China's first cross device study on online video. Dive Video explores online video from 2 angles: advertising and content. We explore the online video user journey, online video triggers, and what kind of online video advertising works best.

2. OMD Copyright 2015

3. Welcome to Dive Video, the third and final installment of the OMD Dive
Series Trilogy. We started the DIVE Series in 2014, to investigate and
demystify the biggest challenges facing the China marketers. In that spirit,
we chose Social, Mobile and now Video.
China’s digital video market has evolved swiftly. CNNIC report for 2014
pegs digital video viewers at 461 million and is expected to cross 500
million this year. This has been complemented by sky rocketing ad spend
on digital video—eMarketer forecasts it ill hit RMB 25 billion in 2015. The
exponential growth of both users and ad spending have brought new
challenges to all of us.
We found that current studies mainly focused at the superficial level on
digital video: ad spend and time spent. However, as video becomes the
main diet of entertainment across demographics, it was important to
understand not only the consumers’ motivations and attitudes, but also
how effective it is a medium.
We started this project last year hoping to unravel and interpret those
mysteries. Our objective was to uncover the answers for all
stakeholders—Advertisers, Video sites as well as Agencies. For this we
used a two pronged research approach that leveraged proven and tested
research methodologies with latest technology based (cookie and SDK)
methods.
For the 1st phase we partnered with Admaster using tags for our client’s
campaigns. This enabled us to map device, location as well as frequency of
exposure. This is the first cross device study in China that measures
advertising effectiveness with real campaigns. It has given us and our
clients real data to plan & optimize video campaigns across devices as well
as guidance for online video sites on how to monetize their inventory.
For the second phase, our objective was to understand the consumer
journey towards watching a video. What are the motivations, what are the
barriers and more importantly what can an advertiser or video owner can
do to influence it? Dive Video will also tell you consumers’ preference
towards content, why shows become big and how niche video sites have
an edge.
We are very grateful to our sponsors—Sohu, PPTV, Youku, Tudou and
LeTV for their support for this initiative. We also owe our gratitude to our
media partners who provided us with inventory for the research. Most
importantly, our thanks go to our clients across OMG whose campaigns
were part of this path breaking research. Lastly, I would commend our
research partners: Mintel & Admaster for being part of Dive Video.
Dive Video will unravel all of the mysteries in the industry, clarifying the
best way to use video for advertisers, video sites and agencies. It provides
the roadmap for both those who are producing and promoting content as
well as those advertising across different devices.
We are now proud to present our research: Dive Video. I hope you find
Dive Video inspiring and useful in the next phase of improvement of Video
marketing and advertising.
BHASKER JAISWAL
Managing Partner—Business Intelligence, OMD CHINA
FOREWORD

4. Thank you to our participating brands, sponsors and contributors.
SPONSORS CONTRIBUTORSBRANDS

5. 5
Netizens spend 80 minutes a day
watching online video
67% of all internet users watch online video
Source: iMediaMatrix, CNNIC

6. 6
The average number
of online videos we watch
a week13
Source: iResearch 2015

7. Digital adspend is shifting to video
38.6% 36.8%
25.2% 25.7%
20.0% 24.8%
0.9%
0.8%
15.3% 11.9%
Q4 2012 Q4 2014
7
PAID
SEARCH
BANNERS
VIDEO
EMAIL
OTHERS
Source: Analysys International Enfodesk, “2015 China Digital Advertising Marketing Report” March 3 2015 via eMarketer

8. 0
2,000
4,000
6,000
8,000
10,000
12,000
2007 2008 2009 2010 2011 2012 2013 2014
ADSPENDCNYMillions
Video Ad Spend
Adspend growth
has exceeded expectations
8

9. We talk about online video a lot
9
But maybe we’re not asking the right questions

10. There are many challenges
to doing online video “right”
10
CONTENT ADVERTISING
No tracking of competitors
and limited postbuys
Data is not robust
or does not exist
Vendors struggle to
price online video inventory
across devices
Limited understanding
of differentiation of OTV channels
Little understanding
of OTV consumer journey
No clear trends
on what drives OTV viewership

11. 2 prong approach
11
Using AdMaster’s tracking tags and SDK codes
we tracked 17,500 consumers and measured
their exposure to our ads, mapping them to
device, location and OS. We then surveyed
them to measure consumer response to
advertising.
1
ADVERTISING
Tracking and Survey
2
CONTENT
Qualitative and Quantitative Study
Working with Mintel we conducted qualitative
and quantitative research across Tiers 1-4,
querying 2,300 consumers on their OTV
watching habits

12. 12
Online video is our
leisure activity
of choice

13. Leisure time is equally spent offline and online,
with lower tiers spending more time online
ONLINE
49%
OFFLINE
51%
13
46%54% 52%48%
TIER 1 TIER 2
51%49%
TIER 3 & 4

