What Monopoly Can Teach Us About The Video Business
by William A. Lederer , Friday, August 5, 2011
While audience viewership, available content, ad inventory, and time spent are all surging, the online and mobile video industry continues to experience ownership consolidation. In thinking through video industry next steps, I am reminded of lessons learned from playing the board game Monopoly with friends and family long ago during the lazier days of summer.
Lesson #1: Location, location, location. I’m not talking about physical location, rather an advertisement’s or video’s proximity to the right audience in-context. Trust and relevance are paramount to attracting and keeping audiences, whether you are delivering content or advertising. You still have to offer the right message and deliver it optimally, but without the right location — as all good “Monopolists” know — you will rarely reap “green” results from “pale blue” properties.
Lesson #2: Don’t over-improve your property. Online video is not about going for broke on just one option; produce more and different content or ads, instead. This is akin to focusing all your hotels on Park Place and Boardwalk — or worse (e.g., Baltic and Mediterranean). While you have nice, shiny hotels, you can be handicapped by having virtually nothing else on which to collect rent. With online video, experiment until you get it right. This is not TV for now. You should not suffer from high production costs, decision-making barriers, elapsed time, or meddlesome middlemen. Take a few calculated risks in content, audience, and buys and build from there.
Lesson #3: Start slow and then build up while, constantly looking for great deals. You need not and should not put money down on every opportunity. Be selective of video inventory as to quality and relevance, always keeping in mind that someone may be coming behind you to seize what you may have neglected. While prices and rents in Monopoly are fixed, video requires both buyer and seller to be aware. Great deals and not-so-great deals exist at nearly every turn.
Lesson #4: Know your numbers. In video, as in Monopoly, an analytical approach bears the most fruit. Understand how success is best measured in the most relevant way for you. Determine your key performance metrics. What drives them? Creative? Format? Distribution? Technology? Audience? Category? Placement? Social Media? Virality? Frequency? Effective Reach? Engagement? Effectiveness? ROI? The buy? Optimize your results to the best of your ability. Most importantly, know the limits of your budget. Running out of money will leave you mortgaging your properties or worse.
Lesson #5: Luck cannot be underestimated. Strategy and skill can overcome poor execution and relative access to capital, but luck, the roll of a dice and the poor choices of one’s competitors or suppliers, can count for a lot. Landing on “Free Parking” or one’s own properties can revitalize oneself when built-up monopolies challenge us at every turn. Maximize the likelihood of achieving and seizing upon your own luck. For online video, as in all other business, chance favors the prepared mind.