As YouTube struggles to make money on advertising, according to a story today in the Wall Street Journal, and reportedly may resort to pre-roll ads (which consumers hate, but advertisers love), maybe they should take a look at some of the innovative ad units coming out of VideoEgg. Today, VideoEgg is launching five new kinds of Web video ads. They are called:
* LIVE: Use real-time RSS feeds to continually update the ad experience
* LOCAL: Deliver zip code-specific messaging
* RICH: Easily deploy and track a rich multi-video ad experience to increase user interactivity
* SHOP: Bring the browser to the user, merchandising multiple items in a single real-time ad experience
* SHARE: Viral capabilities help spread the message through virtually any communication or social channel
The LIVE lets advertisers update the text or images via RSS feeds. In the image from the NBA ad above, the ticker at the bottom and the player’s faces change depending on what games are coming up. The LOCAL ads let advertisers ad a map button, so a Subaru ad could bring up a map of local Subauru dealers. The RICH ads offer different tabbed widgets at the bottom of the ads for different versions of the ad or to more information. The SHOP ads provide deep links to the advertiser’s online store where people can buy the DVD or cell phone being advertised. And the SHARE ads can be grabbed and spread virally on people’s blogs, MySpace and Facebook pages. You can see examples of all these ads here
All of these ad units are designed to increase viewer engagement, and in fact VideoEgg only charges advertisers if viewers engage with the ads in some way. Otherwise they are free. They call it a cost-per-engagement (CPE) model, as opposed to cost-per-thousand views (CPC) or cost-per-click (CPC).
YouTube could learn from these efforts. It is having such a hard time selling ads that it will fall short of expectations, according to the WSJ. Falling short, for YouTube, means revenues of about $200 million this year. The days of building market dominance at the expense of revenues appears to be over, with Google sales chief Tim Armstrong spearheading an effort dubbed “Project Spaghetti” to fix the “105 problems with YouTube’s ad sales,” reports the WSJ.
It looks like Citi analyst Mark Mahaney’s $500 million estimate for YouTube revenues in 2009 is going to be hard to reach. One way to quickly get there, though, would be to put pre-roll and post-roll video ads on the estimated 4 percent of videos that are advertiser-friendly (i.e. are not inappropriate or copyright-infringing—YouTube can’t plaster regular display ads on most of its pages for the same reason).
With more than one billion clips viewed per day, that 4 percent is big enough to generate some serious cash. But pre-rolls and post-rolls (10-second to 30-second video ads before and after each clip) kill the Web video watching experience. They interrupt the flow of watching videos online, which is controlled by the user. The types of video ad units that VideoEgg is experimenting with are more along the lines of what YouTube should be doing. Just as advertisers only pay if someone clicks on one of its search ads, they should only have to pay if someone chooses to engage with a video ad.
The types of ads VideoEgg is releasing may or may not be the right answer, but they are a step in the right direction. YouTube could make those types of ad units the industry standard by its sheer dominance. But if it caves and starts putting up pre-rolls and post-rolls, then these new forms of advertising might die on the vine.
I got it,thanks share this info:)
They did the same for nba finales
Nath
http://www.them...rfulcompany.com
Hmmm.. I don’t think this is particularly innovative. We’ll have to see how it works for for VideoEgg and what the demand from advertisers will be.
Personally, I think there’s going to be a big consolidation/fold-up of many 2nd/3rd-tier online video providers in 2H 2008/1H 2009. Google can afford to bank-roll the YouTube service, but I don’t think there’s a lot of willingness in the VC community to keep these companies on the dole. Particularly with the emergence of Studio/Network-backed online channels such as Hulu. There are a couple of companies already on Series-C and D financing rounds.
BTW, I think “opposed to cost-per-thousand views (CPC)” should be
“opposed to cost-per-thousand views (CPM)”
Wow! There’s a lot of very good and somehow instantly familiar ideas in these new ad formats.
Nothing but Flash in Flash floating ads.
Innovative in 1998 old in 2008
User initiated ads are a waste. The viewer is already compelled to watch the ad so you reach no one new.
Youtube still remains traditional and all other warriors are on the rise!
Summer fashion {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/IoMJqlhawy_th1.jpg”}”title”:{”value”:”Summer fashion ”}”videoUri”:{”value”:”http://www.seesmic.com/video/9s7CfxScfW”}}}
Well, they’ve got snappy names for their ad merch, Madison Avenue loves that stuff, but YouTube is SUCH A BIG GORILLA and any innovation that leads to profit in the online video advertising space will be instantly copy-ified and duplicate-ized.
