Minion-fueled growth

As unlikely as it may have seemed during the 2000 – 2009 decade, when successive corporate owners (Vivendi and GE) didn’t make meaningful investments in the company, and a period punctuated by the Great Recession, this week Universal Studios Hollywood is celebrating an outlook of unprecedented growth.

It’s truly been a monumental week for the Universal Studios Hollywood theme park, with expansion-related news coming fast and furiously (literally).

Most tangible for 2014 is tomorrow’s grand opening of the new Despicable Me Minion Mayhem ride. Also opening is Super Silly Fun Land, a Despicable Me-themed family play area.

As you can imagine, we have numerous initiatives underway to spread awareness of the new ride. For me personally an interesting one was the video embedded above, featuring James Franco and some Minion friends. It was created for online use, particularly social-media sharing. (Developing and releasing this video has been an experience — one that would make for a good blog post if only the details didn’t fall into the realm of confidential information.)

Ride launches are big deals for theme parks. Given the high development and construction costs, they tend to be fairly infrequent.

That makes this week’s situation at Universal Studios Hollywood extra unusual.

Not only do we have the Despicable Me grand opening, but we also announced two 2015 launches: Fast and Furious – Supercharged and the expansion of the Simpsons Ride area to include stores and venues right out of Springfield (e.g., Mo’s Tavern). Also it was officially announced that the Wizarding World of Harry Potter will open in 2016 (the date hadn’t previously been communicated).

The New York Times published an article that provides a very good overview of the expansion plans, which include infrastructure improvements such as new parking garages.

Unlike previous corporate owners, current owner Comcast is making a huge (over $1 billion) investment in the Universal theme park business.

This investment in physical expansion coincides with a period of strong financial expansion. Comcast/NBC Universal publicly reported the theme parks division’s operating cash flow increased from $400 million in 2009 to over $1 billion in 2013.

Walt Disney has also reported strong financial results from its theme parks division. Disney and Universal Studios are also both increasing their international footprints with new overseas parks in development.

A heightened appreciation for real-world entertainment?

The growth of Disney and Universal Studios theme park businesses runs counter to a fear that was whispered a few years ago.

While never an official outlook, I recall hearing people in the industry privately express concern that the emergence of high-quality digital entertainment (HD TVs, highly realistic video games, and the unknown impact of the Internet) would render theme parks less relevant. The concern was that less expensive in-home entertainment would rival or outpace the park experience.

Perhaps what really happened is that increased time spent with digital devices has made reliable out-of-home entertainment more valuable. This might be especially true for parents who see a day at a theme park as being a way to get kids away from the Xbox for a period of shared, heads-up family fun.

These last thoughts are only personal speculation. However, it’s noteworthy to me that so many theme parks are thriving despite an ever-increasing volume of competitive leisure-time activities and attention-grabbing digital devices.

For many families, experiencing fun attractions together — with kids looking away from iPads — is worth the price of admission.

(Disclosure and disclaimer: As noted elsewhere on this blog, I am an employee of NBC Universal. All company information mentioned in this post is already publicly available. All opinions are personal and do not represent the opinions of the company. See media relations website for official press contacts and press releases.  To state the obvious, the achievements of Universal Studios Parks & Resorts are the result of the hard work and commitment of many people.)

 

Video ads poised for takeoff

One of the noteworthy digital marketing stories of last year – the growth of video advertising – is picking up momentum.

Expect many more headlines about this trend in 2014.

I posted about the topic last summer. Half a year later I’m even more confident the market will quickly expand.

I anticipate significant growth and innovation in the video ad space this year, both on the advertiser side (from the number of buyers to an increased willingness to test creative specifically tailored to the medium) and on the publisher side (e.g., the types of formats made available).

Factors driving video ad growth include:

Expanding audience

There is increased consumption of the digital media that supports video ads, especially via mobile phones.

Increasing number of ad vehicles

For example, Facebook introduced video ads last month. Expect Facebook, Twitter and other ad sellers to tweak their existing video ad formats and to add new ones.

A front page story in today’s Wall Street Journal discussed the WatchESPN app, which ESPN owner Disney sees “as a way to cash in on growing demand for online video.”

Media agency recommendations

Agency planners are more frequently recommending video ads as a component of comprehensive advertising campaigns.

Increasing comfort level of ad buyers

As ad buyers themselves watch more online videos it’s natural they’ll become knowledgeable about, and interested in, video ad formats.

Meanwhile, Google took a step to comfort some more traditional-minded marketers when it recently announced it’d allow advertisers to test the use of Nielsen measurement tags on YouTube ads. (Nielsen reportedly expects this to become permanent in 2014.)

