STATE OF VIDEO IN E-COMMERCE Quarterly Research Report – Q1 2011

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WELCOME NOTE

This quarterly report focuses on the state of video in e-commerce websites in Q1 2011.

The report highlights statistics and emerging trends in the implementation and usage of online videos by

the top U.S. online retailers.

In this report we will review the following topics:

Online video presence in top e-retailers’ websites

Video indexing by search engines

SEO impact of using online retail videos

Revenue potential of an effective online video strategy.

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KEY FINDINGS

Mass-scaled videos on the rise. The number of retailers who mass-scaled their videos increased by

nearly 50%. Still, a staggering 68% of retailers are not yet exploiting the obvious and accessible

rewards of using videos on their sites. [slide 4]

Bing search engine surpassed Google in retailers’ video indexing [slide 6]

Consumers continue to embrace e-commerce videos. The number of subscribers to online retailer’s

YouTube channels increased by more than 20% [slide 7]

Online retailers respond to audience demand. The number of retailers posting >100 videos on

YouTube channels increased by 15% [slide 8]

Huge potential for video SEO profit [slide 9]

• Nearly 18% of the major search engine result pages contain video results

• Most video results for retail-related keywords are still posted only on YouTube

• Certain keyword categories (e.g. computer gaming) have a higher presence of video results than

others (e.g. furniture, office supplies)

Featured case study: Zappos generates more than $500K in incremental revenue simply by following

video SEO guidelines [slide 11]

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VIDEO PRESENCE ON E-COMMERCE SITES

Scale to fit. More retailers turn to mass video – 32% of retailers scaled to >1,000 videos on their sites,

compared to only 22% in the previous quarter.

Race to the top. Over the last three months, the cut-off to enter the top 10 video-using retailers list

increased from 2,500 to 3,600 videos per site.

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IR 2010

Rank

Est. No. of

Videos Retailer

Video

Rank

28 95,000 Overstock 1

1 72,635 Amazon* 2

25 29,620 HSN 3

11 17,687 QVC 4

32 11,198 Buy.com 5

42 9,000 Barnes and Noble 6

21 7,870 Target 7

48 4,070 Nike 8

22 3,625 Systemax 9

35 3,617 Cabela’s 10

TOP 10 RETAILERS BY VIDEO PRESENCE VIDEO PRESENCE PER SITE

* Video count for Amazon.com does not include Amazon’s

on-demand video services or Zappos.com.

*

Video SEO

Rank Retailer

Indexed

Videos

IR 2010

Rank

1 HSN 12,500 25

2 Overstock 6,310 28

3 Nike 4,070 48

4 HP 1,894 17

5 Buy.com 1,638 32

6 Systemax 695 22

7 Apple 658 4

8 Symantec 570 33

9 Redcats USA 455 31

10 Victoria's Secret 136 18

THE SEO EFFECT

Strive to thrive. Over the last three months, the cut-off to enter the top 10 retailers by number of

indexed videos increased from 51 to 136 indexed videos.

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TOP 10 RETAILERS BY NUMBER OF INDEXED VIDEOS

THE SEO EFFECT: BEYOND GOOGLE

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VIDEOS INDEXED BY BING VIDEOS INDEXED BY GOOGLE

Bing passes Google in retailers’ video indexing. Google experienced a decrease in the number of

websites indexing 10 videos or more. Meanwhile, Bing has seen a significant leap this quarter - from

18% to 36% - literally doubling the number of websites with >10 indexed videos.

THE YOUTUBE STARS

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Video

Rank Retailer

Number of Videos

Posted on YouTube

IR

Rank

1 HSN 79,034 25

2 Systemax 3,625 22

3 Buy.com 3,080 32

4 QVC 1,243 11

5 Dell 1,105 3

6 Nike 1,096 48

7 ToysRUS 974 37

8 Redcats USA 715 31

9 Musician's Friend 479 38

10 BestBuy 473 10

TOP 10 RETAILERS ON YOUTUBE TOP 10 RETAILERS VIEWED ON YOUTUBE

Impressive growth in retail YouTube presence.

Nearly 96K retail videos posted on YouTube in Q1 2011 – a 9% QOQ increase.

420M views of retail videos on YouTube – a 13% QOQ increase.

571K subscribers to retailer channels on YouTube – a 21% increase from previous quarter.

