$137.8B U.S. ad spend for top 200 advertisers
Despite the success of Netflix, YouTube, Hulu and other digital companies, the digital video business is like a young person in college. It's maturing, but not yet wise. It can act like an adult, yet still be chaotic. It's hard to predict. Most importantly, it's still hard for others -- in this case, marketers -- to fully understand it.
As an industry, we're not where we should be today when it comes to digital video. We've barely made it through our freshman year, unsure of what our major is -- and many of us cannot conceive what we want to be when we're "grown up." We have no idea how to do our own laundry, and most of all, we have no clue who we truly are yet and what we stand for.
So how can everyone in the industry mature their digital video strategy and online content? The same way many of us achieved the premium content we have today: through a mix of learning, adapting and, most importantly, long-term investment.
Tech companies need to stop thinking that making digital video is easy. We need to stop thinking we can create content with existing teams. More importantly, we need to stop thinking it's all about disrupting the current linear TV media model.
Collectively, we need to focus on the content -- i.e., the story. We know that marketers want to find shows that cut through the clutter and have the potential to build consumer engagement and loyalty. This is achieved in many ways, the primary one of which is simple and resonates with all human beings: storytelling. Netflix has done this extremely well with "House of Cards." So has HBO with "Game of Thrones," and AMC with "Mad Men," to name a few. The creation of high-quality stories is what touches people and makes them come back for more.
As such, digital video businesses need to work with Hollywood, not against it. Shows like "Game of Thrones" do not manifest in a vacuum. It takes an army of like-minded people, working together, to create a beautiful show filled with rich stories. Netflix understood this with "House of Cards" -- and others should pay attention. Digital companies -- Microsoft included -- tend to think that data and targeting are enough. That's a fallacy. The story must stay at the center, and to do that, content creators have to work with the people who have done this for years on television and in the movies -- and then build upon that digitally.
We also need to recognize that original content creation is hard and it takes time. As the leading networks have come to understand through decades of experience, there are a lot of misses before you get a hit. Just because a show doesn't work initially, or you can't find ways to resonate with a specific audience the first time, it doesn't mean you never will.
Digital companies also need to remember that TV interactivity at large scale is still in its infancy. It's amazing what mobile devices, tablets and consoles have done to change the way audiences consume content. You see it during live special events and even when you watch your local sports team. But there is so much more to a second screen experience than 140 characters. Marketers haven't scratched the surface of what is possible. There is much more to come.
Most importantly, we can never forget who's watching on the other end of the screen. Digital media providers need to be aware of the changes in media consumption habits and the ever-fluctuating whims of millennials. No one has the complete formula figured out yet. We all need to be in it for the long-haul, and listen and adapt to the audience.
This is mile two of a long marathon. There are plenty of players, but it takes grit, fortitude, a strong plan, and a willingness to listen to the audience and take chances to succeed.