These tags will provide third-party metrics similar to Nielsen’s television audience ratings and should lead some hesitant marketers to initiate YouTube video ad campaigns.

More inventory made available on ad exchanges

Publishers are increasing the amount of video ad inventory available on a growing number of so-called programmatic platforms/exchanges, which makes it easier to plan, execute and optimize large-scale ad buys.

Predictions

1.  Many of the marketers who step into the arena for the first time in 2014 will quickly increase their expenditures on video ads.

They will be impressed by the flexibility and measurability of video advertising. For example, the ability:

  • Target specific DMAs (defined geographic areas) at low cost; e.g., to expand into additional markets, including international ones, that are beyond the reach of their TV ad campaign budgets
  • Test creative executions head-to-head while monitoring metrics such as completed plays, clicks to website and online conversions

2.   More marketers will run tests to see how their target markets respond to broadcast plus online video ads

My former Universal Studios colleague and now co-founder of a digital marketing & analytics agency, Frank Vertolli, recently published an article that references such a test his agency ran on behalf of a travel industry client.

3.  Customized creative executions

We will see more examples of video ads that take advantage of the medium’s unique opportunities to engage target audiences.

One of best video ads I’ve ever seen in the wild (i.e., while going about my business) targeted me based on a previous YouTube.com video view.

I was on a weather site when I saw a video thumbnail image featuring the stars of the Comedy Central show, Key and Peele. The comedians’ faces caught my attention because I’d recently watched a few of their show clips on Comedy Central’s YouTube channel.

I clicked the “Play” button. The video opened with voiceover saying, “We know you like watching Key and Peele on YouTube, but you’ll love watching the whole show even more on Comedy Central.” After a snippet of comedy the spot ended with the comedians pitching benefits of watching on TV.

The ad was a fantastic example of a creative execution specifically made for a given situation.

Here’s one of the ads from the series:

For many advertisers the easiest way to get video ads online is to reuse television spots. However, in time we’ll see more advertisers embracing the fuller potential of video ads by creating content geared to the medium.

All the trends and opportunities mentioned above reinforce one another, which strengthens my belief that 2014 will be a year of impressive growth in the video ad market.

Halloween. It’s back…

It’s mid-September but Halloween is front of mind at Universal Studios Hollywood because this Friday is opening night of Halloween Horror Nights 2013.

Halloween Horror Nights (HHN) is our annual nighttime event featuring entertainment geared toward horror-lovers and Halloween aficionados. We say the event is for ages 13 plus; it’s definitely not for children or the faint of heart.

For many of us at Universal Studios Hollywood the event has become a year-round endeavor. This is especially true for the core group of people leading the entertainment plans as well as for my team working on social media.

Facebook and Twitter have become amazing platforms for keeping fans engaged throughout the year — which means we have momentum heading into the start of the broad advertising campaign in September.

Universal Studios Hollywood held HHN in the late 1990’s but put the event on hiatus from 2001 – 2005. (Universal Orlando had it running throughout those years). My involvement in the event began with its return to Hollywood in ’06.

The timing of the ’06 return — coupled with the fact that digital has consistently been a primary communications vehicle since then — makes the history of HHN social media programs something of a mirror reflection of the history of mainstream U.S. social media.

Following is a summary of Universal Studios Hollywood’s HHN social media evolution.

2006, the re-launch year

MySpace was king.

As you may recall, Facebook was only opened to the general public in late Sept 2006. Up until that point it was restricted to students and select others. Its user base wasn’t yet large enough to be relevant to HHN marketing.

YouTube was more mainstream, having opened to the public in 2005. We dabbled with YouTube in Fall 2006, but MySpace was much more popular at the time and that’s where we paid the most attention.

The event was themed around a fictional character named The Director — a twisted, violent, blacklisted filmmaker who was out for revenge on the Universal Studios backlot. We created a MySpace page for the character, filled with videos, photos and other content that set up his back story and told of his appetite for blood.

The page was very 2006. Luckily, it was 2006. The page was a hit.

2007 – 2008

YouTube became the focal point of HHN social media engagement, while MySpace faded out.

2009

While we continued (and still continue) to create videos for YouTube, 2009 marked the start of official HHN Facebook and Twitter accounts.

From the get-go we gave Twitter and Facebook their own voices and perspectives. Twitter is used to provide more of an “inside baseball” view of the event (which has been executed well largely thanks to the passion and commitment of the event’s creative director) while Facebook provides more general event news and related entertainment (e.g., via the posting of original horror-related images/memes).

