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Future of Online Advertising – Clearspring Raises Big Round – Social Media and Social Advertising May 21, 2008

Posted by John in Technology.
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Clearspring just secure what is being talked about is a big round. Ok I have an opinion on this. At PodTech we were one of the early players in having a deployable widget (player) with content emebbed. I can tell you that there is a big revenue model coming. Some just don’t see it yet.

I think that Clearspring could have fetched a much higher number like $30-40 million. Why because it’s about infrastructure and analytics. Online advertising is changing. Just look at Twitter. Clearspring has a bigger monetization opportunity than Twitter yet Twitter has all the VCs in a raging auction. Clearspring has a deeper opportunity.

Readers of Furrier.org know my opinion on the changing online advertising market. A new metric will emerge. Alot of us insiders know this and are racing to build the solution. Who will win? Clearspring has a great chance and is more than viable. It’s a billion dollar business.  Oh yeah Clearspring has big media companies adopting as well – that’s all upside.

I think that this financing represents the growing trend of convergence within online advertising and social networks.

I won’t even talk about the media and search opportunity that I see with widgets and infrastructure data. Hmmmm..

Comments»

1. Mike Berkley - May 21, 2008

Thanks, John. I like your thinking on this.

I would clarify, however: Clearspring is only half of that billion dollar business. The half they are missing is content management. Clearspring is only a shell that wraps around content, facilitating social distribution of that content. Clearspring does not have any reach into the content (or widget) itself. Right now, a user of Clearspring is left to his/her own devices to manage the content within the widget (program new shows, update existing content, filter and monitor user-generated content submitted by viewers, etc, etc).

SplashCast, with its content management, syndication, and social player / widget capabilities, provides the other half of this billion dollar business.

BTW, SplashCast had the first multi-file player widget in the market (Jan 2007), even prior PodTech. 🙂

Apologies for the self-promotion here, just want to be sure we’re discussing the full scope and opportunity.

Cheers!

-Mike

2. John Furrier - May 21, 2008

Thanks Mike. PodTech had it in Fall of 2006 and the tracking to go along with it. PodTech abandoned that direction when I left. Great to see Splashcast doing the right thing – this area is very relevant.

3. Mike Berkley - May 21, 2008

Also, because the Clearspring product does not have a direct relationship with the content (or knowledge of the content), it can only provide minimal value for advertisers (non-endemic, run-of-network junk ads).

The closer the technology is to the content (or the more knowledge it has about the content), the more valuable that technology is to an advertiser. Google on one end of the spectrum (the valuable end) and MySpace on the other end (the non-valuable end).

I love Clearspring and think they have a great thing going. But it is foolish to think that their current product and model is a billion dollar business…. without some major additions.

4. John Furrier - May 21, 2008

Good points. Key to success is the massive reach and analytics that they provide. I agree and you know I’ve been shouting from the twitter mountaintop that content is key to engagement so I’m sure they will find a way to take that valuable data and roll out new stuff

Great conversation.

5. Mike Berkley - May 21, 2008

Indeed. I hear your twitter shouts with lots of interest! BTW, still think you would make a great panelist for LiSA: http://lisa08.com. DM me.

6. gregory - May 22, 2008

new advertising model is indeed emerging, it has to, going to go through your archives to see what you have said …

7. Andy - May 22, 2008

It’s interesting that RawVoice is being left out of the discussion have you all seen what they have built? Their RawVoice Generator is an unbelievable platform that no one else is even close on, and a media statistics service that to date no other service even comes close.

I am on a podcast advertising deal with them that has allowed me to be full time in the space for over six months now, and their latest community update showed the had about 35 million downloads a month and over a 1000 shows on media buys.

They are the sleeping giants that no one gives any credit.

8. John Furrier - May 22, 2008

Andy: I think that RawVoice is a great startup led by Todd Cochrane. I wasn’t clear that they had the viral player, but seeing Todd and his team at CES it’s clear that RawVoice has a great set of content *and* a platform of analytics. Also they have been doing great in a confused ad market around podcasting. They are innovative and smart.

Unlike Clearspring which is doing billions a month RawVoice just doesn’t have the reach of a Clearspring. That being said I’m a big proponent of podcasting both audio and video. Those social media elements work for advertisers but the CPM based mindset just isn’t a fit for the value that a RawVoice has developed. So what we have here is a confused capital market and confused ad market when it comes to the true value of a RawVoice.

Personally, I think that RawVoice is of big value and if they keep on working the ad market and stay on top of the platform opportunity then they will do very well.

I will have to contact Todd. If you know Todd or RawVoice have them contact me. I’d love to loop then into the discussion. They have smart staff over there. And they also have GeekNewsCentral blog which has been around for sometime.

As an aside they are in Hawaii so sometimes they aren’t in the ‘chamber’ here in SV or East Coast to weight in. Thanks for the comment.

9. Todd Cochrane - May 22, 2008

Hey John and thanks Andy? for the mention on RawVoice. Yea I wish we were doing Billions but their simply is not that much user generated content to monetize. We have done very well with the content that is capable of securing sponsorships, in fact much more successful in fact than all of our competitors who have deep financial pockets.

We have a huge number of podcasters on ad buys, I think we have over a 1000 content creators at this point on a variety of deals from Flat Rate, CPM, CPA the key here is we are putting huge dollar amounts each month into their pockets.

I have found that the majority of media buyers, of which I have met nearly 50 this year alone are having major issues getting their clients to move off the old models. Sure they are in digital but they are in bed with the same old media clients they have been for years.

Much of it has to do with “politics” in the advertising space along with the executives at companies they represent that have become to comfortable with the old way of doing business and are slow to change.

While we have been lucky through hard work, low overhead etc, that we have been cash positive as a company from the beginning. We also have a lot more than just advertising moving us forward, we do count on advertising for about 30% of our revenue in our business plan but we can survive without it.

The Generator and New Media Stats service has been a huge success much greater than we thought it would. So as we continue to add features to all the products we are quite confident that someone will realize what we have accomplished on our own without venture funding and outside the valley to boot and with a team spread across the United States, I am pretty happy with the bottom line it has been pretty remarkable.

Again Thanks to Andy for the vote of confidence and John for taking time to respond.

10. David Dalka - May 23, 2008

Extremely interesting thoughts.

I love what you are saying about new metrics. In financial services, I created new metrics all the time, it’s a slower process on the web for a variety of reasons….

11. Jimmy - May 23, 2008

why isn’t podcasters and bloggers making money?


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