Month: May 2016

From passive to active

Even though it is a behemoth today, YouTube started from humble beginnings. Former PayPal employees Steve Chen, Chad Hurley and Jawed Karim launched the service from an office above a pizzeria and Japanese restaurant in San Mateo, California. Originally created from a need to easily find video clips of Janet Jackson’s infamous Super Bowl incident, it is now a household name. In May 2005, 15 months after its pizzeria and Japanese restaurant days, the service launched its beta version. By September of that year, YouTube had its first one-million view video: a Nike advertisement featuring Ronaldinho. And today, YouTube is still huge, but it faces some stiff competition for video advertising.

A low-resolution point-and-shoot camera captured footage of soccer star Ronaldinho pulling spectacular stunts with his new Nike cleats. The video clip met the quality standards of the time. As far as we know (although even this became a point of debate on discussion forums), there was no post-production work. In an era where most online video clips were shaky and grainy at best, it was a perfect fit.

But it signalled something much more important: a major international brand was prepared to experiment with an unknown platform that housed sub-par amateur videos, before the platform even officially launched. It wouldn’t take long before other brands followed suit. And since that pivotal moment (though not because of it), YouTube became the Internet’s number one destination for video and has held that spot ever since.

YouTube remains the perfect place if you’re looking for specific video clips. It’s the main reason we use it and why it’s now the second-largest search engine. It’s where consumers go to actively search and watch videos they want to consume at that specific moment, on a specific topic. It’s a user-controlled process that facilitated the shift from passive to active video viewing. Want to see The Daily Show poke fun at Canadian politics? A quick search will return plenty of content to consume, notably this most recent gem:

From active to passive

While YouTube will continue to serve as the Internet’s number one choice for active viewing, the growth and omnipresence of Facebook video has brought passive viewing back from the brink. What’s old is new again. For half a century, we consumed video content in the form of television (and television ads – usually 30 second spots we were forced to watch between segments of Gilligan’s Island or The Golden Girls). With the world spending 20 minutes per day on Facebook, and mostly on mobile devices, it is the platform of choice for marketers and communicators. But, while you can pay to have your video appear in your audience’s newsfeed, you can’t force people to watch it. A swipe of a thumb, and your video is out of sight and out of mind. And that means you need to write and produce your creative specifically for the platform on which it will air.

For example, take a look at that 2005 Nike video clip and ask yourself whether it would have any chance of gaining traction on Facebook in 2016. The first thing you’ll notice is how long it takes to get to the point. We have to watch a Nike rep walk onto the field, present the cleats to Ronadlinho, then watch the star tie up his cleats before he finally takes the soccer ball and get started with his impressive performance. It’s a slow and boring start. It takes FOREVER. It demands a level of patience people no longer have with the newsfeed experience.

From 30 to three seconds

Let’s be honest, after seeing the first three seconds of the video, you’d scroll down the feed in search of your dopamine hit—it is utterly boring in those first three seconds (which is the length of time Facebook uses to count a view). By Facebook’s own account, people spend 1.7 seconds with a piece of content on mobile. Every second matters. In fact, it takes only 0.25 seconds of exposure for people to recall content they saw on their mobile feed. These initial seconds can make a profound impact. When people watch the first three seconds of a Facebook video, 65% watch the next seven seconds, and 45% make it to the 30-second mark. It’s a rude awakening for those of us used to producing 30 second spots to get our message out. In an environment that allocates a whopping 1.7 seconds to make a lasting impression, we must adapt, meet people’s evolving expectations, and stop the thumb. So, how can we stand out in the news feed?

How to make three seconds count on Facebook

1. Storyboard with mobile in mind

Keep the mobile experience in mind from the moment you begin storyboarding and scripting your video. If you don’t have the luxury of starting from scratch, modify your existing or planned creative to connect more effectively with mobile users. It works. Facebook tested this theory with select brands, putting a TV version of the ad against a mobile-optimized version. The latter moved the brand mention 25 seconds earlier and saw a seven-point increase in ad recall; a 68% increase in the number of three-second views; and 136% increase in 10-second views, compared to the original.

