Sharethrough, a social video advertising network, is announcing this morning that it has raised a $5 million Series A round led by North Bridge Venture Partners and Floodgate. Co-founder and CEO Dan Greenberg brought me up to speed last week on the company's strategy.
Sharethrough is focused on providing distribution in social networks for branded content. This has become an increasingly popular format for brands that want to go beyond traditional 15 and 30-second TV advertising to use online video to create more engaging messages. Dan points out that the really hard part for these brands is actually creating an audience for their branded content. Unlike traditional TV where a certain number of TV spots or impressions are simply purchased, Dan's view is that branded content, when placed in suitable social media contexts, can generate high sharing rates and viewership.
Sharethrough's distribution network is composed of social media and gaming sites, where users are predisposed to viral sharing. Currently about a third of the network is sourced from each direct publisher relationships, ad networks and ad exchanges. Approximately half the units Sharethrough is using today are standard 300x250 rectangles and the other half are more creative custom units and editorial placements negotiated by Sharethrough. In all cases the units come with a "Share" button that allows the user to easily disseminate the video to their own social networks. Based on 200+ campaigns Sharethrough has already run, Dan said it is generating up to 3x higher viewership compared with traditional paid media (demos are available here).
There are 2 keys to these results: first, making the video itself feel much more like content than advertising (hence the push for custom placements) and second, the idea that when a downstream user receives a shared video it is conveyed with higher trust/endorsement, and is therefore more prone to be viewed. As a result, the brand receives a better ROI than with traditional video advertising.
The idea of marrying social engagement model with branded content makes sense, to the extent that users feel the branded content is actually entertaining, and therefore worthy of being shared. That ups the ante for brands to creatively use the online/social medium to deliver something very different from what they've typically done on TV.
For Sharethrough, if it can define a new way of targeting social media users and engaging them on their terms, it will be an appealing outlet for branded content providers who need a scaleable way to find audiences beyond simply hoping for a viral hit. To one extent or another Sharethrough is competing with other video syndication platforms like Grab Networks, along with big video ad networks like Tremor, ScanScout, BrightRoll, etc. which are also looking to place advertisers' content in the most compelling online context. Relative to these companies, Dan sees one of Sharethrough's key differentiators as its social media DNA and complete focus on the space.
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