Posts for 'Advertising'

Readers of VideoNuze know that for a long time I've been a big proponent of syndication as a key building block for broadband video success. In last week's webinar I explained that I see this trend only accelerating as content providers increasingly shift from aggregating the most eyeballs to accessing the most eyeballs. That means syndicating video far and wide through social networks, portals, broadband aggregators and others is fast-becoming a key success factor.

Yet aggressive syndication presents a complex set of issues around how to control and optimize the advertising to all those dispersed viewers. Absent the right set of tools to administer each deal's terms, there's a bias toward simplicity and hence, under-optimization. For example, I continually hear that all the broadcasters' syndication deals are 90-10 ad revenue splits. In some cases a plain vanilla approach like this may be fine. More likely though, to have a biz dev person's hands tied to very limited deal terms because of a lack of technology solutions significantly constrains the ecosystem.

FreeWheel is a new company aimed at unlocking these constraints with its "Monetization Rights Management" or MRM technology platform. MRM is a full ASP platform that empowers content providers' biz dev teams to cut creative revenue/inventory sharing with syndication partners and then have ad sales teams follow through with far more intelligence about how to implement these deals and sell inventory. The result is revenue optimization for all parties. I caught up with CEO Doug Knopper, co-CEO and co-founder of FreeWheel last week to learn more.

FreeWheel sits on top of existing ad management systems, as a sort of cross between a digital traffic cop and a green eyeshade - dynamically managing and allocating ad inventory, while keeping track of all ads and revenue across the content provider's syndicated network. MRM interfaces to a content provider's and partner's content management system through FreeWheel's API, allowing MRM to implement its predetermined business rules alongside the content being sent to partners. Clearly there's a huge network affect opportunity for FreeWheel - the more partners its early content provider customers get to implement MRM, the easier FreeWheel's sale will be to subsequent content providers.

FreeWheel reminds me a lot of Signiant, which I wrote about recently. Signiant is more focused on content distribution in a syndicated economy, while FreeWheel is focused on ad management. But both companies share a common purpose of greasing the skids for both content providers and distributors to play ball with each other with the intention of driving more video views and advertising revenue.

FreeWheel has signed up Next New Networks, Joost and Jumpstart Automotive Media as initial clients. The company was founded by three former DoubleClick executives, has 40 employees and has raised 2 rounds from Battery Ventures, though the total is undisclosed.

At the end of each month I plan to step back and recap a few key themes from recent VideoNuze posts. Here are three from February '08:

Brand marketers embrace broadband video

One clear theme from the past 4 weeks has been brand marketers' accelerating moves into the broadband video space. This was on full display by select Super Bowl and Oscar advertisers. We are witnessing an unprecedented commitment by brands to create their own entertainment/information video content and also to induce consumers to create brand-related video through user-generated contests. As I detailed in yesterday's webinar, examples in the former category include Kraft/Tassimo, J&J, CIT Financial and GoDaddy.com, while examples in the latter category include TideToGo/MyTalkingStain.com, Heinz/Top This, Dove Cream Oil Body Wash and T-Mobile/Current TV.

Through VideoNuze I track all brands' broadband video initiatives, and it is clear that their involvement in this new medium is intensifying. Faced with splintering audiences, ad-skipping DVRs and changing media consumption habits - particularly by younger demos - brands have no choice but to get into broadband video. This results in an entirely different awareness/engagement paradigm than we're accustomed to from the world of interruptive TV advertising. Brands today increasingly recognize that a key way to create loyalty (and generate sales!) is by engaging the audience on its terms, using broadband and other technologies to accomplish this.

Monetization is the #1 challenge

Another key theme of the past month was the ongoing quest for broadband video monetization. As I also mentioned in yesterday's webinar, this is the number 1 business challenge for all broadband video industry participants - both content and technology providers. Two companies I wrote about this month, EveryZing and Veveo, are focused on improving content discovery, which leads to more consumption and revenue-generating opportunities. I also wrote about Jake Sasseville, a young entertainer who is pioneering multi-platform initiatives to forge a new revenue model.

Innovation is key in this space. Next week I'll be writing about Freewheel, an innovative startup that's just surfaced, which is providing a new approach to managing broadband video advertising. And yesterday, Magnify.net, one of my favorite early-stage companies, which focuses on enabling video content distribution, announced that it has raised an additional $1 of financing.

In addition, the big dogs of the technology and media landscape are in hot pursuit of improved video monetization as well. This month alone brought news of Yahoo's acquisition of Maven Networks, an ad-centric video platform, Google's beta rollout of AdSense for video, and the hostile bid by Microsoft for Yahoo, a deal that has vast longer-term implications for online and broadband video advertising. In short, monetization is a key focus for all large and small industry participants - cracking this nut is crucial to the long-term health of the industry.

