*Report conducted & published by Yahoo! This report lays out the process we are taking at Yahoo for understanding a major digital daily habit—Online Video—and for developing products and creating opportunities for advertisers to engage in consumers’ daily lives. Topics discussed include: 12 Digital daily habits, pg 3

1. Why Online Video is a Daily Habit
Yahoo Insights Team
December 2013

2. Why Online Video is a Daily Habit
Yahoo is making the world’s digital
daily habits inspiring and entertaining
In this pursuit, we are utilizing ever-growing
stores of data to understand how and why
consumers utilize the digital realm in order
to enhance their lives.
This report lays out the process we are
taking at Yahoo for understanding a major
digital daily habit—Online Video—and for
developing products and creating
opportunities for advertisers to engage in
consumers’ daily lives…
Why Online Video is a Daily Habit
TOP 12 DIGITAL DAILY HABITS
Search
News
Lifestyle
Email
Video
Blogs
Sports
Q&A
Music
Shopping
Games
Socializing
Source: 2011 Ipsos survey tracking
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3. Why Online Video is a Daily Habit
Yahoo holds leadership positions across the
top consumer daily habits, which allows us
to use signals from many different digital
experiences in developing products:
TOP 12 DIGITAL DAILY HABITS
Search
News
Lifestyle
• Two types of consumer behavior signals:
• Explicit (e.g. visits to Sports web pages,
clicks on ads)
• Implicit (e.g. dwell time in the comments
sections of articles, searches for a brand
after seeing video ads about the brand)
• Data across all major platforms—mobile,
tablet, PC—and emerging platforms.
• Spanning content types (videos, articles,
images, search results) and interactive
product experiences (apps, email,
shopping, fantasy football, stock quotes).
Email
Video
Blogs
Sports
Q&A
Music
Shopping
Games
Socializing
Source: 2011 Ipsos survey tracking
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4. Why Online Video is a Daily Habit
As we gather signals and work to make sense of them,
we are asking ourselves:
• How do digital daily habits form?
• Why does a particular digital experience become a daily habit?
In order to understand how daily habits form, we analyzed two approaches to product design:
• Designing for Triggers
• REM model
Through this analysis, we developed hypotheses that we tested in two-phase research with
consumers:
• Engaged with twenty 16-34 year olds about the role of online video in their daily lives using an online
community tool, SparkStream
• Conducted online survey of 1,775 consumers ages 16-44 who watch online video at least several times a
week
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5. Designing for Triggers
In Desire Engine, Nir Eyal’s product design model says habits develop through a cycle that
starts with a trigger initiated by the product...
Trigger – Entices an action by the
consumer
Action – Delivers a reward
TRIGGER
ACTION
Reward – Provides emotional
reinforcement for the action, invites
deeper investment
Investment – Strengthens bonds
with the experience, builds personal
connection and community
INVESTMENT
REWARD
Trigger – The next trigger repeats
the cycle, creating a reinforcing
loop…a habit develops
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6. Designing for Triggers
Let’s look at this cycle using a scenario with Yahoo Fantasy Football...
Trigger – Receive an email from
Yahoo about this week’s game against
your office nemesis
TRIGGER
ACTION
Action – Launch the Fantasy
Football app to find a player to
strengthen your team
3:10 PM
Reward – Discover that running back
Reggie Bush is available and add him
to your team
INVESTMENT
REWARD
Investment – Talk some smack with
your nemesis, building community
Trigger – Receive a notification
about how your nemesis
responded…a habit develops
Reggie Bush
is MINE!
Game on!!!
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7. REM Model
Let’s look at another product development model,
REM:
• Rational
• Emotional
• Meaningful
RATIONAL
Basic everyday needs
• Table stakes—every product needs
to deliver these basics
• Provides sense of trust and control
EMOTIONAL
REM postulates a hierarchy of needs that, if met,
result in habitual behavior. By delivering on each of
these elements, a brand can create a habit in its
consumers.
Engaging and inspiring experience
• This is where a product or brand
differentiates itself from
competitors, in design, voice, feel
MEANINGFUL
Deep connection to larger community
• Creates a social context and feeling
of connectedness
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8. REM Model
Here is the REM model applied to
a well-known brand…
In the late 80s, coffee was a
commodity, until Starbucks turned
it into a product experience
RATIONAL
Basic elements of coffee
• Attributes : steaming hot, iced, caffeinated
• Performance : efficient service
• Psychosocial value : consistency
EMOTIONAL
Coffee shop as an experience
• Sensory : aroma
• Affect : pleasure, stimulation,
local, décor, music, hangout
MEANINGFUL
Deep connection with Starbucks brand
• Self-concept : fair-trade coffee
• Self-expression : personalization
• Personal meaning : “my starbucks”
• Social meaning : sophistication
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9. REM Model + Designing for Triggers
As applied to digital experiences
MEANINGFUL
Feelings people would love to feel daily...
Digital experiences must be socially contextualized,
create significance within a group, and prevent
feeling of missing out
EMOTIONAL
Feelings people want to feel daily...
Digital experiences lead to intrinsic growth, feeling
great, and expressing a better version of self. There
is also a need for inspiration.
RATIONAL
Feelings people need to feel daily...
Table stakes. Digital experiences must provide a sense
of control, safety, and lead to an organized life.
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10. Why Online Video is a Daily Habit
Now let’s focus on online video in the U.S.…
Video is a top daily habit: #5 for PC, #9 for Mobile, #4 for Tablet
According to comScore, each day 85M consumers in the U.S. watch
1.6B streams and spend 1.5 hours watching online video, just on the
PC. eMarketer estimates that 57.7% of the population or 75% of all internet users watch video
online. We wanted to know why and how video got to this place.
The following data pieces together why online video is becoming a daily habit. We have
identified 3 building blocks:
ACCESS – is the rational piece allowing consumers to watch where and when they want
CONTENT – provides the emotional layer that inspires consumers and allows them to
express the best versions of themselves
DISCOVERY – creates social connection and curation through personal digital
experiences, ultimately create meaning for consumers
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11. Video Daily Habit Building Blocks
DISCOVERY
how I find what I watch
CONTENT
what I watch
ACCESS
where I watch
11