Video

Rank Retailer

Number of

YouTube Views

IR

Rank

1 Nike 146,737,586 48

2 Systemax 83,829,667 22

3 HSN 43,010,377 25

4 Apple 26,029,660 4

5 Victoria's Secret 23,439,804 18

6 ToysRUS 15,636,281 37

7 Musician's Friend 15,530,062 38

8 Redcats USA 9,171,843 31

9 Dell 8,038,749 3

10 HomeDepot 7,308,990 39

BROADCAST YOURSELF: YOUTUBE PRESENCE

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The more, the better. 48% of retailers posted more than 100 videos on YouTube channels in Q1

2011, as opposed to 42% in the previous quarter.

NUMBER OF RETAIL VIDEOS POSTED ON YOUTUBE

LEVERAGING SEO WITH ONLINE VIDEO

To test the SEO effectiveness of online video use, 34,000 top keywords within 17 categories* were

compiled and analyzed.

18% of these keywords generated video results in search engine result pages.

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The vast majority of video results in

all categories are videos posted on

YouTube.

Merely a handful of online retailers

leverage videos to drive traffic

directly to their site (Zappos, HSN,

Organize.com).

The online retailers whose videos

ranked high in search result pages

have all mass-scaled their website

inventory to thousands of product

videos.

PERCENTAGE OF KEYWORDS GENERATING VIDEO RESULTS

* Keywords were selected from Shopping.com’s top searches.

Some categories (e.g. computer gaming) have

more video results for related keywords than

other categories (e.g. furniture).

Similar to standard SEO best practices,

producing mass-scale videos to cater to long tail

keywords will generate better search engine

results, particularly in the more saturated

categories.

Online video + SEO = Big dollars. Even within

the more saturated categories, there is

significant SEO value that can be exploited by

retailers who will deploy an effective video

strategy, by:

• Scaling their video deployment to target long-

tail keywords.

• Adhere to video SEO best practices.

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LEVERAGING SEO WITH ONLINE VIDEO

MORE THAN JUST SHOES – THE ZAPPOS VIDEO SEO STORY

Zappos, the subject of this case study, is an e-retailer who chose to bet heavily on a strong video

strategy.

Zappos is an example of a retailer who has chosen to mass-scale their online videos and has

significant presence in search engine result pages.

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The purpose of this case study is

to analyze the value Zappos

derives from their video SEO

efforts.

For research purposes, a pool of

>21,000 shoe-related keywords

were tested*.

* Keywords were selected from Shopping.com’s top searches for shoes, Zappos’

brand list and Google ‘s keywords tool.

SNIPPET OF VIDEO SEO ANALYSIS REPORT FOR ZAPPOS.COM (As of March 22, 2011)

MORE THAN JUST SHOES – THE ZAPPOS VIDEO SEO STORY

Analysis of the Zappos video SEO results highlighted the following:

8.1% of the tested keywords generated Zappos video results.

The increase in monthly Zappos traffic accredited to video results amounted to

77,316 visits per month.

* The increase measured is compared to equivalent textual-page results.

* The results are based on ComScore and RankAbove reports comparing click-through results of

videos versus text pages. Analysis did not reflect the higher Google rankings gained by videos,

therefore actual number of visits is expected to be higher than noted above.

In terms of SEM, the total value of traffic derived from the limited keyword pool tested amounts to

$551,731 per year.

* The results are based on Google’s estimated CPC for each term.

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CONCLUSIONS AND RECOMMENDATIONS

Retailers are responding to audiences’ growing demand for retail video.

Clearly, the number of retail video views, the number of subscribers to retailer YouTube channels, and

the number of videos deployed by online retailers has grown significantly in Q1 2011.

Millions in proven SEO value are still up for grabs.

• Retailers who will leverage online video and video SEO as part of their marketing strategy will

generate significant revenues in 2011.

• Deployment of online videos has numerous other benefits aside from the proven SEO benefits,

such as user experience and engagement.

• Video SEO efforts complement and enhance other marketing SEO practices.

SEO impact of online video is now measurable.

• This report offers a new tool for measuring the net impact of online video SEO.

• The days of relying on marketers’ gut feelings are over – the ROI of video SEO practices can now

be evaluated before implementation, and success measured over time.

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ABOUT SUNDAYSKY SundaySky delivers automated product video production at mass scale and studio

quality to increase online sales and drive website traffic. Leading online retailers

such as Overstock.com, Discovery Store and Adorama use the SundaySky video

solution to cover their entire catalog with product videos resulting in dramatically

increased conversion rates, order size and search-engine ranking. Hundreds of

thousands of videos are generated daily by SundaySky’s Saas-based Automated

Video Platform. Videos are generated from existing website content, updated and

personalized automatically, engaging millions of viewers and calling them to action.

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Yaniv Axen, co-founder and CTO

Yaniv.axen@sundaysky.com

SundaySky

242 West 27th St., New York, NY 10001

P: 212-929-8111