Net neutrality re-surfaces

Lastly, this month also brought a lot of news on the regulatory front. Twice I wrote about "net neutrality," a regulatory concept its proponents believe will keep the Internet free from discrimination by broadband ISPs. While I don't agree with their viewpoint, what is clearly true is that net neutrality is being spurred by the massive adoption of broadband video, which places an unprecedented load on broadband ISPs' networks.

So that's it for this leap year month. Three themes you'll be hearing much more about going forward: brand marketers' broadband video initiatives, video monetization and net neutrality. See you on Monday for the start of a new month!

For me, Google and its initiatives in broadband video advertising and distribution have conjured a comparison to the lion of the jungle. Like the lion, Google often seems to be slumbering in this hot space, yet every once in a while it wakes up, raises its head and roars to the market with a new video advertising announcement. These roars serve as a reminder to others that it is, of course, the king of the online jungle.

But then, rather than following up these periodic roars with steady follow-on news of accomplishments, financial success and new features, Google inexplicably seems to go back to its slumber, thus returning the jungle to the startup antelopes and established elephants to do the spade work of building the broadband video ad market.

Yesterday, Google roared again, this time announcing the "beta" release of its AdSense for Video product and the launch of its destination "Video Advertising Solutions" center, which explains all of Google's video ad opportunities and offers very well produced explanatory videos.

Video ads have been previously announced by Google, and AdSense for video builds on these by allowing a broad range of content providers to tap into AdSense for graphical or text overlay ads on their video streams. Google announced a large network of content and platform partners, augmenting the massive inventory already available on YouTube.

By tying AdSense for Video to its AdWords capability, advertisers have a one-stop shop for text and video ads contextually placed across web pages and video streams. Since participating publishers can expose a percentage of their streams to AdSense, they enhance their overall monetization opportunities.

I spoke with a number of people in the advertising/technology/content communities yesterday and there was a consensus that Google's actions help validate the broadband video advertising market opportunity and overlays in particular (note Google doesn't support pre-rolls). I agree with those who said that with the overall market growing fast, Google isn't terribly competitive with other contextual ad firms; there's clearly room for more than just one player.

On the content provider side, of course any initiative to better monetize video streams, particularly by an established player like Google, will always be welcomed. This feeling is offset somewhat by the underlying anxiety that all content providers have vis-a-vis Google - it is part competitor on the content side, and also part competitor on the ad sales side. This is particularly true of YouTube, which offers significant distribution benefits to content providers, but while also competing for eyeballs.

For content providers' advertising revenues, while AdSense promises improved monetization, it might also lead to channel conflict as advertisers may try to pay less for targeted ad inventory available through Google rather than from the provider itself. This has been less a concern in traditional web publishing, because Google hasn't sold display ads. The risk is that over time AdSense for video could lead to a "hollowing out" of content providers' crucial ad sales capabilities. This dynamic reinforces why it's so important that those who work with AdSense for video set business rules and then adhere to them, rather than be too tempted to grab the easy, short-term money Google can provide.

With the beta of AdSense for video, Google has again reminded the market that its unparalleled technology, content, monetization and financial strength makes it the lion of the online jungle. It is well-positioned to also become the lion of the broadband video ad jungle. Let's see if Google keeps on roaring, or if it appears to lapse back into slumber.

I love the Super Bowl ads as much as anyone. I never stop being amazed by the creativity and humor on display during each year's big game. This year was no exception: screeching squirrels, a strutting heart, shrunken heads, talking babies, the list goes on. For what Super Bowls ads are and always have been, they're terrific. My problem is that I believe broadband video allows Super Bowl ads to be much more than what they are and always have been. But the agency world does not seem to be getting this message.

Two years ago I wrote "The Ten Million Dollar Super Bowl Ad?", where I outlined a scenario under which a 30 second spot could someday go for ten million bucks. How? By combining the best of brand advertising (the big emotional play) with the best of online advertising (the big measurable, performance-oriented play).

I wrote in that post: "What I envision is that the 30-second spot during the game will become the viewer's introduction or re-introduction to the brand or product. Numerous online, broadband-centric tactics will follow, with video being the center of the action. In football terms, the 30-second spot will morph from throwing a long pass (which is accompanied by high drama, but low probability of an actual score) to executing a more consistent ground game (accompanied by lower drama, but a much higher probability of an actual score). With this added measurability and a direct feedback loop, marketers will have much less anxiety about whether to ante up for the big game (and therefore the price will spiral upward).

