Posts for 'Advertising'

Kudos to MSN for evolving the pre-roll format by announcing they'll only insert at the beginning of a session and then only every three minutes.  This "capping" policy is yet another effort to make pre-rolls more digestible. 

Like it or not, pre-rolls are here to stay.  They're an easy re-use of expensive creative.  They're straightforward to see, because they're easily understandable by buyers. And while few viewers will admit they want ads, with better targeting, they're actually a familiar experience for viewers and could be useful.

Everyone I talk to agrees.  Especially in the broadcast community.  So while overlays and other formats will make inroads on pre-roll's turf, significant attention should be focused on improving the pre-roll experience and effectiveness, because that's where a lot of the ad dollars will remain.

So moves like MSN's are welcome.  The question of course is, what effect does this capping policy have on their inventory and economics?  The question of fleshing out the ad-based broadband video business model persists.  If MSN can demonstrate viewership and satisfaction increase, and the economics work, I expect other aggregators and providers will experiment with this approach as well.

On Friday I had a chance to meet with and get an update from Waikit Lau, COO/President and Co-Founder of ScanScout. They had given me a heads up earlier in the week about this morning's announcement of a strategic investment by Time Warner and new board member appointments, so I wanted to get a closer look.

ScanScout is among a group of companies that are trying to improve monetization of broadband video by using analysis techniques (e.g. audio, visual and metadata) to deliver highly contextual ads that go beyond conventional pre-roll ads. This group includes, to one extent or another, Digitalsmiths, Yume, Adap.tv, blinkx and Nexidia. ScanScout's format of choice is the "overlay", subject of much recent rabble following YouTube's decision to jump on this format's bandwagon.

Waikit explained that ScanScout sees its secret sauce in "extracting signals" (or descriptive data) from video streams, identifying semantics and correlations of like data and enabling "brand protection."

ScanScout first analyzes video content to characterize it so that scenes can become valuable in a way that today's keywords are. This is done though speech recognition, visual analysis and meta-data collection. Next, ScanScout technology is crawling the web each day to find all nouns and pronouns to determine how they relate to one another. By understanding these correlations and the underlying semantics, ScanScout's system becomes smarter, in turn enabling its advertisers to optimize their targeting. Finally, ScanScout's "brand protection" allows advertisers to de-select certain kinds of content and keywords so that their ads don't run in those offending videos.

The company is focusing on a network business model, so it's trying to sign up as many valuable publishers as possible to build its inventory, while also enticing advertisers and agencies to allocate some budget to its platform. Certainly having Time Warner in its corner will help the company gain access to the trove of TW content. However the company isn't focusing solely on big branded content. Waikit favors "torso" video (in Long Tail-speak, content between the head and UGC), that is monetization-challenged. And the company is focusing now on the entertainment vertical and on shorter form content, which Waikit sees as ideal for the overlay format.

It's a pretty cool model, but still needs time to be fully proven. Big brands love the CPMs they're getting for pre-rolls, so overlays are going to be less appealing for now. And for ScanScout and all its competitors, the proof of their wizzy technology will be tangibly improved targeting leading to higher user click-throughs and engagement. It's still too early to know whether the science leads to actual results. But with broadband content providers large and small scrambling for improved monetization, ScanScout and the others are playing in very fertile ground.

WSJ reported today that DailyMotion, the French video sharing site, has raised $34 million in a round led by Advent Venture Partners LLP of London and AGF Private Equity. This financing adds to a wave of capital that has poured into the overall ad-supported video sharing/video aggregator platform space in the last few months.

Companies that I think fit in this group that have recently raised big money are Joost ($45 million), Veoh ($26 million), Metacafe ($30 million) and blip.tv ($10 million). Hulu, the NBC-News Corp JV which raised $100 million could even be considered in this category. And thinking a little more broadly you could include sites like Heavy.com, Break, Vuguru, Next New Networks, DaveTV, Babelgum, BitTorrent and others which are creating and/or aggregating broadband programming.

To be fair, each of these companies has a slightly different approach to their content strategy (pure aggregation vs. original development vs. hybrids), market positioning and technology capabilities. However, as best I can tell, they're all trying to offer distinctive video content into broadband-only delivery networks and to one extent or another, surround this programming with interactive tools. The intended result is unique viewing experiences.

In the aggregator roles they play, they're muscling themselves into the market owned by traditional video distributors like cable and satellite operators, and more recently telcos. These new companies are all very interesting to watch because ultimately they must do at least 3 things to generate traffic and revenue: (1) differentiate themselves from each other, (2) add value to content providers/producers relative to CPs/producers relying solely on a direct-to-consumer approach and (3) shift viewing time from the traditional distributors' programming to their own.

Any one of these would be a pretty high hurdle to get over. Doing all three will be even tougher. Yet a lot of smart money keeps backing these companies, further demonstrating how hot this overall category is -- and how quickly it could become overfunded. But I don't expect things to cool down any time soon. We can expect further funding in this space as investors clamor to get a piece of the action in broadband video.

On Friday, AP carried the news that Google intends to stop offering paid downloads at Google Video and that it will discontinue support for any downloads made since its launch. Thus ends one of the most anachronistic initiatives I've observed in the broadband video industry.

