VideoNuze Posts

A key highlight of all three reports concerns user acceptance and engagement with pre-roll ads. This format, whether 15 or 30 seconds, has accounted for the bulk of video ad revenues to date, and yet has been a key source of tension in the industry. Advertisers like pre-rolls because they feel like the well-understood TV model and in fact, where off-the-shelf TV ads are often just re-used (for better or worse). The downside of the interruptive pre-roll approach is that previous research has shown users hate the format. Contributing to users' feelings was the fact that many content providers have been undisciplined about implementing frequency caps or any sort of targeting (I myself have seen far too many tampon ads!).

Yet the Break/Panache results show that 78% of users viewed pre-roll ads for more than 15 seconds and the click-through rate averaged an impressive 10%. Similarly, the Tremor research showed completion rates for both 15 and 30 second ads of approximately 80%, a level it believes is reached because of its ad targeting and focusing on premium content only.

Meanwhile the story was about the same in Europe. According to Jupiter's research (as reported by AdAge), audience drop-off upon the introduction of pre-rolls is under 5%. Jupiter also makes the important point that at least 10% of users drop off after 15 seconds even when there's no ad present, simply because they're in channel surfing mode. That means some percentage of abandonment is due simply to behavior, not a specific ad type. This makes sense when you think about it.

I attribute much of these new positive results to users recalibrating their expectations about broadband video and the presence of ads. Here's what I think has happened:

Since the Internet's introduction, there's been a sense among users that "content is free." And with the exception of annoying popup ads, I think many users have learned to look past unrelated banner ads on standard web pages so they've come to perceive their whole online experience as largely "ad-free" as well. (If you don't believe me, ask yourself when you last clicked on a banner ad unrelated to your work.)

But as broadband video usage has grown, pre-roll ads that actually did interrupt the content experience felt jarring for many users. Naturally, when asked, users said, "ugh, we hate them." Fair enough. But consumers are smart, and have quickly recognized that, just like TV, to get high-quality video programming, someone has to pay, and since most users would rather that not be them, they've become more accepting of all ads, pre-rolls included. With premium sites employing some targeting now and becoming more judicious in their insertion practices (ABC.com and Hulu are great examples), users have become more accepting. Hence these positive research results.

To the extent that pre-roll business practices continue to improve, I think research will continue to show positive results. Whether you personally love pre-rolls or hate them, I see them very much here to stay.

What do you think? Post a comment.

Kiptronic, a dynamic ad insertion service provider for broadband-delivered video and audio has announced integrations with the two dominant ad management systems, DoubleClick's DART for Publisher and Microsoft's Atlas Ad Manager. This allows Kiptronic customers to traffic their ads from within these familiar ad management consoles beyond browser/PC-based environments.

Kiptronic plays an important role delivering ads against video that's increasingly consumed outside the browser/PC. These days video consumption is being fragmented to widgets, smartphones, downloaded apps like Adobe Media Player, gaming devices, Internet-connected TVs and more coming as the syndicated video economy gains steam.

While more viewership is obviously a plus for content providers, this new heterogeneity creates headaches for ad operations staff tasked with running the correct ads wherever the video is consumed. Kiptronic's secret sauce is inserting both in-browser and also in these disparate environments after recognizing their specific attributes. I'm only aware of one other company in this space, which is Volo Media, but as I understand it, they only insert in downloaded video.

Last week Bill Loewenthal, Kiptronic's President and CEO, and Jonathan Cobb, the company's founder and CTO briefed me on the new integrations as a follow up to a background call Bill and I had about a month ago. Kiptronic's customers are mainly premium content providers such as divisions of Fox, CBS, Time Warner and Sony BMG who place a high value on control and who have their own sales teams.

Kiptronic's key mantra has been enabling ad insertion to all these new environments without requiring any changes to customers' publishing processes. However, to date Kiptronic had required customers to use its proprietary management tool to insert their ads. For customers who use DART and Atlas, these new integrations now eliminate this step, likely boosting Kiptronic's appeal.

The whole concept of video consumption outside the PC/browser domain is a fascinating topic that content providers need to be mindful of. In the next couple of months Kiptronic is going to make data available showing the breakdown of all the places its ads are served. It's a pretty accurate data set given Kiptronic's role. Bill gave me a preview and it is definitely eye-opening. I'll be sharing the info as soon as it's available.

What do you think? Post a comment.

More news today in the fiercely competitive video management, publishing and delivery space. KickApps, a social media platform provider and Akamai, the leading content delivery network, have announced a partnership integrating KickApps's Video Player Studio with Akamai's Stream OS video management system. On Friday I spoke to Michael Chin, KickApps's SVP of Marketing to learn more about the joint offering's benefits.