On a personal level, the launch of these social programs led to what should probably be the only time my name is ever mentioned on Bloody-Disgusting.com

2010 – 2012

This period was marked by steady growth of the event’s Facebook and Twitter audiences, experimenting with YouTube video advertising, and the addition of social commenting on the Halloween Horror Nights website.

HHN Instagram launched in 2012.

2013

New for this year is the start of HHN’s Instagram videos (the capability was launched in June).

Onwards

Wow, a lot has happened in seven years. Who knows what’s in store over the coming years… for sure there’ll be ever more ways to share the HHN scares.

I must end with a very well deserved thank you to my teammates/co-workers who’ve contributed so much effort and creativity to all the above-mentioned programs.

(Disclosure and disclaimer:  As noted in my bio and is obvious from the post, I’m an employee of Universal Studios Hollywood and am personally involved with the programs discussed above. All comments reflect publicly available information. Opinions reflected on this blog are personal and do not represent the opinions of the company).

$hift to Digital

100 Billion

A few weeks ago I read a data point that struck me as noteworthy for anyone interested in the growth of digital marketing and the trajectory of the advertising industry.

That data point, highlighted in a WSJ article, is that “Procter & Gamble Co. is now spending more than a third of its U.S. marketing budget on digital media…”

The article continued:

P&G chief executive A.G. Lafley said the consumer products giant’s digital spending on things like online ads and social media ranges from 25% to 35% of its marketing budget and is currently near the top of that range in the U.S., its biggest market.

This budget shift is of particular interest because it’s P&G, owner of the world’s largest ad budget and a company renowned for brand marketing.

Traditionally brand marketing has foremost meant television commercials, but the WSJ article also highlights a significant media-consumption milestone:  2013 is projected to be the first year that Americans spend more time with digital media than watching TV.

Which nicely segues to data included in an eMarketer article published yesterday:  eMarketer projects that in four years (2017) total U.S. digital advertising expenditure will be $61.4 billion, closing in on television’s projected $75.3 billion.

Within digital, the fastest growing format is video advertising. According to another eMarketer article from earlier this week, U.S. digital video advertising will increase by about 40% this year and next, and it’s growth is coming at the expense of television ads.

That article highlights research from the Interactive Advertising Bureau (IAB) that finds “much of that increased digital video spending will come out of former TV budgets. Seventy percent of buy-side US senior executives told the IAB they would likely move TV dollars to digital video in the coming year.”

Earlier this summer I wrote a blog post talking about the growth of online video. In that post I included an eMarketer projection estimating U.S. digital video ad spending will more than double from $4 billion in 2013 to $9 billion in 2017.

Putting this growth another way, eMarketer’s data indicates that video advertising will go from being approximately 6% of TV advertising in 2013 ($4.1b vs. $66.4b) to about 12% in 2017 ($9.2b vs. $75.3 billion).

A $9b market is relatively small but not insignificant. And as I explained in my earlier post, Google is especially well positioned to benefit from the shift in ad budgets.

More upside?

To add a personal prediction, I think there’s a good chance eMarketer’s forecast about upcoming video advertising growth is understated.

From my experience as a digital ad buyer, video ads have been surprisingly effective, not only for the brand-awareness building for which they were mainly purchased (targeted impressions were the primary goal) but also in terms of tracked view-thru conversions (i.e., online purchases made by people within 30 days of seeing the ad, meaning the video ad was likely at least one factor in the purchase decision).

As more digital marketers experiment with video advertising and as marketing departments overall continue to become more metrics focused, I believe there’s a strong likelihood that the shift to video advertising — and its increasingly sophisticated audience targeting — will rapidly increase.

Online video: eyeballs, headlines and ad dollars

"Airport" by .michael.newman (Michael Newman). Used under a Creative Commons License.

(Photo by .michael.newman)

There’s been one news story after the next about online video.

The stories have ranged from Netflix and Amazon expanding original programming for their respective streaming services (“Arrested Development”, etc.) to DreamWorks Animation buying a YouTube video creator (Awesomeness TV) for $33M, to the ongoing bidding war for Hulu.

Two news stories that especially caught my attention highlight the mainstreaming of mobile video viewing:

  • Verizon Wireless paying $1 billion for rights to expand the NFL games its customers can view via smartphone
  • Twitter and ESPN expanding their collaboration to distribute (and monetize) sports highlight clips

The underlying situation is that online video viewership continues to explode, and more and more of this viewing happens on mobile devices.

Regarding the first part, the numbers are staggering:

  • comScore recently reported that 181.9 million Americans watched 38.8 billion online content videos in April 2013
  • YouTube’s monthly global audience is now 1 billion unique visitors. According to YouTube’s official blog, this audience watches “more than 6 billion hours of video each month on YouTube; almost an hour a month for every person on Earth and 50 percent more this year than last.”