I thought agencies and marketers would see this light and rush toward it. Boy was I over-optimistic. After watching all 52 Super Bowl ads this morning (thanks AOL), I am completely dismayed to report that, by my count, only 5 ads had any broadband video component:

GoDaddy - promoting Danica Patrick's "Exposure" banned ad and other videos

TideToGo - promoting "MyTalkingStain.com" a fun microsite

Life Water - promoting "Thrillicious.com" a microsite with a 2nd spot with the dancing iguanas 

Sunsilk - promoting "LifeCantWait.com", a microsite with a UGC contest which is not yet active

Pepsi - promoting "PepsiStuff.com", with Amazon (ok, more focused on music than video)

All of the other 47 ads, representing tens of millions of dollars of clients' money, followed the same game plan from Super Bowls' past: go for either the clever, the funny or the gross, in an attempt to create buzz and fond memories for fans.

For me, this hidebound behavior showcases agencies at their most disappointing: unable to break out of the box, recognize new consumer engagement opportunities for their clients or embrace new technologies. Their inability or unwillingness to be more progressive is at the heart of why the whole advertising industry is in such chaos, with an increasing share of total spending shifting to online each year.

Well, here I was waiting for news to officially cross the wire that Yahoo was acquiring Maven Networks for $150-$170 million (heavily rumored in the blogosphere yesterday and for weeks now) so that I could weigh in, when instead what emerged this morning was that Microsoft is making an unsolicited offer for Yahoo. Quite a day for Yahoo. (Note, I'll have more on Yahoo-Maven if and when that becomes official).

Today's big news is Microsoft's unsolicited $44.6B offer for Yahoo. Talks between the companies have been off and on for a long time, and it looks like Microsoft finally got fed up with the dithering at Yahoo and decided to make a pre-emptive move. Steve Ballmer's letter to Yahoo's board and today's release is here.

The deal is all about increasing scale to compete more effectively with Google in the online advertising space. Both Microsoft and Yahoo have lagged Google badly and have spent billions in the past year on ad infrastructure acquisitions. Yahoo immediately brings MSN lots of new traffic, which can be monetized with both search and display advertising.

Though Ballmer's letter also highlights "emerging user experiences" such as video, mobile, online commerce, social media and social platforms" down the list, as the fourth area of potential synergies, I would argue that the upside in video is actually the most strategic benefit of the deal. Why?

The concept of scale, i.e. being able to both reach gigantic audiences and drive massive traffic from them, is absolutely essential for broadband video advertising to become core part of the marketing mix for big brands. Unlike search-based advertising, which has been driven by long-tail advertisers, broadband video advertising is going to be driven by big brands. That's because, notwithstanding the growth of overlays and other formats, pre-, mid- and post-roll ads are going to be with us for a while to come, and they are expensive to produce. The average garage-sized business isn't going to be making them.

Big brands spend tens of billions of dollars on TV ads. Shifting a meaningful part of this spending to broadband delivery is essential for broadband's growth. Brands spend on TV because that's been the only way for them to buy enough audience reach. Though they're beginning to trickle some spending over to broadband, the central obstacle to increasing their broadband spending is that there simply is not enough high quality, targeted video inventory for them to buy in order to achieve their reach objectives and therefore materially impact their businesses.

This is a theme I hear all the time, and just heard many times in the ad-related sessions I attended at NATPE earlier this week. Microsoft knows that to tap the long-term broadband ad opportunity in branded video advertising, it must offer advertisers greater reach, along with interactivity, reporting, social features, etc. This is all the more urgent because MSN and Yahoo are already playing catch-up to YouTube which still drive approximately 40% of all video views, a dominant market position.

MSN has worked hard to cross-promote MSN video in the rest of the site, and this has driven improved user experiences and impressive traffic gains. Yahoo, which has been mired down with a dysfunctional and bloated bureaucracy, has been far less coordinated and effective in video, leaving lots of room for MSN to make improvements.

You won't hear much about video as a key motivator for the deal because Wall Street, which is Microsoft's key audience to persuade, doesn't give a whit about long-term strategic positioning. It only cares about short-term financial metrics like dilution, earnings growth, cost-reductions and so forth. But behind the scenes, I'm giving credit to Microsoft. I think it is reading the tea leaves correctly about how the broadband video ad market is going to unfold and how to get MSN positioned properly for long-term success.

What do you think? Post a comment!

Ending the week on a slightly lighter note, if you happened to go to WSJ.com or NYT.com yesterday, you would have seen that Apple bought out all the top of page ad inventory at both sites for its latest "Get a Mac" video spot (also known as the "Mac vs. PC" ads), which have been hugely popular on TV and online.