14. Boredom is the great OTV trigger
14
34%
19%
7% 6% 5% 5% 5% 4% 4% 3%
REASONS FOR WATCHING OTV

15. 15
When I’m free, I usually watch OTV to kill time,
so I won’t be so bored.
(Female/22/Shanghai)
BOREDOM
It’s impossible to have no work pressure. When my boss curses
during a meeting, or when I'm not meeting business targets,
I feel pressured and will watch OTV to relax.
(Male/44/Shanghai)
PRESSURE
Watching OTV can broaden my world view, for example, I
can see the overseas scenery I’ve never seen before.
(Male/20/Zhongshan)
INFORMATION

16. The majority of our leisure time
is spent on OTV
16

17. 17
Online video watching
is habitual

18. Most of us already know
what we want to watch before we start
18
KNOW 69%
DON’T KNOW 31%

19. Our habits vary by device
19
KNOW
DON’T
KNOW
71%
29%
64%
36%
53%
47%
74%
26%

20. We basically use the same device
everywhere but home

21. But we still watch OTV most at home
21

22. We have our favourite apps
22
22%
22%
15%
8%
7%
6%

23. Dominant players have the trifecta
of loyalty, time spent and videos watched
23
Phoenix
Sina
Ku6
LeTV Tudou
Sohu
PPTV
Tencent
iQiyi
Youku
-50
0
50
100
150
200
250
300
350
400
0% 10% 20% 30% 40% 50% 60%
WEEKLYTIMESPENT
LOYALTY
BUBBLE SIZE=VIDEOS WATCHED A WEEK

24. Habit and user experience
drive our platform choice
24
41%consistently choose their
favourite video platform
above others because they
“just got used to it”
6%
7%
9%
12%
13%
15%
15%
17%
17%
24%
32%
41%
Ability to upload my own clips
Clear interface and layout
Has exclusive rights for an OTV show
Easy to navigate
Has all kinds of programs
Has many of my favourite programs
Ability to download programs for later
Has much less ads
Regular updates for shows
High definition picture
Smooth playing
Just used to it
USER EXPERIENCE
CONTENT

25. Different sites attract audience for
different reasons
25
Just get used to it
Smooth playing
High definition picture
Regular and timely updates for its
programs
Much less ads

26. Tier 1 have far more sophisticated needs
than the lower tiers
26
TIER 1 TIER 2 TIER 3 & 4
Just get used to it
Smooth playing
High definition picture
Regular and timely update for its programs
Much less ads
Can download the program for later watch
It contains many my favourite OTV programs
Have all kinds of OTV programs
Easy to navigate
Have exclusivity right for OTV program
Clear interface and layout
Can upload my own video clips to the APP
Can make my own comments while watching OTV
Screen lock

27. 27
Content
differentiates
niche players

28. People actually want a few key
things from the online video content
35%
33%
29%
26%
19%
18%
16% 16% 16% 15%
12% 12%
11%
7% 7%
28

29. Content people want is
relatively the same everywhere
29

30. Shows that pique our interest
have a few core elements
30
Funny
A good story
New ThemeClose to real life
Celebrities
RunningMan
I'm a Singer
Happy Camp
Where are you going
Daddy?
Hua Qian Gu

31. But content isn’t
a great differentiator
31

32. Niche players need to rely more on
self produced content
32
Youku
iQiyi
Tencent
Tudou
Baidu
Sohu
LeTV
360 Video
PPTV
Sina Video
Bilibili
Ku6
China Internet TV
Phoenix
Popcorn
60
80
100
120
140
160
180
200
220
240
0% 5% 10% 15% 20% 25%
INDEXSELFPRODUCEDCONTENTASA
PLATFORMCHOICEDRIVER
SITE WATCHED MOST OFTEN

33. 33
Winning an audience for content
requires an offline-
online approach

34. Offline and online play an
important part in how we discover shows
34
41%
37%
32% 32%
24%
16%
10%
7% 6% 5% 5%
SOURCES YOU LEARN ABOUT OTV PROGRAMS

35. Different devices have
different push media
35
Search
Friends
OOH ads
Friends
TV Ads
TV Entertainment
Programs
Search
OTV Platform
Social media
Search
Social media
OTV Platform

36. However, positioning on an OTV platform
is key when users don’t know what to watch
36
HOW DO YOU FIND OTV TITLES IF YOU DON’T KNOW WHAT TO WATCH?