The shift to mobile is also remarkable:

  • YouTube says that its traffic from mobile devices tripled in 2011, and 25% of global YouTube views now occur via mobile

It doesn’t require a crystal ball to see that news about the online video industry will continue to come rapidly. It’s a young, growing industry with a shifting landscape (e.g., Viacom’s recent licensing of exclusive streaming rights for Nick Jr. content such as “Dora The Explorer” to Amazon).

One story we’ll surely hear more about:  increased ad dollars flowing to online video.

The shift of ad dollars from TV has been on the slow side but that’s changing as more advertisers are becoming – or are being made to become – more comfortable with online video. Inevitably, as the saying goes, ad dollars follow the audience.

eMarketer estimates US digital video ad spending will more than double from $4.14 billion in 2013 to $9.06 billion in 2017.

Truck loads of cash heading toward Mountain View

Google should continue to be a big winner in the competition for these growing ad dollars. Foremost because they own YouTube, the single largest platform, but also because of their existing search-ad relationships.

And very importantly to me as an advertiser, they offer the most innovative ad products. (I previously posted a similar opinion)

These products belong to YouTube’s TrueView category of video ads, a distinguishing feature of which is that advertisers only pay when viewers don’t choose to skip their ads.

An example TrueView ad format I particularly like is called “in-stream.” These ads appear before or during another video on YouTube. Viewers are required to watch the first 5 seconds of the video ad, and then have the choice of continuing to watch it or to skip it. Advertisers only pay when a viewer watches for 30 seconds (or to the end of the ad if its length is less than :30). So if an advertiser puts a 30-second ad on the platform, costs are only incurred when 100% of the ad is streamed.

Add robust geographic-targeting options, view-to-conversion tracking capability and the ability to test campaigns with minimal budget, and I have to wonder why advertisers wouldn’t initiate a test campaign with YouTube.

I believe more and more advertisers will start placing TrueView ads once they understand the program better — perhaps driven by more aggressive selling by the AdWords sales team.

As advertisers become more comfortable with the ad formats, a likely result will be the development of more creative customized for online viewing. For example, front-loading content specifically aimed at preventing viewers from hitting the “skip ad” button right after the mandatory 5 seconds of in-Stream ads.

It’s hard for me to imagine Google not gaining a significant revenue boost from the shift to online video advertising in the coming years (especially since I believe the budgets are more likely to transition out of traditional ad formats than out of other digital ads such as paid search).

Halloween Horror Nights videos

 

Halloween – it’s fun, it’s freaky and it’s become a huge business, having grown into the 2nd largest U.S. holiday by commercial activity.

My colleagues and I at Universal Studios are very aware of the ever-increasing passion for the holiday, given our annual event called Halloween Horror Nights. The popularity of the holiday and the event itself has allowed us to expand the number of event nights offered each year, to the extent that the first nights are in now in September.

As quick background: Halloween Horror Nights is held at Universal Studios in Hollywood and Orlando, and features serious scares and gore. It’s not intended for children or the faint of heart.

The teams creating the event attractions pride themselves on authenticity and high production values. There’s a strong movie-industry tie-in, including partnering with film & TV properties for attraction themes (e.g., the very popular The Walking Dead series) and working with movie-industry talent (from makeup artists to film directors).

A recent Wall Street Journal article about high-end horror attractions described Halloween Horror Nights as: “The Grand dame of haunted attractions, this venue is the most popular in the industry and closely watched each year for cutting-edge techniques.”

Digital marketing has played an important role in building awareness of, and excitement about, Halloween Horror Nights. Video is a central element of the digital marketing.

In the spirit of the Halloween season, I’d like to share examples of the online videos we produced for the event this year. Generally speaking, the videos fall into one of these categories:

1. Preview videos

During the summer we release a video highlighting the upcoming event’s main attractions and intellectual properties (IPs).

Prior to the release of this ‘umbrella’ preview video, we also create videos announcing specific attractions and IPs. These videos play well with the event’s core audience that is hungry for the latest news as well as existing fans of the respective IPs (e.g., The Walking Dead or Silent Hill, both featured this year).

2. Guest Reaction videos

During the early nights of the event we film event guests reacting to the scary/gory content and package the highlights into rather entertaining videos.

These videos were unique to the industry in 2006 when we initiated them, but have since been copied in style and approach by our main competitor and others. (To that point, our approach to Preview videos has been copied as well, which we take in the spirit of “flatter is the sincerest form of compliment.”)

An example Guest Reaction video is featured at the very top of this post.