Apple's so-called "roadblock" strategy yesterday meant that every single visitor to these 2 sites were exposed to the same leaderboard/skyscraper video ad highlighting WSJ writer Walt Mossberg's opinion that Apple's latest Leopard OS release is "better and faster than Vista." Apple has a whole gallery of its "Get a Mac" ads here, though this new one is not yet posted.

In the online ad business, this type of video ad is referred to as "rich media." I haven't spent much time in VideoNuze discussing rich media ads, instead concentrating on pre-rolls and overlays ads which are actually adjacent to video content. Rich media ads show that there are many different ways to leverage video's emotional and informational impact even when there is no underlying video content to be adjacent to. Given the limitation of high-quality video content against which to run video ads, rich media has become an important and growing segment of the overall online ad business.

While, some rich media ads are way too "in your face" and spoil the user's experience, I think the way the yesterday's roadblock was executed is well within bounds. The video begins playing when the site loads, but the audio is muted. The user has to click the audio icon, and then the spot replays from the start. This means there's been an opt-in decision, which leads to higher engagement. Also, unlike many other rich media spots, the ad is composed solely of a leaderboard and skyscraper, so it doesn't have any obnoxious "pop-ups", "floating" or "expandable" components that block the underlying site content. These are the types of things that drive users crazy.

Rich media ads are an important part of the mix for fully understanding what's happening with video online, especially for advertisers who want to explore all options for leveraging video's emotional impact. I see the category continuing to grow. If ads are well-executed like Apple's, there will not only be minimal user pushback, but rather genuine opportunities for branding and interactivity.

With 2007 wrapping up, it's time to look ahead to the new year and make 6 predictions about what's ahead for broadband video in 2008. In general, I'm extremely optimistic about broadband's potential in the new year. To be sure, there are lots of challenges ahead, but much to look forward to.

Here's what my crystal ball is telling me:

1. Advertising business model gains further momentum.

Many of you have been hearing me beat this drum for a long time now; I'm just going to go right on beating it in 2008. Advertising is the primary business model for broadband video and this will only continue to grow in importance as the year goes along.

All the elements are falling in place for the ad model's momentum. In '08 we'll see more video consumption, especially of high-quality video, and more syndication, all of which will lead to more ad inventory. But 2008 is about more than just a quality and volume; it's also about better targeting, better formats, more sophisticated sales processes and more interactivity/community building around video. I'm impressed with the range of companies pursuing each of these areas and expect them to gain lots of traction.

2. Brand marketers jump on broadband bandwagon.

2007 marked the continuation of brand marketers creating their own broadband video-centric destinations, wrapped in increasingly clever campaigns. I track these initiatives very closely and wrote about many of them (Dell and Gap, Frito-Lay, Neiman-Marcus, Smirnoff, Dove, CIT, Campari, Universal Pictures, Showtime, etc.).

In 2008, we're going to see a proliferation of these direct-to-consumer broadband-centric marketing campaigns. Marketers and agencies across the board are coming to recognize how important broadband is for engaging their audiences in a way that TV spots simply can't match. Then factor in the high cost of TV and the rampant use of DVRs to ad-skip. I'm expecting lots of creativity from brand marketers in '08 as they push deeper into broadband, further pressuring the traditional TV ad business.

3. Beijing Summer Olympics is a broadband blowout.

NBC plans to stream an unprecedented 2,200 hours of live Olympics coverage at NBCOlympics.com. All of this is going to completely redefine how broadband adds new value to live sporting events. In particular, NBC's coverage is going to shine a very bright light on the appeal of broadband to deliver multiple simultaneous events in their entirety as they occur, instead of the usual chockablock, tape-delayed coverage. It's also going to demonstrate how well-suited broadband delivery is for niche but passionate audiences.

If NBC executes well, I think it has the potential to open up a whole new horizon in how broadband can augment (and in some cases, maybe even replace) broadcast coverage of sports events. For example, golf is a sport that cries out for improved coverage that broadband can offer. Instead of cutting back and forth to players' key shots, broadband would allow for cameras to stream all players' full rounds simultaneously, with fans able to watch just their favorite player, while also keeping an eye on the main feed. Bottom line, the '08 Olympics is going to show sports and live events producers everywhere what broadband can offer them too.

4. 2008 is the "Year of the broadband presidential election."

