Again: Video Ad Model – It’s MicroContent NOT Pre-rolls

Whew it’s about time a report like this came out.   I said it in a post right after ad:tech in New York that it’s Microcontent for ads online.  Now it’s affirmed by the data.  Silicon Alley bluntly states the obvious.  Everyone hates pre-rolls – lets get used to it and move on. 

The online advertising model is the content itself.  When I founded PodTech two years ago it was clear this was the trend.  Now Microcontent is going mainstream.  Why?   In social networks that have microtargeting microcontent works.  Contextual content meets a targeted user. 

Opportunity for brands:  Activate your brands online now for the next cycle of innovation.  In web 1.0, companies activated their brands with web sites.  In Web 2.0 and beyond, brands need to be activated online with content on a platform that enables targeted distribution in micronetworks.

Activating brands online isn’t about putting up a fan page on facebook.  Instead, it’s about providing ‘great’ MicroContent.  – with great tracking. 

All the web 2.0 social media talk today is about brand engagement, but you can’t have engagement without brand activation.   For all the brand marketers out there ask yourself the following question:  are my brands activated online?  and if so how?

Finding The Next Google – We’re Getting Close

Everyone has been looking for the next Google — well at least here in Silicon Valley.  When I saw this article the first word that came to my mind was “validation”.  I’ve often been called crazy for saying that the next Google will come from media not technology.  It’s becoming clearer that this is happening.  Advertising dollars move based upon who can understand user behavior.  Google did it with web pages in Web 1.0, but now in Web 2.0 it might be a media company like NBC Universal. 

Media Content networks (TV networks, corporate networks, studio networks, event networks, etc) will be a viable business model.  It is known that venture capitalists here in Silicon Valley reject the notion that content is a viable business model.  However, this NY Times article by Matt Richtel validates the idea of Microcontent as a business model.  My original intention with PodTech was to create a content platform business.  I did not have the opportunity to finish what I started (My VCs removed me from employment at PodTech last summer – PodTech is now focused on breakeven cash flow positive and is very close to achieving that goal).   

At Adtech in NY it was clear to NBC’s Beth Comstock that the big networks, studios, and advertisers were formulating their plans around emerging Internet content business models.  NBC Universal is clearly focusing on this now.   Hey Beth, NBC could be the Google of the media business if you move fast.

It is my opinion that Microcontent is the best online advertising business model – why?  It’s the contextual keyword for the media business.  What Adwords and Adsense is for Google – Microcontent is to media networks.  Microcontent targets the audience, and provides the best opportunity to deliver the smartest marketing information from both behavioral and contextual advertising.  If you add in the ‘flat’ global Internet then you have the ability to sell global, regional and local ads.  This is huge.  It is the future of online advertising, because now video ads once only made for broadcast TV can viably move to the web at scale. 

How fast will this happen?  It is hard to tell, but I’m watching HD as the key variable for this timetable.  Specifically, the timetable is highly correlatated to the speed at which Intel, AMD, Adobe, and Microsoft move to achieve the computing and web display technologies such as flash players, widgets, xbox,…etc.  (The other variable that I’m watching is too crazy to talk about in public at this time but it has to do with video).

This is opportunistic news for web 2.0 content folks and emerging indie networks.  Tip of the hat to Matt Richel of the NY Times for getting IMHO one of the biggest “little” stories coming of CES.  

Overiew of Current Web Video Ads Solutions – Inside the Numbers

What is the current web video marketplace today for advertisers?  What are the options? How much?  This compilation by WebVideoReport documents the going asking rates for different kinds of ads connected to Web video.

Web video is growing rapidly and the solutions are changing.  I’ve been very public about new solutions around social media and I think that they are coming fast.   That being said the one thing that is important is standards.  In today’s marketplace the standards are basic but functional – pre-roll, companion banners, and network buys.  Why?  Comprehensive targeting and behavioral solutions don’t exist yet.  Add another new trend like collaborative ad – where consumer contribute to the ads- and you have really crazy change.  Well for now it’s preroll and companion banners. 

Below is a sample of some of the populare solutions.  There are many left out like PodTech which does custom ad solutions for viral social media, Facebook the leading social networking site, LinkedIn – the leading B2B contact mgt and business social portal, and handful of ad networks.   Outside of PodTech, Facebook, and LinkedIn the rest of the market is similar to what is outlined below.  PodTech, Facebook, and LinkedIn offer an entirely different value proposition than CPM based solutions.  For more on why I think PodTech, Facebook, and LinkedIn are valuable  see my post on Microcontent for Microtargeted environments.

PUBLISHERS
Wall Street Journal
The Wall Street Journal, the flagship newspaper for News Corp.’s Dow Jones company, is building out its video advertising content as an adjunct to the subscription revenue and static Web ads it sells on WSJ.com.

Ad rates: The CPM for video on WSJ.com is $90. For more information, see the video sales sheet.

