STATE OF E-COMMERCE VIDEO REPORT

September 2010

Confidential 2

BACKGROUND AND METHODOLOGY

This report focused on the top 50 online retailers as published by Internet Retailer’s 2010 guide

• The research measures the current snapshot of video in the e-commerce market

Online businesses have found that video improves the following:

• Amount of time spent on websites, repeat visitation, increased search engine ranking, etc.

• Search engine rankings

• Increased conversion rate to product sale

Research Shows:

• The number of videos on each website, including type, etc.

• Implementation of these videos on the website

• Leading sources for e-commerce videos

• Methods for optimizing search engine results

• Best practices for YouTube syndication

• Best practices for video implementation strategies to maximize user adoption

Confidential 3

KEY FINDINGS

More than 65% of retailers use videos to

some degree.

Retailers currently not realizing video

SEO potential: fewer than 10% have more

than 10 videos indexed.

The e-commerce industry is polarized on

use of YouTube: 24% of retailers are not

present on YouTube, while 30% have

more than 1 million video views.

42% of the top retailer sites have little to

no video presence

42%

18%

16%

24%

Number of Videos on Site

Fewer than 10

Between 11 and 100

Between 101 and 1000

More than 1000

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TOP 10 ONLINE RETAILERS (BY NUMBER OF VIDEOS)

NUMBER OF VIDEOS ON E-COMMERCE SITES

IR 2010 Rank

Estimated # of Videos

Retailer VideoRank

28 166,499 Overstock 1

1 67,021 Amazon 2

11 20,085 QVC 3

4 11,520 Apple 4

21 9,572 Target 5

32 8,605 Buy.com 6

12 3,927 Newegg 7

25 3,250 HSN 8

6 2,391 Walmart 9

37 2,247 ToysRUS 10

Overs

tock

Amaz

onQVC

Apple

Targe

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Buy.c

om

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20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000 166,499

67,021

20,08511,520 9,572 8,605

3,927 3,250 2,391 2,247

Estimated Number of Videos

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SEO EFFECT

The top 100 retailers report that, on

average, about 30% of their traffic is

search-engine based.

 

Heat-map depiction of human interaction with search result pages shows that video-powered results draw users’ attention even when

those are not the highest ranked result (though often they are).

52%

24%

12%

24%

8%

Videos Indexed by Google

None Between 1 and 10

Between 11 and 100 Between 101 and 1000

More than 1000

IR 2010 Rank

Indexed VideosFor Search

Retailer VideoRank

1 67,021 Amazon 1

28 56,069 Overstock 2

4 2,718 Apple 3

48 1,362 Nike 4

31 528 Redcats USA 5

33 196 Symantec 6

14 84 Netflix 7

3 35 Dell 8

38 30 Musician’s Friend 9

13 27 Sony Style 10

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ADDITIONAL SEO SUBSTANTIATION

48%

22%

18%

8%4%

Videos Indexed by Bing

None Between 1 and 10

Between 11 and 100 Between 101 and 1000

More than 1000

30%

38%

12%

12% 8%

Videos Indexed by Yahoo!

None Between 1 and 10

Between 11 and 100 Between 101 and 1000

More than 1000

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WHO PROVIDES THE VIDEOS?

  Considerations when choosing a video production service include:

• Cost – creating video content for websites can be costly when you consider manual

production hours and the maintenance required.

• Ability to scale – videos must be applied to all products and categories in the catalogue

to be effective.

• Easily updated – video content must reflect the dynamic nature of product catalogues.

• Quality of video – customers will respond to videos that are interactive, branded and

engaging.

Three, often complementary, options for video production are:

1. Manual production

2. Syndication of manufacturer videos

3. Automatic video generation

Confidential 8

VIDEO DELIVERY AND MANAGEMENT

Our research indicates that the vast

majority of videos are delivered from a

content delivery network (CDN) and not

hosted onsite.

Akamai dominates the top 50 retailer list

by a large margin, and we also see

videos being served from Amazon’s cloud

services (Either S3 or CloudFront),

LimeLight and CDNetworks75%

11%

7%3% 4%

Video Delivery / CDN Vendor

Akamai Amazon(s3+CF) Self-hosted CDNetworks

Limelight

Confidential 9

YOUTUBE PRESENCE

YouTube has been the number two search engine since 2008 and is the fourth overall web property.

• There are two main objectives for online retailers to promote their videos on YouTube:

1. Brand promotion

2. Increase qualified traffic

IR 2010 Rank Number of Videos Retailer Rank

25 55,086 HSN 1

32 1,793 Buy.com 2

11 1,369 QVC 3

3 693 Dell 4

10 557 BestBuy 5

31 535 Redcats USA 6

37 502 ToysRUS 7

38 353 Musician’s Friend 8

42 296 Barnes and Noble

9

49 229 Scholastic 10

TOP 10 ONLINE RETAILERS BY NUMBER OF VIDEOS UPLOADED TO THEIR YOUTUBE CHANNELS

IR 2010 Rank Number of Views Retailer Rank

48 More than 80M Nike 1

25 28,489,299 HSN 2

18 9,496,588 Victoria’s Secret 3

38 7,429,805 Musician’s Friend 4

37 5,925,707 ToysRUS 5

4 5,203,305 Apple 6

31 5,083,679 Redcats USA 7

3 4,918,755 Dell 8

39 3,532,213 Home Depot 9

17 2,365,017 HP 10

TOP 10 ONLINE RETAILERS BY NUMBER OF VIEWS ON THEIR YOUTUBE CHANNEL

Confidential 10

CONCLUSION

The research presented here is the first of its kind trying to explore different impacts of

online video on the e-commerce industry.

What we have included:

• What retailers may hope to achieve by deploying videos

• What they currently achieve

• How they achieve goals and next steps for success

 Video e-commerce has moved from experimental to the scaling phase, however:

• There is a relatively small portion of top retailers who actually use video and exploit its

potential to the maximum extent. This initial, limited adoption by retailers demonstrates the

early stage of the market.

Companies like Overstock.com and Nike have defined a clear and successful video strategy

and are setting the stage for full industry adoption.

Confidential 11

STATE OF VIDEO IN ECOMMERCE: Q3’2010

The second report in the series:

• Updates trends discussed in this report

• Highlights new trends and findings regarding the usage of video in mobile and in social

media

NOW AVAILABLE ON OUR WEBSITE!

http://www.sundaysky.com/resources/state-of-video-in-e-commerce-q32010.html

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ABOUT SUNDAYSKYSundaySky is the leader in dynamically generated video, enabling e-commerce

businesses to reinforce their brands and drive website traffic by creating limitless,

high-quality, always up-to-date videos to showcase products and services. 

SundaySky’s software-as-a-service (SaaS)-based video generation platform helps

customers personalize web experiences, enhance customer engagement and

increase conversions, ultimately improving marketing ROI.  SundaySky is

headquartered in Tel Aviv with a product and technology center there and a

business center in New York. The company is funded by Carmel Ventures and

Globespan Capital.

Learn more at www.sundaysky.com

Confidential 13

SUNDAYSKY CONTACTS

Yaniv Axen, co-founder and CTOYaniv.axen@sundaysky.comSundaySky242 West 27th St., New York, NY 10001P: 212-929-8111 Courtney Hurst, partner

Metis Communications121 East Berkeley St., Boston, MA 02118P: 617-236-0500