What TV was to the 1960 presidential campaign is what broadband is going to be to the '08 campaign. Broadband's impact has already been felt. Virginia Gov. George Allen's campaign was aborted after he was caught uttering a racial slur in his classic "YouTube moment." CNN has already hosted joint debates with YouTube. Hillary Clinton announced her candidacy in a video posted on her web site and also just launched TheHillaryIKnow.com with a passel of video testimonials about her softer side. Barack Obama's web site brims with video from the trail.

In '08 broadband video will be interweaved into the fabric of the major candidates' campaigns. It won't be an augment, it will be a central feature for reaching voters, particularly young ones. Broadband offers an unprecedented inexpensive way to convey the candidates' emotions and connect with voters. Presidential campaigning will never be the same again.

5. WGA strike fuels broadband video proliferation.

As the writers' strike slogs on, it is inevitable that many writers and producers (especially below the top tier) are going to look upon broadband as an attractive new medium to ply their trade. The signs are already there. It will be an ironic twist that the strike, which is centered on reallocating "new media" revenues, is going to stoke more interest in broadband productions, but outside the traditional apparatus.

I can't put my finger on exactly how this is going to unfold, but I think I can say with confidence that there is a lot of smart money eager to place bets on broadband video content. Writers and producers with track records and plausible plans will get funded. Quarterlife, Next New Networks, FunnyOrDie are all pre-strike examples of this. The strike only accelerates things.

6. Broadband consumption remains on computers, but HD delivery proliferates.

I wrote about this in detail just last week: regrettably broadband video is NOT coming to the masses' TVs any time soon. My guess is that 99.9% of users who start the year watching broadband video on their computers (or mobile devices in some cases) will end the year no closer to watching broadband on their TVs. Some initiatives will gain some ground, but on the whole, don't expect any mass adoption of devices or mechanisms to converge broadband with TVs in '08.

Nonetheless, do expect that HD or near HD-quality broadband video is going to proliferate in '08. A survey I worked on with a client, whose results will be shared in early '08, will attest to strong content provider interest in HD broadband video. That means that viewer experiences are only going to improve, and for those with big monitors and/or easy chairs, it may actually start to feel like this whole connect-the-computer-to-the-TV is unnecessary anyway.

So there you have it. Post a comment and let me know if you agree or disagree!

Yesterday's Internet TV Advertising Forum/Maven Networks webcast "Pre-Roll vs. Overlay: Consumer Reaction to New Online Video Advertising Formats" yielded a lot of interesting usability information about various broadband video ad formats. For any content provider or aggregator who's relying on advertising as their business model of choice, it's clear that there are some significant opportunities and challenges ahead.

Below is a summary of the 5 key usability conclusions I heard in the webcast along with my take on each:

1. Users hate pre-rolls. Respondents overwhelmingly agreed that video ads are annoying and have developed the same kinds of coping techniques (tuning out, bailing out, etc.) they use to avoid TV ads.

My take: Yes, but unfortunately for users, I don't see pre-rolls going away any time soon. They're easy to execute, fit media buying habits well, are selling strongly especially for high-quality long-form video and best for advertisers seeking a tonic from DVR behaviors, pre-rolls can't be outright skipped by users. Given all this, let's all hope that targeting improves and publishers use them with some discipline, so users don't preemptively turn off to the broadband video medium.

2. Overlay ads' effectiveness is correlated to content fit, not demographics. Testing showed that users welcomed ads for products that were highly related to the content itself, and lost interest the less related the two were. Demos were less important.

My take: This point reinforces the importance of contextual targeting, which of course has worked well on the Internet as a whole. Yet as Bob Kernen at Maven says, a lot of content is "non-endemic" (i.e. doesn't lend itself to specific products or ads), so my guess is that this correlation opportunity is going to be lost for many content providers. Network programs in particular seem non-endemic and therefore will need to rely mainly on demo-based and possibly behavioral targeting.

3. Overlay ads need better execution to work well. Jeff Rosenblum from Questus summarized 8 best practices for executing overlay ads, such as appropriate frequency and duration, user control, calls-to-action, navigation and the like. For anyone looking to run an overlay campaign (and even for those who have), these serve as a great roadmap of do's and don't's.

My take: As always, executing right can make the difference between a campaign's success and failure. If you're planning to run an overlay campaign, I highly suggest you review this checklist against your plans to make sure you haven't overlooked anything.

4. It's difficult to engage an audience. The testing again showed how hard it is to engage online audiences, regardless of approach. Bob laid out a handy engagement hierarchy, Impression, Interaction and Immersion (from least to most engaging). Knowing what level of engagement your campaign aspires to must guide specific tactics and execution.

