As a non-gamer, I've been fascinated, from a distance, by the whole "virtual currency" and "virtual goods" models that millions of gamers are so passionate about. Now it turns out there's a way of marrying gamers' pursuit of virtual currency with driving opt-in video views for major brands' online video ads. Jun Group, a social video company, has been a pioneer in this emerging space, and last week its CEO Mitchell Reichgut gave me a primer on how the model works, and why it's being adopted. Jun Group is also issuing an update on its progress today.
First, for those not familiar with virtual currency, it is used to purchase specific virtual goods which enhance the experience in online games, social networks and virtual worlds. Typically there are many different ways to earn virtual currency within any particular environment, including paying for it with actual cash (yes, buying "virtual" currency with "actual" currency - it's all part of the gaming experience!), all of which adds up to a reported $2 billion per year industry.
Jun Group has struck upon the idea of partnering with social game developers to offer targeted video ads that provide a virtual currency reward to the user when they're viewed (hence the "incentivized" concept). The ads are usually re-purposed TV spots that have various calls-to-action, such as "Liking" or "Sharing" the ad to promote its awareness and distribution, but also more campaign specific actions like downloading a coupon, etc. Jun uses its own player which surrounds the video ad with banners and buttons to trigger the engagement. This makes the implementation for brands relatively straightforward with little-to-no new creative development.
Mitchell reports that gamers are responding positively to the offers, with 90-95% completion rates and 3-5% engagement rates. Jun prices solely on a performance basis, so brands can decide exactly how many views and engagements they want to buy. Jun Group uses a variety of targeting techniques in order to offer the ads to the optimal audience and charges a relatively low cost per view with full analytics supporting each view and engagement. Jun Group promises no auto-plays, pop-ups or other view-inflating tricks.
The key here is that Jun Group is essentially creating new ad inventory, helping relieve the inventory scarcity problem many brands report today. Jun Group has worked with numerous brands such as Slim Jim, TinyPrints, Dove, HBO, Kraft and others. Again, as a non-gamer this model is a little bit foreign to me, but I can see how the interests of all the parties - gamer, game developer and advertiser are well-aligned. No doubt we're going to hear more about this model and others like it as more brands try to figure out the winning formula at the intersection of social media and online video advertising.
VideoNuze is the authoritative online source for original analysis and news aggregation focused on the burgeoning online video industry. Founded in 2007 by Will Richmond, a 20-year veteran of the broadband, cable TV, content and technology industries, VideoNuze is read by executive-level decision-makers who need to get beyond the standard headlines and achieve a deep understanding of online video’s disruptive impact.