I look at this deal as a front-end/back-end marriage, bringing together the two companies' complimentary capabilities as they seek to stake out new advantages in this market. KickApps, which has a roster of media companies, sports teams and others using its turnkey social media applications, has recently released its Video Player Studio, enabling customers to build on-demand customized video players for their sites.

Meanwhile Akamai's Stream OS has been focused on the back-end tasks of video management and publishing, such as uploading/storing/editing video and metadata, distributing video through managed RSS feeds, and controlling syndication through business rule creation and geo-targeting.

Michael sees the joint offering's key differentiators as comprehensive out-of-the box functionality, improved flexibility/time to market and integrated social media features (rating, tagging, commenting, etc.).

KickApps is also counting on financial benefits to lure customers. It uses pay-as-you-go CPM-based pricing vs. the typical platform license fee model used by others. Large media companies usually buy out their entire KickApps-generated inventory at an agreed-upon CPM, while smaller companies stick to an ad revenue share approach. Another financial lever in the deal is that KickApps has negotiated very favorable CDN pricing from Akamai, which gives it more pricing flexibility for customers.

Michael believes that between the broader feature set and pricing advantages, the KickApps-Akamai joint offering will be well-positioned to appeal to customers of competitors like Brightcove, Maven (Yahoo) and thePlatform (Comcast), not to mention smaller players in the space who have narrower feature sets.

The KickApps-Akamai partnership continues to raise the competitive bar in this space. These are important, real differentiators the companies are using. That said, this space is very fluid, and in the coming weeks there will be at least 3 other companies which I've spoken to recently which will raise the bar in still other ways. This is a space that continues to evolve, as customer needs shift and their revenue pressures intensify. More news coming soon.

What do you think? Post a comment now.

(Note: Akamai is a current VideoNuze sponsor and KickApps is a former sponsor)

Last Friday, in "Get Ready for the Broadband Olympics," I posited that the '08 Beijing Games would be looked back upon as the first "Broadband Olympics." NBC has made a massive investment in delivering the portions of the Games both live and on-demand via NBCOlympics.com and other outlets. A week into the Games, the broadband coverage and user experience is exceeding my and others' expectations.

First the numbers, which are staggering. NBC has been pumping out news releases on a daily basis touting their Total Audience Measurement Index or "TAMi" rating, broadcast audience records and online usage. Focusing just online, through yesterday NBCOlympics.com has attracted 25 million unique visitors, driving 456 million page views and 22 million video streams which total 3.5 million hours of video consumed. These figures easily outpace the '04 Athens Games.

A major drawing card in the '08 Games is of course Michael Phelps's drive for 8 golds. And so far the peak dramatic event in the Phelps narrative was the 4x100 freestyle relay in which teammate Jason Lezak swam the split of his life. That thrilling video alone has been viewed over 2 million times, providing a textbook example of how unique Olympic moments are tailor-made for broadband on-demand coverage. (Note, while not a big swimming fan myself, I have to admit I've watched the last leg of that race a half dozen times. If you haven't seen it, it's an absolute must)

Meanwhile, the live streaming has been a fun element of NBCOlympics.com. I've found myself periodically perusing the little red "LIVE" flags on NBC's home page and tuning in briefly to sample sports I have no affiliation to, but are neat to dip into briefly (e.g. women's badminton or table tennis).

Overall, the user experience is excellent. Beyond the well thought-out navigation, a key part of the experience owes to Microsoft Silverlight which enables totally new broadband video capabilities. Picture-in-picture, 4 live concurrent streams, zero-buffer rewinding, and of course glorious video quality (even in large-screen mode) are all breakthroughs. So far I haven't seen or heard about any delivery or viewing glitches.

I was pleased to see comScore announce on Tuesday that beginning this month it will report two sets of numbers for online ad networks: "potential reach" and "actual reach."

Potential reach will represent the unduplicated visitors to all sites that an ad network has under contract to deliver ads to (based on written documentation), while actual reach will represent the number of ads actually served (based on a tagging mechanism that comScore will require the ad networks to implement to be counted). This is a welcome development, particularly in the intensely competitive video ad network space. In fact, it seems such an obvious move, one wonders why comScore has been so tardy in introducing it.

Followers of VideoNuze and other industry blogs know that comScore's measurement deficiencies recently set off a tempest after comScore ranked YuMe, one of the large video ad networks, #8 in reach in its Ad Focus report. With YuMe trumpeting its ranking, other industry players challenged it by noting that the full audience of MSN (a site that YuMe serves ads to) had been counted. The confusion was caused by the fact that comScore had not been delineating "potential" from "actual" reach or providing apples-to-apples numbers for all networks. Chastened, comScore re-ranked YuMe, sending it plummeting in the rankings.

All of this of course only served to create more confusion for media buyers who are trying to cobble together media plans that achieve their broadband video reach and frequency goals within budget, while minimizing their time invested. Though I'm a huge advocate of the ad-supported model dominating the broadband video landscape well into the future, I'm cognizant that the friction media buyers currently encounter is the single biggest challenge the ad model currently faces in its bid to scale and redirect spending from traditional outlets.