My take: Getting the consumer's attention and prompting them to act is the ad industry's oldest goal. It's even harder in the broadband sector. People have shorter attention spans than ever, so grabbing them and getting them to do what you hope gets more difficult all the time. Fortunately video offers emotional appeal unlike any text or graphical ad in the Internet world, so broadband offers new engagement techniques previously unavailable.

5. More research needed. While this first round of usability testing from the Internet Ad Forum shed a lot of new light on the broadband ad opportunity, it's clearly just a first step. The Forum has ambitious goals to keep researching and testing, continuously educating the market.

My take: As I mentioned in my remarks at the beginning of the webcast, everyone has a vested interest in solidifying the ad model as soon as possible. The enthusiasm around broadband will soon dry up if participants don't earn an acceptable ROI for their efforts.

blinkx, which has been around as long as just about anyone in the video search space, is steadily building out its distribution network and advertising capabilities. I caught up with Suranga Chandratillake, CEO of blinkx, who's led the company since its spinoff from Autonomy, and successfully took the company public on London's AIM earlier this year.

Suranga said blinkx is now supporting 5 million searches/day and generating 50 million unique visitors/mo across its network. Network partners featuring a blinkx search box now include Ask.com, Real, Lycos, Infospace and scores of smaller sites that use blinkx's API. Suranga says blinkx can't distinguish between traffic coming from network partners vs. at blinkx.com itself. And the revenue splits in the business deals seem to vary widely, though typically they average out to 50-50. All deals are based on advertising, with the partner usually selling the inventory.

On the ad side, blinkx took a big step forward earlier this year, launching its "AdHoc" contextual ad program. Given the analysis blinkx is doing on video to drive search, it's a natural that the company now leverages this knowledge to improve targeting for ads. In fact, Suranga sees AdHoc as a sort of AdSense for video, dynamcially matching ads with relevant content.

With improved targeting of course comes improved CPMs. Suranga says they've seen CPMs as high as $66 through AdHoc. blinkx is relying on the scale of its 220+ content relationships and millions of impressions to make AdHoc work. Formats can vary but the one that has been most successful so far in a mid-roll banner with an invitation for user to click and engage. As I've written before, AdHoc plays in the same space as other contextual video ad companies such as ScanScout, Adap.tv, DigitalSmiths, AdBrite, YuMe and of course YouTube, plus others.

Both the contextual ad and video search spaces are growing increasingly crowded. Players recognize these are 3 interrelated Achilles heels of the current broadband video model: users finding desired content, content providers getting paid for their work and advertisers getting sufficient and well-targeted industry. blinkx seems well-positioned to address all three.

A quick reminder about tomorrow's complimentary webcast (Dec. 12) entitled, "Pre-Roll vs. Overlay: Consumer Reaction to New Online Video Advertising Formats," hosted by the Internet TV Advertising Forum and Maven Networks. If you're motivated to learn about what real consumers think about different types of broadband video ad formats, this webcast is for you. Results from recent usability tests will be shared. I'll be offering some brief remarks at the beginning.

If you're interested in attending, click here to register.

(Note: I have no financial interest in the Forum, this webcast or Maven Networks.)

From time to time I'll take the opportunity to bring worthwhile industry events to your attention. In this spirit, there will be a terrific complimentary webcast this Wed, Dec. 12, entitled, "Pre-Roll vs. Overlay: Consumer Reaction to New Online Video Advertising Formats."

(Note: I have no financial interest in the Forum, this webcast or Maven Networks.)

The Internet TV Advertising Forum, which was founded by Maven, includes a group of leading companies such as Digitas, DoubleClick, Fox News Digital, Microsoft, Oglivy, Scripps Networks Interactive, TV Guide, 24/7 Real Media and 4Kids Entertainment. The Forum is working to define the next generation of broadband video advertising strategies, formats and best practices.

The Forum conducted a series of usability tests in October, 2007, to study new, interactive ad formats designed for broadband video. During the webcast, Jeff Rosenblum, co-president of Questus, the market research firm that oversaw the usability testing, will share the data and conclusions.

As many of us would agree, 2007 has been marked by an increasing awareness that ad-support is going to be the primary business model for broadband video, at least in the near-term. Yet there is still much uncertainty about how best to capitalize on the advertising opportunity. So I view events like this, which further industry participants' understanding of what consumers want, as crucial to building consensus and standards necessary for the broadband video medium to succeed.

If you're interested in this complimentary webcast, click here to register.

Last week's unveiling of HDWeb from Akamai (disclaimer: a VideoNuze sponsor), coupled with Limelight's recent announcement of its LimelightHD service offering, further raise the visibility and near-term prospect of higher-quality video streaming.