37. Tier 1 non-deciders use more
diverse ways to find content
37

38. 38
Video ads
are effective
but only in certain forms

39. OTV ads are preferred
over a multitude of formats
39
MOST ATTRACTIVE AD FORMAT
24%
23%
21%
19%
18%
15%
14%
13% 13%
12%
11% 11%
7%
6%

40. OTV ads also perform better
than TV in many factors
40
RELEVANCE
TRUSTWORTHINESS
55% 45%
46% 54%
VARIETY 63% 37%
INTRUSIVENESS 60% 40%
VS.
TVOTV

41. But OTV ads are the number 1 cause
of dissatisfaction for OTV platforms
41
0%
10%
20%
30%
40%
50%
60%
70%
80%
Fees Content User
Experience
Ads
Fees Content User Experience Ads
Too Many
Ads
52%Ads run for
too long
24%
Too much
repetition
24%

42. NEUTRAL
Just wait until its over
Mute the speakers
Rest my eyes
Watch the ad absentmindedly
Click on ad if it features
interesting products
POSITIVE
Go to the bathroom
Do something else
Just walk away
Grab some snacks
Make a cup of tea
Have a quick smoke
Switch platforms
Open another website
Start another OTV program
Play with mobile phone
NEGATIVE
Reactions to OTV ads are
overwhelmingly negative
42
87%
6%
7%

43. We distract ourselves
during adbreaks
43

44. 10%
13%
11%
Product Recall
58%
47% 47%
Ad Recall
The time we spend watching
mobile ads is the most effective
8%
13%
13%
Purchase Intent
44
22%
26%
29%
Brand Recall
PC Smartphone Tablet
CONSUMER RESPONSE TO ADVERTISING BY DEVICE

45. 15s video ads outperform 30s ads
across all brand metrics
63%
25%
14%
9%
48%
18%
5% 6%
Ad Recall Brand Recall Product Recall Purchase Intention
15s 30s
45

46. This is even more pronounced
on mobile devices
46
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
PC Smartphone Tablet
PURCHASE INTENT
15s 30s
0%
2%
4%
6%
8%
10%
12%
14%
16%
PC Smartphone Tablet
PRODUCT RECALL
15s 30s

47. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1 2 3 to 5 6 to 10 11 to 15
AD RECALL
Increased frequency does not
always lead to uplift in recall
47
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1 2 3 to 5 6 to 10 11 to 15
BRAND RECALL
PC Smartphone Tablet

48. Nor does it drive increase
in product recognition
48
0%
5%
10%
15%
20%
25%
1 2 3 to 5 6 to 10 11 to 15
PRODUCT RECALL
0%
5%
10%
15%
20%
25%
1 2 3-5 6-10 11-15
PURCHASE INTENT
PC Smartphone Tablet

49. 49
Online video is our leisure activity
of choice1
Online video watching is habitual
2
Content differentiates niche players
3
Winning an audience for content
requires an offline-online approach4
Video ads are effective,
but only in certain forms5

50. 50
Implications for advertisers
Frequency capping
is necessary for
efficient campaigns
1
Shorter ads have
better ad, brand
and product recall.
Maximize OTV
efficiency by utilizing
15 second ads
2 3
Mobile (tablet and
smartphone)
is a key device for
advertisers;
promotional
campaigns need
heavy mobile support
4
OTV ads still perform
better than almost all
other media. All
digital campaigns
should have a video
element
Branded content
needs support from
outside the
OTV ecosystem
to ensure viewership;
use search and social
to bolster views
5

51. 51
Implications for OTV platforms
Develop flexible
monetization and
pricing models for
mobile ads to reflect
consumer response to
different devices,
frequencies and
length
1
Promote OTV content
off platforms,
and ensure shows
you want promoted
have homepage
visibility
2 3
Niche players need to
focus on delivering
exclusive content
and advertising it to
break habitual
viewing habits
4
Improve user
experience. It
can still differentiate
channels, especially
amongst competitors
within the same
space
Ensure OTV-made
content hit
at least 3
of consumer content
needs5

52. Much more
CONSUMER
DEVICE
PREFERENCE
DEEP DIVE
CONSUMER
CONTENT
PREFERENCE
BY DEVICE
CONTENT
DISCOVERY
BY TIER AND
DEVICE
ONLINE
VIDEO AD
RESPONSE
BY
CATEGORY
ONLINE
VIDEO AD
RESPONSE
BY
AUDIENCE
FULL
USER
JOURNEY
Much more

53. CONTACT US
Jeanette Phang
Jeanette.Phang@omd.com
DIRECTOR- BUSINESS INTELLIGENCE
Bhasker Jaiswal
Bhasker.Jaiswal@omd.com
MANAGING PARTNER - BUSINESS
INTELLIGENCE
Alessandro Pang
Alessandro.Pang@omd.com
DIRECTOR- BUSINESS INTELLIGENCE