So comScore's new reporting is a step forward after two recent steps back. Let's hope for more forward progress.

What do you think? Post a comment.

Another update from the chaotic video search and navigation space; Mefeedia, which has been flown below the radar, has quietly grown to 5 million unique visitors per month since its re-launch in January, 2007. I spoke to CEO/founder Frank Sinton yesterday to learn more.

Frank explained that Mefeedia hasn't focused on having the largest video index (its index contains around 12 million videos, compared to blinkx's and Truveo's 120 million+). Instead it has emphasized higher-quality, ongoing "shows," which it makes available as feeds to its users - hence the name Mefeedia. The company search from 15,000+ video sources.

Frank believes that the company's secret sauce to maintaining quality is its proprietary video crawler, which is modeled on Google's PageRank system. Mefeedia's algorithm looks at social ranking factors including embedding patterns, links and usage to build the index. This contrasts with others' approaches which look inside the video itself and/or search metadata.

Frank thinks that with 50K-100K new videos uploaded each day, Mefeedia's approach is more scalable. My take is that Mefeedia is cleverly playing on the 80-20 rule - far more users will be interested in premium, well-known or well-organized content, rather than random YouTube clips. In fact, Frank said that fully a third of Mefeedia searches are "navigational," i.e. using specific terms like "Family Guy" rather than general terms like "Golf."

Meanwhile, another clever approach Mefeedia uses to maintain the quality bar and also engage users is enabling them to curate "channels" of interest within the site. This involves a user/enthusiast sifting through various feeds to assemble one master feed, which other users can subscribe to. There are hundreds of these channels, naturally ranging from the expected to the very Long Tail.

Like all search and navigation sites Mefeedia is free and ad-supported. Frank sees four types of ad implementations: keyword ads around search results (currently from AdSense), related sponsors for specific channels (e.g. Kraft for cooking channels), banners on the site, and pre-rolls. In this last category, Frank said that the company is starting to do biz dev deals with content providers whose video would get additional prominence in exchange for Mefeedia gaining the right to sell certain ad inventory.

Mefeedia's progress since its re-launch from its roots as a Vlog directory is impressive, especially considering it's a 5 person shop which has raised only $250K in angel funding. Having proved its appeal to users, Mefeedia's next challenge is to prove it can monetize its traffic.

What do you think? Post a comment.

Personalized online news is as old as the web itself. But personalized online video news is a nut that has yet to be fully cracked - although by all rights it should be. This was Redlasso's goal, until broadcasters, which hadn't given permission for their content to be ingested and shared, put an end to the young company last month.

Now comes 1Cast, a company seeking to be a legitimate Redlasso successor. Today it is announcing first round funding from wireless king Craig McCaw's Eagle River Holdings. Yesterday I got more details from 1Cast CEO Anthony Bontrager.

Anthony has correctly realized that gaining deals with video news partners is an absolute prerequisite to success. To that end he says the company will have "no shortage" of content, and also has a particular focus on "repatriating international content." Though for now he's not disclosing any details, based on conversations I've had with broadcasters, my sense is that credible companies, even when early stage, can get deals done.

Yet there are other key success factors for a personalized news aggregator like 1Cast to succeed. Three that are high on my list are user experience, audience growth and revenue generation. Miss on any of these three and I think the model fails.

From a user experience standpoint, Anthony says creating a new personalized "micro-cast" is a simple three step process. That sounds promising, though since the beta won't open till later month (with full launch late in '08), I can't judge the specifics yet. And the wildcard is how content providers will ultimately react to having their videos mashed together with competitors' videos in a single micro-cast.

Growing an audience is a more daunting. As we all know, the web is incredibly noisy, and users have well-entrenched news-gathering habits. Yet there is white space in personalized video news. Anthony said that while 1Cast will be a central hub, he's focused on "channel partners" as well, and portals in particular, to grow traffic. Deals with majors like Yahoo, AOL, MSN, and others would be a huge win, but are notoriously hard to clinch for startups.

Last, but not least is revenue. Even assuming an audience can be built, optimally monetizing it is a challenge. Anthony said they're working with an undisclosed ad network and will also build their own sales team. Direct sales are important as living primarily off an ad network's splits will not produce sufficient revenue for 1Cast.

Yet even a direct sales team isn't a panacea; Anthony mentioned that some content providers want to sell any new impressions 1Cast generates. That's consistent with how I understand other Syndicated Video Economy deals like these work as well. But like other aggregators, that leaves 1Cast with a swiss cheese inventory situation that is complex to sell. Then factor in that some inventory will be essentially local in nature (i.e. generated from local video news) - which really requires a local sales orientation to fully monetize - and complexity grows still further.