12. ACCESS
where I watch

13. ACCESS
Consumers are viewing video across devices
73%
85%
65%
51%
of laptop owners
watch video on them
49%
The average consumer watches video on 4 devices
• 148M people in US now own a smartphone
• 62% of mobile phones are smartphones
• 72M people now own tablets
• Half of all parents own a tablet
• Half of households with income $75K+ own a tablet (eMarketer)
38% of consumers say the ability to watch across a wide range of
devices is important to make a video destination a daily habit
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14. ACCESS
Daily video viewers have doubled in two years
HOW OFTEN DO YOU WATCH VIDEO ON THIS DEVICE?
DEVICE
AT LEAST ONCE A DAY
SEVERAL TIMES A DAY
Desktop
52%
34%
Laptop
65%
47%
Smartphone
61%
38%
Streaming Box
60%
33%
Tablet
57%
31%
Game console
46%
24%
Connected TV
49%
31%
61%
Sorted top to bottom by total video viewers per device
of consumers are watching video daily, across devices;
double the number from two years ago
14

15. ACCESS
Dayparts
The next two pages show how online video usage changes from
one part of the day to the next.
• Mobile video has become important during morning and afternoon
dayparts; mobile video usage remains high during prime time as
consumers multi-task while watching television.
• Video viewing length and discovery modes change throughout the day.
Here is a typical scenario:
We wake up and snack on some quick, curated videos on our social media feeds, and as we
get to the afternoon hours we’re ready for slightly meatier content, but are more open to
discovery. This is when we stumble upon content, and that content comes in short form.
When we move to the evening hours, we lean back and consume more longform content ondemand via aggregators like Netflix, Hulu, and network websites.
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16. ACCESS
Mobile & tablet starting to dominate some dayparts
VIDEO USAGE THROUGHOUT DAY
16