2. Capture attention right away

Use brand colours and imagery in the first frame to help people connect to your brand immediately. If you’re selling a product, start your video with a product shot. If you’re selling a political candidate, put your candidate at the start of the video. If appropriate, use action scenes to capture people’s attention from the get-go.

3. Tell a story

Video is an emotive medium. It evokes emotions and connects people with your brand, your product, or your campaign. If you’re going to promote your video on Facebook, you need to keep the (palm-sized) screen in mind and the reason people are on Facebook to begin with: they want to connect with people and consume content about people.

4. Frame for mobile

As much as I prefer a widescreen format to tell a visual story, it just doesn’t work well inside the boxy dimensions of mobile newsfeed frames. If you are framing the story for mobile feeds, you are giving due consideration to dimensions, crops, zoom and visual composition that work best in that box. Tell your story for the super small screen, not the silver screen. Doing so could give you a three-point increase in ad recall and an eight-point increase in message association.

5. Use visual cues and subtitles

Most people listen to Facebook videos with the sound off. They will only turn their sound on if your video captures their attention. If you can’t achieve that through visual composition and brand imagery at the start of the video, consider adding subtitles so users can see what the video is all about without having to turn on the sound. Facebook found that 76% of videos require sound to be understood. Make your video understandable without sound and you’ll be leading the pack.

6. Test and iterate

All the theory in the word will only take you so far. You’ll never fully understand how your audience consumes video until you put video in front of them. So, get to it! Test your concepts, make some tweaks and test some more.

As part of its internship program, Navigator asks its interns to write a blog post about the intersection of communications and an area of personal interest. This week’s post is from Connor Whitworth.

Do you gamble? With gambling, you make a bet on a potential outcome. If you’re correct, you are rewarded for predicting that outcome. You get some money. You feel like you won. The more certain you are of a particular outcome, the more money you’re willing to bet. People bet on all kinds of things — on horse races, on sports games, on cards.

Prediction markets differ from traditional market research. Rather than asking questions like, ‘what do you prefer,’ or ‘which would you rather,’ prediction markets ask, ‘what do you believe is going to happen,’ or ‘which product do you believe has a greater likelihood to succeed.’ In this scheme participants in the market, play with real money and invest in their opinions.

Essentially, prediction markets are bets to see who is ‘the most right’. Participants form a market by agreeing to wager their predictions against each other for a predetermined amount of time. When that time passes the ‘market’ closes and their scores are tallied. Once closed, predictions end with a numeric value that relates to the other predictions or derivatives. If you invest early, aka predict early, and others make the same prediction, you see an increase in profit. Conversely, those who predict incorrectly see the value of their investment decline.

Outside of finance, prediction market principles can be applied to analyze public expectations.We’ve already seen the wisdom of crowds harnessed to predict political outcomes. In 2013, David Rothschild, an economist from the Wharton School of Business, published an academic study with some interesting findings. Over the last 60 years, poll questions asking people which candidate they believe has a better chance of winning consistently act as a better guide to the outcome of the presidential race than polls that simply ask people for whom they plan to vote (for interest’s sake, Bernie is currently going off at 16/1 on popular European betting site PaddyPower.)

In politics, predictive markets are powerful tools but they’re not new. In fact, prediction markets are among the oldest exchanges in America. Over the last decade we’ve seen a resurgence of prediction markets in Canada after they fell out of favour in the late 1990s. The Sauder School of Business at the University of British Columbia operates a political prediction market covering a wide range of events. It has four objectives:

1. Accurately predict the outcomes of political events;
2. Learn about trader behaviour in a controlled environment;
3. Engage traders to follow the political process more intensely; and
4. Teach participants about financial markets and trading strategies.

Its predictions are often more accurate than public opinion polls. In the October 2015 Canadian federal election, the Sauder Political Prediction market was the most accurate body using models to predict the Canadian popular vote, it operated with a margin of error equaling only 2.3%. The next closest body, a scientific polling firm, had a margin of error of 4%.

And now, individuals are capitalizing on collective intelligence to better large corporations. An increasing number of companies are turning to predictive markets to gauge the future success of products, concepts, promotions and campaigns.