I was at CES in January 2006 when Google co-founder Larry Page delivered a keynote in which he launched Google Video Store. The press release is here. My recollection of the event is still quite vivid. First, it was such a mob scene that just finding a place to watch the speech was an exercise unto itself. I ended up watching it in a courtesy tent packed cheek-to-jowl with hundreds of others.

As Larry introduced Google Video Store, I kept thinking to myself, "How is that a company with Google's IQ could have made such a startlingly bad product decision?"

Go back to that time for a moment, and imagine that you are Google. You are the foremost company in the world at monetizing content through advertising. You have the ability to meet with the CEO of every major media company in the world -- companies whose video is disproportionately supported by advertising. You have the opportunity to suggest trials, experiments and potentially longer-term deals to bring these companies' video online in an ad-supported manner. You can tantalize them with online riches beyond what they currently collect on-air. And you can be their trusted partner, with the Internet's leading technology, to help figure it all out.

(By the way, at the time, Google's official word was that their choice of the paid model was the only way they could get their hands on full length programs. Yet, just 3 months later, Disney/ABC announced online distribution of ad-supported full length programs. So this was clearly already in the works before January, 2006).

Instead of doing all of this though, you decide to launch using a commerce model, thus completely turning your back on all of the company's massive online advertising horsepower. In doing so, you choose to compete with Apple's iTunes, which has dominant market share and is seamlessly married to the wildly popular iPod. And in an act of arrogance and silliness, you decide to launch your own player, thus rendering all of the premium video incompatible with WMP, Flash, Real and other devices.

And yet, all of this is exactly what Google did. Somehow it managed to persuade premium content providers like Sony BMG, the NBA and Charlie Rose to partner. And it even managed to get Les Moonves, CBS's CEO to come on stage with Larry and make a fawning speech about how excited he was to be a part of all this action.

Now in August, 2007, 20 months later, Google Video Store is dead. Hallelujah. What a ridiculous distraction it has been. I have written over and over that I believe Google is one of the best-positioned companies to exploit broadband video. And yet, like Yahoo most prominently, I still view Google (outside of its YouTube acquisition) as all thumbs in this important new market.

For example - whatever happened to Google's deal with MTV to syndicate its content through the AdSense network? Did anything important come out of that, which might be used for other partners? What's going on with "click-to-play" video ads? And, any updates on Google for TV ads announced in April with EchoStar? Then there's the overhang of the Viacom lawsuit and the introduction of ‘fingerprinting' technology from Google to deter copyright violators. Recently it's looked like its introduction is imminent, and yet no firm timetables have been established.

I'm still expecting big things out of Google in the broadband video area, and I was encouraged to see Gabriel Stricker say in the AP piece that "The current change is a reaffirmation of our commitment to building out our ad-supported...models for video." I hope Google means it.

• Golf Channel “The Drive” Premium Membership - $29.95/year (lots of instructional video – makes sense to charge)
• CourtTV “EXTRA” - $5.95/mo (feeds of multiple trials simultaneously, for the armchair criminologists among you)
• Weather Channel “Desktop Max” $29.99/year – (really the ad-supported Desktop service, but minus the ads, and also more comprehensive than just video)

I was at Streaming Media East today, moderating a session (“Broadband Video: What’s the Formula for Content Success?). First off, kudos to Dan Rayburn and the SM team – there was a ton of energy at the conference, lots of exhibitors and great sessions.

I got a chance to sit in on Martin Niesenholtz’s keynote. As many of you know, Martin’s the longtime SVP, Digital Operations, for the New York Times Company.

• 5M streams/month – up 3x from a year ago
• 20 people dedicated to video
• 100 new video pieces created/month

Martin shared a back-of-the-envelope analysis he’s done to back into how many streams the Times needs to provide to generate $30M in annual revenue from video. His calculation: 60M streams per month, or 12X today’s rate. I didn’t agree with all of his assumptions (for example he assumed $60 CPMs, which is too high, yet only a 1:1 ratio of ads:streams, which I think is too low given the opportunity to surround an in-line video player with display ads), but I did think he was in the ballpark.

Google is finally starting to ramp up the use of its AdSense distribution network to deliver video. As today's NYTimes piece describes, Dow Jones, Conde Nast and others are participating. This follows on previous announcements with MTV, Sony BMG and Warner Music Group. As I said in "7 Broadband Video Trends for 2007", Google is extremely well-positioned to lead the nascent video syndication market by leveraging both AdSense and AdWords. Clearly while the major networks grapple with how to deal with Google/YouTube, other media companies seeking to harness Google's distribution might are moving ahead.

Chicago Tribune article suggests that user generated content producers being paid for their works will soon be ubiquitous. Of course Revver and others have been doing this for a while now. Steven Starr from Revver raises the “recognition vs. reward” question that undoubtedly passes through any UGC producer’s mind.

I’ve said for a while that if someone had laid the YouTube business plan next to the Revver business plan back in 2005, logic would have suggested that Revver would have better prospects given its willingness to share revenues with producers (thereby creating more incentive to post there).

However, what would have been missing from that logic would be the 2 things that I believe made YouTube an early (and big) winner – namely its willingness to push the envelope in allowing copyrighted material to be posted on its site and its superior user experience. Having won the first battle, YouTube appears poised to overlay the financial incentive long missing for content producers. If well-executed, this should make the landscape even tougher for all the others to succeed.