17. ACCESS
Online video is pervasive and adapting to daily rythms
VIDEO USAGE THROUGHOUT DAY
17

18. ACCESS
Reaching viewers where and how they watch
User generated content
Short form
Laptop
Long form
VIDEO CONTENT MIX BY DEVICE
32%
36%
39%
41%
25%
29%
28%
37%
35%
22%
26%
51%
50% of consumers expect to watch online video
content on their TV screens by 2015
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19. CONTENT
what I watch

20. CONTENT
Content is the biggest driver of the video daily habit
WHAT GETS YOU TO USE A VIDEO SITE DAILY?
CONTENT
70%
 43% Wide variety of videos
 26% Videos which are
constantly updated (e.g. new
videos every couple of hours)
20

21. CONTENT
Short Form: Most-watched short clips
SHORT CLIPS: WHICH TYPES DO YOU WATCH?
41%
Comedy
38%
Music
27%
How To
26%
Food
22%
Gaming
Comedy and Music are
especially popular among
16-24 year olds
22%
News
Style
16%
Travel
16%
Design
Video Blogs
10%
10%
21

22. CONTENT
Short Form: “Discovery Mode”
3 in 5 videos are happened-upon as a incidental part of our daily online lives
56%
Laughed
61%
67%
Entertained
of people in
“discovery mode”
watch short clips
What is your mind set
when you are in video
“discovery mode”
22

23. CONTENT
Long Form: Marathon Viewing
With a wealth of newly available TV content,
marathon viewing is on the rise
3 in 5 consumers Marathon View
Regularly watch more than 2-3
episodes of a series in a row
“I have the Netflix Streaming subscription, but
only use the free Hulu service. I generally watch
shows on my laptop, but will stream to my bluray player on occasion. I usually watch one or
two episodes a day and finish the season in
about a week or so.”
- Male, 35
23

24. CONTENT
Growing expectations of “professional quality” video online
80% of consumers
expect TV quality from curated online clips
45%
Will watch TV in a series of short form clips
45%
Expect most of the online video they watch
in 2015 will come from recognized networks
24

25. CONTENT
Expectation of high quality with limited interruptions
WHAT GETS YOU TO USE A VIDEO SITE DAILY?
EXPERIENCE
How do you define quality when it comes to
online video?
65%
High quality video 54%
Limited disruptions 45%
40%
HIGH
LOW
want high definition
video, regardless of
video type
25

26. CONTENT
Ever-increasing range of sources for daily video fix
WEBSITES OR SERVICES USED REGULARLY TO WATCH ONLINE VIDEO
Dynamic Landscape
Apps like Vine are amassing tens of millions
of users within a matter of months
25%
APPS
68%
92%
SOCIAL
NETWORKS
DAILY
VIDEO SITE
50%
TV SERVICES
26

27. DISCOVERY
how I find what I watch

28. DISCOVERY
Many sources of video discovery
HOW DO YOU FIND THE VIDEOS YOU WATCH?
62%
SEARCH/
GO DIRECT/
INTENTIONAL
18%
78%
AD
72%
BROWSING
SOCIAL
28

29. DISCOVERY
Many sources of video discovery
HOW DO YOU FIND THE VIDEOS YOU WATCH?
SOCIALIZATION
50%
Social Network
Word of mouth
45%
Via email or text
36%
People I don't know on social
22%
Tumblr or Blogs
15%
BROWSING
Browsing online
45%
Recommendations while watching videos
34%
Video within article
32%
Website with videos around interests
23%
Sites like Buzzfeed or Upworthy
16%
INTENTIONALLY
Video Aggregator
50%
Search Engine
36%
VIA AN AD
An Advertisement
18%
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30. DISCOVERY
Sharing today: Staying connected & starting conversations
WHY DO YOU SHARE VIDEOS ON SOCIAL NETWORKS?
59%
Share online video on
social networks to
connect with friends
and family
45%
Share videos on
social networks of
relevance to my
friends & family
Women and casual users
mostly share videos to
amuse friends and family
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31. DISCOVERY
Sharing in the future: Will have to meet a higher bar
IN 2015, THIS IS WHERE I EXPECT ONLINE VIDEO TO BE…
49%
say that people will be more
selective about videos they share
Only 33%
expect the Facebook
news feed to be
dominated by video
31

