Videoegg, the one-time video startup that sort of competed with YouTube and sort of competed with BrightCove (very different companies), has basically transitioned itself into a very robust rich media advertising network. In August 2007 they started selling ad units for Facebook applications. Since then they’ve expanded to include advertising for many other sites, including Meebo, Flixster and others.
Today at an event in New York they’ll announce a business model change, moving away from charging advertisers a cost per thousand impressions (CPM) for their display ads to a new model where advertisers pay only when a users has engaged with the ad. The new product is called AdFrame Brand Response Network - quite a mouthful.
Engagement is defined as clicking on the ad, or hovering over it for a second or two. Once that happens, a new Flash overlay pops up over the content on the page and shows a video, Flash game and other content. Once the Flash overlay is triggered, the advertiser pays a fee of $.50 - $1.
VideoEgg CMO Troy Young says its a much better deal for advertisers, since they pay only when they have a verifiable action by a customer. And publishers, while they don’t get a guaranteed fee per impression, may make more money anyway. VideoEgg says they were able to charge $10 or so CPMs for their ads previously. The new ads, which have engagement rates of .5% - 9%, generate comparable CPMs of $2.5 to way above $10. Plus, Young says, advertisers are much more comfortable buying more inventory under this new model, so there is much less unsold advertising. That last sentence is key to publishers, who care about revenue per page view on average, not just small ad buys at high CPMs.
Microsoft has signed up for the new product as an advertiser, and will use it to distribute videos promoting Microsoft Office (an example ad unit is here). There are also a number of examples on the product home page.
VideoEgg is serious about this business - they’ve got 25 full time sales people out there selling ads for publishers in the network. The company has raised a total of nearly $34 million over four rounds of financing.
meh, you have to be Microsoft or Coke to advertise with these guys.
no room for a little guy like me
well, the little guys can place the ads, and make a few dollars.
If you want to advertise for them on your site:-
“We’re looking for partner sites and widget makers that have more than a minimum of 10 million monthly video streams. We’ll help you monetize your traffic and provide a system that you can use to deliver and sell your inventory. Contact us and we’ll can talk you through our business approach and integration process.”
http://videoegg.com/adplatform/get_started
am sure I am missing something because 10 million a month is a huge number.
This is a great move for them and the industry. Moving away from CPM to performance will reward the micropublishers more for their valuable ‘targeted’ audiences.
is it any different from the msn messenger’s flash ads on the bottom? it always play in a small banner quietly, but once you hover on it, it shows big.
@ZiZi & VideoEgg
I agree with you Zizi, I have yet been able to figure out why there is ANY “minimum streams” or “plays” for any advertising program… who cares where your ad ends up being clicked on as long as it’s one that is qualified! Maybe I am viewing videos about xyz and I happen to be in the market for cars… if I see an ad in the video, I will click on it. They are going for the cream of the crop when, in all reality, they should simply allow anybody and everybody to participate. This is a NUMBERS game, not an exclusive club… open it up for the very very little guys! A click is a click, $$$ is $$$…
Jon
http://woodmarvels.com - Create Unique Memories
Should be great for porn sites with a lot of traffic
Prediction- by december they will be a ssocial network
VideoEgg says they were able to charge $10 or so CPMs for their ads previously. The new ads, which have engagement rates of .5% - 9%, generate comparable CPMs of $2.5 to way above $10.
Uh it say that they used to generate $10 CPM’s The new ads generate $2.5 is this a typo cause $2.5 is not way above $10 its way less
And I’m with Zizi & Jon too.
The CPM model is usually a waste of $ — CTR is just too low on ads to justify such fixed expenditures.
So VideoEgg is simply giving advertisers what they are voting for with their wallets. Everyone is getting out of the CPM game — remember Facebook’s original “Flyers” that cost $10 CPM?? With a CTR on Facebook of roughly .2%, that means they were paying $5.00 per click! The advertisers voted with their wallets, and went with Google and others instead. So, Facebook basically scrapped the CPM model and went with a Google-style CPC bid system.
This bid system also put advertising within the reach of the little guys — when you can get some decent traffic at as low as $0.01 a click on the likes of Google, that means you can make a go of things with a $5.00 per day budget. I’d choose to grow my business over a Latte any day.
And that means the ad network is making money too. Google got where it is, much like WalMart did — on the backs of a hundred million “little guys”. It’s a volume business, when you’re charging as low as a few pennies a click, and STILL pulling in billions every quarter… That’s something worth copying if you’re an ad network.
Let the little guys in VideoEgg! You’ll be better off for it.
Contact us and we’ll can talk you through our business approach and integration process.
I remember when VideoEgg was a little web site for recording, uploading and transcoding video. Back then their goal was to make video on the web as easy as frying an egg.
At least they are nimble enough to keep changing focus…
Demise of CPM to performance based measures predicted for awhile, but a growing cadre of players leading to a critical mass — or a major entrant fully committed — could quickly bring about the transition.
Hello,
Sorry in advance.
Just trying if this works.
i think they are smart to continue with both models (cpm and engagement). we are discussing these option with our clients for our coull engage video format but they are not ready to move to engagement rates as of now.
I’m not saying this to flame, but I believe VideoEgg will fail for one simple reason, Troy Young himself. I’ve met this guy personally and he is unprofessional and an ass. I would never work with him, and people like that will attract (like minded) or repel good talent.
Note to investors in VideoEgg: you might wanna replace him if you wanna get somewhere with your money.
The only way that video ads will truly be beneficial are to tie them to a tangible product that users want and are willing to opt-in their personal information which allows the ads to be targeted.
With that said, TurnItUp Media, a new music destination is doing just that. We have created a new ad-based model that provides users the ability to download 100% DRM-free Digital Music downloads which are of course, completely free to them. All they have to do is watch a highly targeted video ad based on an advertisers’ campaign settings and the users’ profile. We use our customized blended marketing technology to guarantee the best ad placement for each song a user downloads. After watching the ad, the users are then required to enter in a 5 digit security code which then unlocks the downloaded music file.
What does that mean to the advertiser? A guaranteed ad view every single time a user activates a song. We also do not charge anything extra if a users clicks thru either. Good by Click Thru Rates and Cost per Clicks! To put it simple as possible, you pay for what you use!
I look forward to talking to you soon.
William Fleming
http://www.TurnItUpMedia.com
888.598.7778 x8160
Way to go William spamming a tech crunch post. Pleas get a clue before posting and reread marketing 101 from college. In any event the demise of CPM is simply not true. That would equate to the demise of every other advertising medium on the planet ( I dont know of too many interactive roadside billboards and frankly I hope I never do). Video Egg has another good platform that should be used side by side with a CPM model.
That’s the first step in new generation of ads, more suitable for web2.0 than Adsense for example - in my opinion. It’s also the first one that is usuable with ajax pages, as you don’t have to reload the page a 1000 times to get any revenue. So hopefully the user experience and revenue will go in pair now. I hope to see more innovation like it in the future.
@16: Said like a true jackass. That was one of the best Anonymous Coward ad hominem attacks I’ve seen. You don’t even have the balls to say who you are, huh?