3.  Celebrity Reaction videos

This is a subset of the Guest Reactions video, but feature celebrities — either associated with the featured IPs or who visit the event as fans and agree to be filmed.

The above video of The Walking Dead cast has a little less attraction content than normal because it was filmed at a red carpet premiere (held at Halloween Horror Nights). But it offers Halloween eye candy, pardon the weak pun.

4. “Behind The Screams” videos

We also produce a series of videos looking behind the scenes/”screams” at how the event attractions are made.

The above video features Alice Cooper (who knew he was so funny?). He’s been involved in the creation of attractions (or “mazes,” as they’re known) the past 2 years.

We try to mix up the content to offer new insights each year, for example, previous years’ videos have looked more specifically at makeup and special effects.

5. Television commercial

The television commercial my colleagues produced is of great importance too (of course) and we promote it online.  I am listing it 5th in this list only because I was foremost highlighting the content we create primarily for digital marketing.

In summary..

These videos have played a significant role reaching potential guests on our event website, YouTube channel, Facebook and those of our partners. In  combination they are viewed hundred thousands of times and generate lots of social media interactions (comments, likes, shares).

We also like that they stay live on social media channels year-round, which helps maintain ongoing awareness of the event during the 10.5 months that Halloween Horror Nights is not taking place.

As mentioned above, that our approach to videos has been copied by others in the industry is a compliment — but it also means we need to get even more creative to stay a step ahead.

Meanwhile, I hope you enjoyed the video content and that it helped build the Halloween spirit for you as 10/31 fast approaches. Happy Halloween!

Google’s “win-win and win” situation

eMarketer, Inc. recently released an estimate that Google is on pace to take the top spot in US display ad revenue in 2012.

This would earn Google its first digital advertising triple crown: leadership in US paid-search ads, mobile ads, and now display ads.

According to the Wall Street Journal, “Advertising executives said the eMarketer estimates are something of a surprise given that Google is best known for its search ads.”

Not me — no surprise here. I oversee a digital ad budget and have seen the shift to Google mobile and display ads firsthand.

However, the news has made me think about why Google is outpacing its rivals.

Clearly Google has made large, well-known investments that are fundamental to its growth beyond search ads, such as the purchases of DoubleClick and YouTube and the creation of an ad network (enabling it to sell ads across a stable of third-party websites).

But from my experience there are also numerous things Google does at a practical level that are less headline grabbing but which are relevant to people who decide how to allocate digital ad budgets.

Google’s approach to video ads – a fast-growing segment of the display ad market – offers a great product-level example of many of these things, including:

1)   Easy to justify a test budget

While other video ad pitches were based on TV tradition, Google offered an alternative: ads that viewers can skip by choice and which advertisers only pay for when not skipped.

If I only have to pay when a viewer actually watches the ad, why not run a test campaign?

2)   Easy to advocate

The ‘no play means no pay’ model also makes it easier for digital ad managers to sell the relatively new concept of online video advertising to internal stakeholders.

“We only pay when someone chooses to watch our full 30-second ad” is a very convincing statement and allows the person saying it to speak confidently.

3)   Easy to implement

Campaigns are quickly initiated and implemented in the AdWords system, using the same log-in many advertisers already use for paid-search ads.

Google also offers a lot of ‘how to’ information – how to set up campaigns and define audience targets, etc. – including helpful tutorial videos.

4)   Easy to like the end-user experience

If users can select whether or not to watch your video ad, then those who view it are much more likely to do so in a positive and more receptive mindset.

Offering a better user experience is one-third of the user/advertiser/company “win-win-win” that Google first embraced when it introduced the notion of relevancy to paid-search ad rankings many years ago (as opposed to simply selling to the highest bidder).

Heaven help the yahoos

In my opinion it’s difficult to see how any competitor will slow Google’s growth in the major digital-ad categories.

The competitive advantages gained from owning and integrating ad technology’s murderers row – DoubleClick, YouTube, AdMob, etc. – are obvious.

It’s also obvious that the company is committed to, and invests heavily in, innovation.

And unlike many other examples in corporate history, there’s no sign that the access to resources and/or its past achievements engender complacency at Google.

In the case of video ads, YouTube is 20x larger than the world’s second largest video platform but that hasn’t stopped Google from offering innovative ad products and then continuing to tweak them for improvements (and recently increasing the number of format options from two to four).

Google’s competitors are, of course, beyond aware of these topics.

But in my experience as an ad buyer, there are important things Google does that its competition doesn’t fully grasp, such as how much better Google’s account teams are at partnering with large clients and selling new opportunities.

Nor this simple reality: how much easier Google makes it for me to give them more of my advertising money.