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The next big thing in customer communications might well be personalized video. While the idea of videos that deliver content relevant to each customer’s situation and needs isn’t new, so far, it’s mostly been used in marketing and advertising. However, along with attracting consumers’ attention in an accessible and engaging way, video is perfect for conveying detail and explaining complicated product or service information. Add interactivity and you’ve got an ideal channel for enterprise customer communications.

The digital advertising market is pretty big—$168bn in 2015, according to McKinsey & Company’s "Global Media Report 2014." Online video advertising is only a small portion of this market, but it’s growing fast. So, it’s no surprise that personalized video technology vendors are aiming to grow their share in the digital advertising market.

Enterprise customer communications provides them with a new opportunity, and a willing market, it appears. Our research reveals that more than 44% of enterprises in key verticals, such as financial services, insurance, telecoms, utilities, government and healthcare services, rate the importance of this technology as high—and see it potentially changing the way they deliver their customer communications.

There are three main applications for personalized video, and two of them are in the customer communications area. The established marketing use involves presenting highly targeted video messages to customers and prospects using individual and real-time customer attributes, such as purchase history, Facebook or other social media "likes," previously watched videos and websites visited in conjunction with geographical data, but personalized video also lends itself very well to customer service and information sharing.

Providing interactive access to information in video format is a powerful way to enable customers to answer their own queries online via self-service portals and, so, reducing the volume of service calls and improving productivity in customer service operations. Information sharing revolves around explaining purchased products or services or complex transactional customer communications. The ability to distill and convey complicated information in a way that is easily understood and assimilated helps to reduce the cost of errors caused by incorrect usage or consumption of the purchased product or service. It also speeds up the onboarding process by explaining new policy terms or the first statement received, for example.

Technology drivers
While the technology to create personalized video has been around for several years, it’s the combination of several, recent information technology (IT) trends that have made it possible for it to reach a broader user base. Big data plays a significant role in identifying and reaching customers at a one-to-one level and is the key enabler for creating relevant, timely and personalized video content. Technology for managing and analyzing big data has seen strong development in recent years and current capabilities make near real-time analysis possible; this, in turn, means that personalized videos, whose content is determined by that analysis, can be created just as quickly.

Cloud-based ecosystems are the ideal platform for creating and delivering personalized video, because they can provide on-demand, state-of-the-art and scalable IT infrastructure so that enterprises do not have to invest in the processing power and extensive storage that video requires. Cloud deployment also allows video technology developers to offer alternative business models, such as pay-per-use and cost-per-impression charging, again, allowing enterprises to match costs to returns and avoid major upfront investment in IT infrastructure. Embedding multiple engaging elements in personalized videos, such as hyperlinks, personalized text and images or input fields for direct customer feedback or in-video surveys, significantly improves the return on investment (ROI) of personalized videos.

For high-volume, global distribution, video streaming platforms, such as YouTube and Vimeo, are reaching ever-greater levels of popularity. According to Cisco, streaming video is projected to account for 80% of all consumer Internet traffic by 2019. The ability to reach millions of consumers through video, delivered via these platforms, makes it an increasingly attractive channel.

New competitors emerge
For all that personalized video appears to have compelling applications in customer communications, not many customer communications management (CCM) technology vendors are actively supporting it yet, with many focusing on interactive and mobile solutions or support for synchronized multi-channel delivery that can meet customers’ preferences. However, some are exploring it, either through partnerships or acquisition: HP Exstream and SundaySky announced a partnership in 2012, enabling Exstream users to deliver personalized videos; Pitney Bowes acquired Real Time Content in 2015, after a period of successful collaboration on a variety of customer projects, and has now integrated this technology into its Customer Engagement Solutions Suite and is marketing it as EngageOne Video. Doxee offers personalized video as part of its cloud-based Enterprise Communication Platform, using technology based on Adobe Edge, and Adobe’s Personal After Effects software is behind uDirect Video, XMPie’s solution for personalized video.

It’s not just the established CCM players who are starting to offer personalized video capability to mainstream businesses, though. Vendors such as SundaySky, Idomoo, Rednun and Impossible Software are now targeting enterprises with solutions suitable for the customer communications applications described here. These vendors are strongly marketing-driven, don’t have a print legacy and very much have a "digital first" attitude, which makes them well-suited to meeting the needs of customer communications in the coming years.

The arrival of forward-looking, new entrants in this space will raise competition and should spur innovation, all of which will help make personalized video an increasingly mainstream option for customer communications in the near future.

David Stabel is an associate director for InfoTrends’ customer engagement technologies advisory service. For more information on InfoTrends’ customer engagement technologies advisory service, visit Follow him on Twitter @davidstabel.

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