Web video ads offered:

A 15-second pre-roll

A coordinating 300×250 ad unit that is visible above the content space during the pre-roll video

An expandable reminder unit that remains to the right of the video “You Are Watching” headline. When a user clicks “Expand”, the 300×250 unit displayed during the initial video pre-roll ad will reappear, enabling further user interaction.Integration: The Wall Street Journal sells video advertising packages that run across the Wall Street Journal Digital Network, which includes WSJ.com, Barrons.com, MarketWatch.com and AllThingsD.com.

Past clients: Recent video advertisers include Skyy Vodka, Cisco, IBM, HP, Jaguar, Knight Capital Group and Mercer Consulting.

CondeNet
The Conde Nast magazine empire’s online incarnation includes properties such as Epicurious.com, Concierge.com, Style.com, Men.Style.com, and Flip.com.

Web video ads offered:

Pre-roll ads

Companion Ads (300×250)Integration: CondéNet has established relationships with major portals including MSNBC, Yahoo!, YouTube and other video sites to distribute its content and accompanying ads.

Past clients: American Express, Visa, Bertolli, Hilton, Nestle, Haagen Dazs, Charles Schwab

Ad Prices: Flat Fee Sponsorships or CPM. CondeNet declined to share details on pricing.

Advertising Age
This Crain publication, a sister to WebVideoReport.com and TelevisionWeek, is the leading news source covering the advertising industry.

Ad rates: Flat rate for pre-roll only, custom pricing for integrated programs. For instance, a video ad in the Garfield’s Ad Review feature costs $15,200 for four weeks and $124,800 for 48 weeks.

Web video ads offered:

Pre-roll

Video in bannerIntegration: AdAge also sells Web-video ads packaged with standard online, print, mobile, RSS feeds, and events

Past clients: A&E, Video Egg, Meredith

WEB VIDEO SITES
YouTube
YouTube, the biggest video sharing site, hosts user-generated and professionally produced content. The site, a Google subsidiary, is experimenting with ways to wring revenue from its content, offering a variety of Web-video ad formats.

Ad rates: According to parent company Google’s Web site, advertising on YouTube requires a $50,000 spend within 90 days. On brand channels, advertisers must spend $250,000 across Google and YouTube, including $100,000 or more on YouTube only. A YouTube home page roadblock is a $100,000 per day flat fee plus a $100,000 incremental spend on Google and YouTube within 90 days. The company said on its site: “Currently you can apply to advertise directly with YouTube if you’re willing to spend a minimum of $50K and you’re interested in running a large branded campaign. This advertising option requires an authorized contract or purchase order with YouTube, and ads are served on a reservation-purchase basis, rather than the AdWords auction model.” For more information, click here for their guide. Companies wanting to advertise on YouTube for less can sign up for Google AdWords for as little as a $1 CPM.

Web video ads offered:

Home page video ads

Video ads

Traditional display ads

No pre-roll adsIntegration: Through Google’s content distribution via AdSense, YouTube video units are syndicated to Web sites across the Google Content Network. There have also been integrations, for example, between Google Gadget ads and contests on YouTube.

Past clients: Adobe, Verizon Wireless, Samsung, BMW, MGM

MetaCafe
Metacafe is one of the first generation of video-sharing sites. The site offers short-form, original video content that gives users entertainment breaks. The sites users identify the most popular videos and the site’s producers’ rewards program pays video creators for their best work, as determined by the viewers.

Ad rates: Rates range from $10 CPM to $35 CPM, depending on placement. The rate card for pre-roll, and home-page sponsored video units is $35. The rate card for overlay ads is $20, and a static companion ad runs from $10 to $20.

Web video ads offered:

Home page player

Search results page player

Pre-roll

Overlay

Companion ads next to pre-rolls and overlays (300×250 to right of player and 468×60 below player)Integration: Metacafe said it offers a range of ad programs, such as basic in-stream options of flash overlays, and pre-roll and post-roll ads. The site also offers accompanying companion units as well as customized home-page programs, mash-up tools, custom content integration, as well as various types of product placement.

Past clients: Adidas, American Apparel, Axe, American Online, Activision, Barilla, Carlsberg, CanalSat, Canon, Coca Cola, Colgate Palmolive, Dove, Ford, Gillette, Goodyear, Heineken, Heinz, Kodak, Lancome, Lego, LG, Match.com, Merck, Mentos, Microsoft, Miller, MTV, National Geographic, Nike, Nokia, Orange, Orbit, Palmolive, Peugeot, Pepsi, PS2, Playstation 3, Real Networks, Renault, Rockstar, Samsung, Sega, Skype, Snickers, Sony Ericsson, TCM, 20th Century Fox, Ubisoft, Universal Pictures, Virgin, Visa, Vodaphone, Xerox.