The California Institute of Technology found that Hewlett-Packard’s masterful use of prediction markets produced forecasts that were closer to the actual outcome for 6 out of 8 events in its model. HP’s data scientists were able to distill large business problems into a series of smaller, easier to conceptualize questions. Running simultaneous prediction models of those smaller questions allowed them to understand how the larger issue was most likely to unfold. Hewlett Packard is only one corporation using prediction markets today. Companies such as Motorola, Intel, Best Buy, Microsoft, Google, and Pfizer all use internal prediction markets to determine which new products will be among their best sellers, as well as other initiatives.

So, can scientific-polling be manipulated to include the accuracy of prediction markets? Perhaps Dr. Rothschild is on to something. Prediction markets could be used to guide companies, rather than making decisions on gut-feelings or educated guesses. In the United States, prediction market sites have had legal difficulties with The Commodity Futures Trading Commission. Some consider prediction markets a form of gambling since they allow people to earn money by predicting the outcome of future events. That said, whether or not people decide to bet on a prediction has no impact on that prediction’s accuracy. Prediction markets can still be a valuable prognostication tool, regardless of how they are regulated.

Whether Bernie Sanders will be the Democratic Nominee for President of United States in 2016 is a political question that is sure to interest many corporations. More importantly, it is the type of question that can be easily applied to a predictive market. Assuming the prediction is Sanders will be the nominee, the derivative would be redeemable for a certain amount if Bernie wins a number of Democratic primaries but worthless if he is not chosen as the eventual nominee. Up until the convention on July 25th, this derivative or bet can be traded on a prediction market and, as such, will command a fluctuating market price. In this case, Sanders’ performance in the primaries leading up to the convention affects the derivative or how much you would win for betting that, yes, he will be the eventual nominee at a given point in time. If Sanders is doing well in the primaries, betting on the prediction that he will be the nominee is safer and therefore pays less, while a poor primary performance would make that prediction riskier with a higher derivative and larger payout.

American politics actually has a rich history of prediction markets. By the 1870s political predictions had evolved into a semi-formal financial market. The Economist suggests that trading volume began to approach that of actual shares: in 1916 $10 million ($218 million in today’s prices) was wagered on the photo-finish presidential race between Wilson and Hughes. While the markets were wrong that year, incorrectly predicting a win for Hughes; they were correct in accurately forecasting the next 11 contests. In an era without reliable polling, the newspapers diligently reported on presidential betting odds, publishing the lines five-days-a-week in the months before an election.

Crackdowns on unauthorized gambling drove political bookmakers into the ground. However, the final nail in the coffin for political prediction markets was reputable, scientific public-opinion polling. Other forms of gambling were also a factor: the Economist highlights that when betting on horses became legal it allowed ‘punters to slake their thirst for action dozens of times a day rather than once every four years, without any risk that a bookie would fail to pay out.’ By the 1940s what was once an eight-figure market place had nearly disappeared.

Today the internet makes it very easy for political junkies to bet on campaigns. Most of these are traditional betting markets where the wager is on the eventual outcome with relatively stable odds. Prediction markets where wagers are placed on a given opinion of what an eventual outcome will be have much less stable odds and probably do exist somewhere online. With corporations beginning to apply prediction markets to situations outside of politics, the potential for prediction markets is endless.

So what happens if prediction markets become a go-to source for forecasting data? With improved predictive capabilities, companies and organizations could fine-tune their marketing and targeting even more. Being able to accurately predict the next trend, the best-selling product, or the next political leader, would have big implications for a number of industries and sectors. Being able to wager on those predictions opens up a whole other can of worms in terms for ethical, legal, and profit lines. That said, if the data surrounding predictive markets continues to be more accurate than traditional polling, they will no doubt experience a resurgence in popularity.

Since crystal balls went out of style, pollsters, marketers, weatherman, and shamans have been looking for the newest way to accurately peek into the future. Maybe today it’s prediction markets? There likely will not be a return to 1870s style ‘what if’ gambling. Prediction markets could become the next big thing. Wanna bet on it?

Photo: John Hoey, Thisonesforruthie