Underlining this was the impressive array of support in the two press releases from customers willing to be quoted expressing their interest in HD. I read all this as putting to rest any doubts about whether content providers are interested in offering HD. Supporting Akamai's release were MTV, NBA, Gannett, while supporting Limelight's release were Fox Interactive, Brightcove, Adobe, Silverlight and Rajshri.com (India's #1 broadband portal).

Content providers I talk to are enthusiastic about pushing the quality bar, though a key issue is cost of delivery and potential ROI. Obviously to push out HD-quality streams means higher bandwidth and storage needs, the 2 key drivers of CDN charges. To support higher costs, improved revenue potential is required. And this is why HD rollouts are dependent on broadband video advertising prospects.

With ad support the primary business model for broadband video, I think a chicken-and-egg dynamic between ads and HD is going to play out. The better the ad revenue prospects, the more willing content providers will be to invest in HD. This is a reminder of why further maturing of broadband video ad models and supporting technologies are so important. So while the paid download model will also continue to grow, if you really want to get a handle on HD's prospects, keep an eye on the broadband video ad business. Continued traction will govern how much HD we'll all be seeing.

In the mean time, HDWeb from Akamai provides an enticing glimpse of an online HD future. I had no problem accessing its content over my standard Comcast broadband connection. The video quality is unlike anything I've yet seen online. If you get a chance, take a look at the NBA highlights clip (screen shot below). The clarity is mind-boggling.

Announcements from both ScanScout and Digitalsmiths continue to show that ads against UGC video may become more viable. There has been much skepticism about whether the vast trove of UGC video will be monetizable. Concerns about UGC monetization have been partly behind the recent emphasis by traditionally UGC-centric sites like YouTube, Metacafe, Veoh and others to move up the video quality food chain by offering branded or independent video.

Last week ScanScout announced trademark approval for its "Brand Protector" technology which is aimed at allowing advertisers to have their messages accompany only content that is deemed appropriate. And today Digitalsmiths (disclaimer: VideoNuze sponsor) has announced "AdSafe", which has the same basic intent and may also functional at a more granular levels of acceptability. Both of these initiatives are should be read as good news in helping the UGC ad market get its footing. Brands looking to harness the power and popularity of UGC video should definitely be investigating these kinds of solutions.

Today Digitalsmiths also introduced "AdIQ", which brings the concept of "conquest ads" to the broadband video advertising world. For those unfamiliar with conquest ads, this is when a brand in the same category as a competitor buys inventory where a competitor is somehow mentioned or identified in the content itself. Here's a pretty good explanation from iMedia.

So for example, say Reebok is mentioned or identified in a video scene and say Nike wants to buy an overlay ad to play at that moment. Conversely, AdIQ allows Nike to ensure that its ad never runs against Reebok (or other competitors') content mentions. This is pretty cool stuff. But how about the media buyer who gets the responsibility to administer all this? I haven't seen the implementation, but I hope Digitalsmiths has made it simple to set up and monitor these campaigns!

Maven Networks got a lot of ink today with 2 announcements, first the launch of a new broadband ad platform and the second, the launch of a new industry collaboration dubbed the "Internet TV Advertising Forum." These have been in the works for a while and Maven gave me a heads up on both over the summer.

The Ad Forum is noteworthy, as it appears to be a genuine "good guy" effort to move the whole industry forward in optimizing the ad model. Ten companies signed on for launch, including heavies like Scripps, Fox News, Oglivy, TV Guide, Microsoft, DoubleClick and 24/7.

I caught up by phone with Kristen Fergason, Maven's VP of Marketing to learn more. First, the Forum is completely open to everyone. Though initially underwritten by Maven, over time it will probably take on more of a "dues-paying" model. And to show that "open" really does mean open, I asked what happens if competitors like Brightcove for example, wanted in? Her reply: "we'd happily accept them".

The forum is mean to bring together agencies, content providers and vendors to build consensus about how to move past the market's current reliance on pre-rolls. Kristen said industry players have been "chomping at the bit" to get involved and Maven received 40 applications today alone. Importantly, the Forum is meant to augment IAB initiatives, not compete with them. The Forum will run focus groups and collect research based on ideas generated by Forum members to see what works and what doesn't. Results will be available to everyone.

Maven believes that a "rising tide lifts all ships", but because its ad platform is ready now, it will benefit disproportionately. That's where today's other announcement comes in. The demo I saw shows how new ad units (videos, overlays, banners, etc.) can be dynamically inserted, not just at the beginning of the video, but throughout. The result is that a lot of new inventory is available. The below graphic shows "cue points" for manual insertion, but an algorithm can also be used to insert based on what the system knows about things like clip length, average user session time, click-thru, etc. Note I didn't see this feature in action, so I can't say for sure how well it actually works.