32. DISCOVERY
Video discovery approach varies with content type
HOW DO YOU FIND THE VIDEOS YOU WATCH?
Online
video clips
Originals
Music
videos
TV
programs
Movies
Word-of-mouth
39%
29%
32%
33%
33%
Search engine
36%
25%
28%
24%
22%
Video aggregator
45%
27%
38%
23%
21%
Social network
42%
24%
31%
21%
19%
Just browsing
41%
24%
30%
18%
17%
32

33. DISCOVERY
Consumers expecting aggregation, curation, personalization
IN 2015, THIS IS WHERE I EXPECT ONLINE VIDEO TO BE…
52%
58%
a website or app will bring
together all forms of online
video that interest me, so
I can see everything
in one place
a website or app will curate
(i.e. pick, organize &
recommend) the majority of
videos I watch based on my
interests or preferences
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34. DISCOVERY
Personalization
With ease of access and content overload, video viewers are looking for
discovery assistance that will include automation, smarter curation, better
filtering, crowd sourcing, and relevant recommendations. What this really
amounts to is a greater call for personalization.
Video will be distributed through two methods of push and pull:
1) Through friends
2) Through normal online routines (using favorite apps/websites, searching)
The previous pages show just how important both push and pull will be to driving video views. In
order for a video to be discovered and watched, it’s critical to:
1) Have a robust social strategy
2) Be a part of the range of digital daily habits of consumers
3) Optimize search engine marketing while making it search-worthy in the first place
This concept of being a “worthy” place to watch is important to Yahoo, what we are calling the next
stage of video, or the televisionization of personalized video experiences.
34

35. PAYMENT
how would I pay for this

36. PAYMENT
Ads still preferred over subscriptions
WOULD YOU BE WILLING TO PAY FOR ONLINE VIDEO?
35%
Only 1 in 3 people
would consider making
micro payments
25%
Only 1 in 4 people
would consider
making monthly
subscription
payments
36

37. PAYMENT
Ads expected to be interactive, relevant, viewer-chosen
57%
expect online advertising
to be more interactive
48%
expect online advertising
to be directly relevant
to them
55%
expect to be able
to choose the ads
they see
37

38. PAYMENT
The most appealing ads are non-disruptive, interactive
HOW ACCEPTABILE ARE EACH OF THESE ADS?
MORE ACCEPTABLE
Pre-rolls
22%
18%
Interactive ads
Sponsorships
Banner ads
18%
15%
Wrapped banners
Mid rolls
15%
12%
LESS ACCEPTABLE
38

39. PAYMENT
Most would consider sharing personal info to get more relevant ads
WOULD YOU SHARE PERSONAL INFORMATION IN ORDER TO RECEIVE MORE RELEVANT
ADS TARGETED TO YOU?
42%
I would be happy to
share information about
my shopping habits
16%
84%
I would be unwilling to
share information about
my shopping habits
42%
I might consider sharing
information about my
shopping habits
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40. Why Online Video is a Daily Habit
40

41. Why Online Video is a Daily Habit
What does this all mean for advertisers?
Video is a daily habit as a result of easy access across devices, a wealth of great
content, and opportunities to discover through social and personalized experiences
ACCESS
Table stakes. Work with publishers that provide ease
of access, across devices and consumer daily habits.
CONTENT
Emotional connection. Sponsor or co-create the kinds
of content that consumers now expect. Align with the
rhythm of the consumer day and mindset.
DISCOVERY
Deeper significance and meaning. Utilize a push-andpull strategy to drive views that includes social and
strong curation powered by personalization engines.
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42. Why Online Video is a Daily Habit
What does this all mean for advertisers?
AD EXPERIENCE
•
Take into account daypart, device type, and
demeanor
•
Don’t get in the way of what the user wants
to do
•
Use data wisely and respectfully when
targeting
•
Contribute to the value exchange and
reciprocity
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43. Thank you.
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