No Good TV
No Good TV (www.ngtv.com). No Good TV is part of the profusion of ventures creating short content and syndicating it across the Web. The site recently caught the attention of the traditional TV community, and syndicated evening show “Extra” will be integrating No Good TV segments into its Monday-Friday program.

Ad rates: CPMs range from $15 to $40 and vary based on length of term, extent of exclusivity and customization. All sponsorship agreements are customized for each individual client.

Web video ads offered:

Banner ads

Overlays

Skyscrapers

Alpha video

Transitional pages and full channel sponsorship

Pre-roll and post-roll (15 seconds or less)

No Good TV can also create “parody” pre-roll, post roll and full promotional spots using real products/brands in a humorous scripted vignette.

Sponsorship agreements can range from traditional banner ads to integrated original live-action or animated short-form series programming.Integration: No Good TV said it offers customized and strategic product and brand integration into the program content. Advertisers integrated into No Good TV’s show also gain additional exposure on YouTube, which carries a No Good TV channel, which is currently the fourth most-viewed YouTube partner of all time. Additional brand exposure includes event presence and party sponsorships.

Past clients: Microsoft’s Halo 3, Universal Studios, Sony and Avid

Break.com
Break is a video-sharing site that aims to engage young male viewers that advertisers are interested in reaching. The site shows over 12,000,000 videos and 5,000,000 pictures daily.

Ad rates: Traditional placements range from $10 CPM to $35 CPM. Rates for video placements and custom sponsorships vary by project.

Web Video Ads:

Flash overlays

Pre-roll

In video bugs

Accompanying companion unitsIntegration: Break lets clients advertise within original content and user-generated content. Break also can integrate brands into its rich media ads. In addition, Break will develop customized sponsorships such as home page programs, content integration, and product placement.

Past clients: Anheuser Busch, Axe, Burger King, Diageo, EA, Honda, Jim Beam, Keystone, MTV Networks, NBC Universal, Nike, Paramount Pictures, Universal Pictures, Sony Pictures, Verizon, Viacom, Vivendi Games, Warner Brothers Home Video
SOCIAL NETWORKING SITES
MySpace
MySpace, a News Corp. business, is the biggest social networking site. The Web site users set up pages into which they can plant music and video, and MySpace offers entertainment channels with exclusive, original music programs, as well as video shows.

Ad rates: A pre-roll video in the music section of MySpace.com (15-second video with a 300×250 pixel ad unit) carries a $25 CPM.

Web video ads offered:

Pre-roll

Mid-roll

5-second pre-roll bumpers

Banners and display ads also live on pages with videoIntegration: MySpace ads are sold solely on MySpace.

Past clients: Ford, Toyota, Hairspray the Movie

New Emerging Solutions:  PodTech, Facebook, LinkedIn

There are many left out like PodTech which does custom ad solutions for viral social media, Facebook the leading social networking site, LinkedIn – the leading B2B contact mgt and business social portal, and handful of ad networks.   Outside of PodTech, Facebook, and LinkedIn the rest of the market is similar to what is outlined below.  PodTech, Facebook, and LinkedIn offer an entirely different value proposition than CPM based solutions.  For more on why I think PodTech, Facebook, and LinkedIn are valuable  see my post on Microcontent for Microtargeted environments.

Social Networking Online Advertising – It’s Video but not Pre-rolls

This is a repost from an email that I received from Sam Levin.  Social Networking online advertising opportunity is not about Facebook or some social network.  To me it’s about video advertising.  Broadcast TV ads are moving to the web.  It will be video that cracks the high yield advertising value proposition, and it will be the biggest money maker. 

——- Social Networking is Hot

This year, 37% of the US adult Internet population used online social networking at least once a month. That figure will rise to 49% in 2011.

”The continued growth of social networking seems assured,” says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Social Network Marketing: Ad Spending and Usage, “unless teens stop social networking as they become adults.”

Don’t bet on that.

Currently, 70% of all US teens visit social network sites on a monthly basis.

“By 2011, one-half of all online adults and 84% of online teens in the US will use social networking each month,” says Ms. Williamson. “There is little to suggest that this activity will go away.”

When it comes to translating eyeballs into advertising revenues, eMarketer projects that worldwide online social network ad spending will grow from $1.2 billion in 2007 to $2.2 billion in 2008, 82%.

Worldwide spending will top $4 billion in 2011.

In the US, spending is projected to rise to $1.6 million in 2008, from $920 million in 2007.

”MySpace and Facebook together receive more than 70% of all US social network ad spending,” says Ms. Williamson. “And they are hard at work to convince marketers to allot more of their budgets to social network advertising.”

The advertising offerings of the two social network giants are becoming more diversified, and now include not only profile pages but search, display ads, widgets and more.

“But if social network marketing delivers on its promise of peer recommendations the flow of advertising dollars will turn into a flood,” says Ms. Williamson.