Black Arrow has been around for a while but went under the radar for the past few months. Now it's re-emerging, with new CEO Dean Denhart installed about 6 months ago.

Dean briefed me last week on news the company announced today, which included closing a $12M B round from existing investors Comcast, Cisco, Intel, Mayfield and Polaris and officially launching their ad platform.

The company is trying to differentiate itself from many others serving ads in the broadband video space by tackling the thorny problem of also inserting in both the DVR and VOD environments. DVR insertion today is non-existent and for VOD it's not scalable. To succeed, the company will need to integrate its servers with the service providers, which is no easy feat. As many of you know, the rap on cable operators - and I've experienced this first-hand - is that selling into them wears out early-stage companies, using up precious time and capital in long drawn-out testing, selling and negotiation cycles.

If Black Arrow survives this process and proliferates its gear into headends, it will have a formidable competitive advantage against competitors. And on the encouraging side, in the cable world at least, a nascent set of standards dubbed "DVS 629" governing digital ad insertion is now being worked on. Black Arrow is following these closely. Dean explained that the company has proven in its technology and in 2008 it will be pursuing field trials and initial rollouts with major operators. Certainly having Comcast as a lead investor can't hurt its chances.

Black Arrow's real appeal to content companies will only begin when it has significant deployments. Dean explained that while the cable sell-in process continues to unfold, it will follow a parallel track of managing ads for broadband, with the longer-term value prop of multi-platform support. And it's taking a wait-and-see approach on which business model to use to fund the capex for proliferating its servers. An analogous and interesting approach is the one Akamai has mastered - i.e. not charging ISPs. Instead it positions its gear contributing to top-line growth and opex reductions. This strategy has been a massive success for Akamai, helping it achieve widespread deployments and a huge entry barrier for competitors.

I really like this company's vision; however achieving it in full is going to take tenacity, patient and deep-pocketed investors and a few good breaks.

As I have written repeatedly, robust syndication is a crucial piece of the broadband video economy. That's because advertising is going to be the main business model for a long time to come. And the only way to make the ad business work is through massive traffic increases, and of course improved ad monetization methods.

There's no better way to scale up traffic than through turnkey syndication. Google's ability to harness AdSense as a combination video syndication engine and monetization platform for content providers (by eventually marrying video units to AdWords) is unmatchable by anyone else.

As Google expands this initiative, it will be simultaneously alluring and threatening to others. Trying to capture the same benefits without the same underlying technology infrastructure and far-reaching distribution network is going to be very challenging to replicate.

Take for example, Hulu, the News Corp/NBCU JV, meant to regain control over their broadcast TV programs. Hulu has been striking its own distribution deals and will no doubt monetize its traffic with a "feet-on-the-street" ad sales approach. While there are benefits to this approach to aggregate the biggest sites as partners, Google's one-stop syndication/monetization capability provides the turnkey, hands-off approach needed to gather up the all the rest of the market (i.e. the Long Tail).

Depending how Google chooses to split the revenues between AdSense partners and content providers, Google/YouTube could well become a dominant part of the broadband-centric video value chain that is now taking shape.

Two conversations I had last week, with executives at two separate independent video content companies, one based on a pay model, and the other on an ad-supported model, struck the same theme: the "grass must be greener" for other's model.

These conversations were illustrative of others going on across the video landscape today. Everyone's grappling with which model offers more profitability, stability and growth. At least for now, ad-supported appears to have the "greener grass".

Paid sites are struggling with the fact that so much video has come online in the past couple of years that the bar to get users to open their wallets moves higher each day. The question becomes, "what sorts of video are consumers truly willing to pay for when so much is now available for free?" Of course, the more free stuff there is, the less compelled users feel to pay, even to get something good. Thus a major struggle ensues for pay sites to generate sufficient volume to become profitable.

The rising supply of video makes life equally tough, if not tougher, on the ad-supported sites. Breaking through the noise with quality content is no simple trick. Great content is table stakes. I think the real differentiators are great marketing and distribution which leads to significant awareness, traffic and revenues. So skills like knowing how to create a viral wave, strike partnerships with portals that have real teeth, and syndicating to many smaller players, are all paramount. And that's all before the skills required to sell ads and actually generate revenue.

The grass will remain greener for ad-supported for some time to come. When broadband to the TV becomes widely adopted, Hollywood is willing to cannibalize DVD revenues, formats are further standardized and consumers are better acclimated to broadband delivery, the pay model is going to take off. The ad-supported model is no layup, but with the right ingredients, success is currently attainable.