responses. PRA Cc Rare u a arte Rug eB Resco ae Ce nk ucu eu Cuar lcm Memorable AdsTS CCR akc Tus} ne hor cure Cer Pita Ce eae Re ter sy Oe Cac e a ec eR cea eect the interview. The interviews lasted 15-20 minutes PIU eS Sr emacs curiae) how consumers felt towards video advertisements. “I would say things that are tailored to the message and things that are simple and not all over the place, and personally | like things that are funny, so those are the formats that engage me the most.” WHAT TYPES OF GDS GTIRACT YOUR CTTENTiO! “Yeah, well, with that option at least you can choose, to make it more relevant, but still it's kind “They don't. They have this it's fifteen seconds, even thirty, I have such a short attention span | just want to be done with it” during it'll check my email or Facebook or go to the bathroom...or get up and do something else.” “the demographic calculating algorithm they have is terrible, they pick the same three commercials all day long, so | see the same six things all say long, and the longer I see them, I continue to care less WHAT TYPES OF THINGS DO YOU DO WHEN GN GD COMes UP? and less about them.”According to the interviews, certain types of ads attract consumers. The way advertisers use music, color, and text is crucial in gaining or losing the audience. Participants responded better to minimal text in a simple design. Re- sponses also improved when the content of the ads related to the videos, or when consumers had a character with which to identify, such a Flo from Progressive. Interview participants also enjoyed having input to the ads they watched, since that prompted them to think more about the content. Humor was valued by Our interview subjects did not relate well to the lad content in general. Gender appears to be a {factor as far as which site's advertising content re- lates to which consumers. Hulu did not relate well to one male subject, while he did feel that YouTube's ads were relatable. Another male found YouTube ads irrelevant, as some female subjects. Some found Hulu’s Ad Tailor helpful, and used it to get rid of ads they hated, while others didn’t notice a difference in the relativity of ads. ‘One possible concern is that some sites, espe- cially YouTube, seem to slant more advertising to- wards men, featuring commercials for cars, movie trailers, and insurance, possibly because men use those sites more, or at least spend more time on them. Although this isn’t the sole reason women viewers feel left out, advertisers are falling short of the mark with this demographic. The general consensus is that ads are a barrier to content, a waste of time. One participant was so frustrated with ads that he mentioned “length” as ithe most attractive quality in ads to him, and talked labout how poorly the algorithms find ads that relate to video content. all the participants, though it varies, s0 it is difficult to predict what will be funny to each consumer. Another thing that is difficult to pres the mood of the consumer, though it seems to be one of the biggest factors in consumer re- sponse to ads. Popular music has the benefit of attracting consumers with the familiarity and entertainment value. Movie trailers were frequently mentioned, and some participants were usually interested and found them memorable, while others automatically ignored them. The opportunity to choose between two ads can yield valuable results for advertisers, According to one interview subject, the choice prompts him to ‘engage by considering the value of the ad and the product instead of dismiss- ing it immediately. Given the choice, consumers will do what they can to avoid ads, such as skipping it, or choosing the most con- venient option, whether one long ad or multiple short ones. Some consumers liked the latter option, because they felt that it took less time to reach the video, and chose to open a new tab during breaks, while others preferred the single long form, since they found the ad more interesting, and then had no more interruptions.In conclusion, Most people do not find advertisements on YouTube and Hulu.com to be interesting or relatable. While ads are disliked; the input features are under-used. Certain types of ads attract consumers with things such as color, sound, and text. Having a recurring character or humor can also helps. It is also important to catch the consumer in the right mood, though this can be almost impossible. Our participants did not seem to relate to the ads well, though YouTube ads seemed to work better males. Participants used the skip button whenever they could. The opportunity to choose between two ads can yield valuable re- sults for advertisers. It is also common for consumers to filter ads and immediately ignore them, such as movie trailers or commercials for cars or insurance. The length of the ad does have influence on whether the consumer sits through it, or opens up another tab white the ad runs. Lastly, the interactive content is rarely used, and often ignored. Overall, our participants did not relate well to the majority of ads. They felt the content was not in- teresting to them personally, so they were not interested in view- ing the commercials. This reflects the challenges advertisers face when promoting their products to a disinterested population. Another barrier is the algorithm advertisers use, which consum- ers did not consider effective, since it does not match the ads with the videos and viewers. Our participants describe the ad se- lection as a hodge-podge, not based on any recognizable pat- tern. Consumers are not inter- ested in following links to the company website, so marketers must work harder to draw consumers to their products within the commercial. Some consumers also have a great mistrust of following links, as one remarked “virus central” 1s a reason for not using links. Itis also common for consum- ers to recognized certain types of ads and immediately ignore them, due to annoyance or strong bias. With ads like movie trailers or commercials for cars or insurance, advertisers must work harder to interest potential consumers with the content of the ad itself, Consumers commonly try to avoid ads by opening a new tab or leaving the computer to do something else, especially for commercials between 30 sec- onds and 2 minutes. Advertisers could have more frequent, short- er breaks to combat this prob- lem, or work with the website hosts to entice the audience to stay on that site through the commercial, perhaps with con- tent related to the show. How- ever, one marketing student found it more helpful to have fewer long commercials, be- cause it allows the audience to become more invested in it.CONTACT US Co-Investigator lescobedo@bsu.edu Co-Investigator mwatanabe@bsu.edu Co-Investigator thobbs@bsu.edu Principal Investigator mesanchez@bsu.edu