This is a desperate attempt from an ad network that has never been able to realize it’s vision, and seems to be reinventing itself every 2 quarters. Its not the ad format that is the problem. The problem is simply that the Top 5 sites (YouTube, Myspace, Hulu, Yahoo and MSN) own 90% of the daily views on the internet. And each of these has their own sales force, their own ad networks, etc. So where does it leave the VideoEggs, Yume Networks, and others? Fighting over a couple of % points. As somebody above predicted, they will all die in the next 2-4 quarters.
The notion that pre- and post-roll ads hurt the viewing experience (as with ads anywhere on the internet for that matter) is total and utter hogwash perpetrated by the internet intelligentsia. Users DON’T mind ads as long as they don’t overwhelm the utility of the content. If pre-roll is done right, it doesn’t detract from the user experience one bit — and I’m not talking about measuring impact by what users say, but rather what they do. In very few cases, have users ever fleed sites because of ads (Techcrunch is a good case in point: traffic has increased plenty at the same time ads on the site have increased dramatically — we’re all still here!). To do pre-roll right, YouTube should just create a transparent policy — in effect a deal with their users — that says: a pre-roll ad will never be more than 7 seconds long (sorry advertisers), and you’ll never see more than one ad for every 4-5 videos you watch. And if you want to take that one step further: you won’t see an ad of the first video view, which is fine, as it seems every time I watch one, I end up watching 10. It’s really that simple, and I promise you: users won’t disappear.
Nothing new here at all. So old that it may seem new. RSS feeds into banners? Eyeblaster ‘99 doing dynamic pricing for airlines geotargeted out of your local airport. Local? Geotargeting. Plenty of providers doing zip-code level targeting. RICH? Haven’t pointroll, eyewonder etc all been doing this for years? Same for “forward to a friend.” Everyone can download widgets out of banners now.
Completely not news, let alone newsworthy. VideoEgg is stuck trying to monetize content that is essentially not monetizable right now to any degree that people are comfortable with.
Kudos to Blanc & Otus, their PR firm. I guess when you’ve got a ton of tech clients in techcruch with real news, they’ll occassionally throw you a bone on a slow news day.
THERE SHOULD BE A “THERE SHOULD BE ONLY ONE” VIDEO WITH ARRINGTON AND HIS RIVALS. YOU KNOW, “THERE SHOULD ONLY BE ONE ALPHA TECH BLOGGER?”
DO IT!
People simply will not embed videos from sites that embed inline advertising.
Ya these video ads are gaining popularity.
Yes great idea but the technological process they intend to leverage is already patented and owned by someone else, a small company called Modavox.
They are in litigation against AOL for their acquisition of Tacoda and rumor is they own some of the most valuable IP in the internet space, could be why their stock has been moving up in this weak market lately. A recent report put the value of their IP potentially well into the hundreds of millions, potentially a billion and other articles have asked whether they might be the next big patent licensor like Qualcom and Research in Motion.
I’m hearing a few big guys are starting to kick the tires on this small company because whoever owns them would secure a serious weapon against their competitors. I’m told one of their patents pending and soon to be issued takes aim directly at YouTube.
Great idea VideoEgg, too bad you are again late to the party trying to exploit someone elses already patented technology. I guess if you can’t innovate yourself, steal it from another company? Hardly a viable business model.
CraigStein writes: “This is a desperate attempt from an ad network that has never been able to realize it’s vision, and seems to be reinventing itself every 2 quarters”
Hogwash! videoegg invents a new ad-format every quarter, not every two quarters.
RE: #15
What the hell are you talking about? Practically every ad delivery technology is based on another companies patent yet not a single suit has been won over the use of these delivery algorithms. Keep dreaming of your little companies pay day – it wont happen. The technology moves so much faster than the USPTO and the Lawyers. look at 24/7 real media for an example of this – they own the patent on ad serving and were sold for a pittance of the market potential.
by the time it comes to a settlement it will be irrelevant.
Videoegg is burning through millions a month, they are run by inexperienced amateurs and are trying desperately to find a business model. The problem is that their publishers are social networks and these sites do not produce results for the advertisers.
wow. a widget. almost as big a waste of time as a seesmic comment.
It seems to me reinventing yourself each quarter only magnifies your inability to gain traction with a single offering or product. While they have a significant amount of funding, it appears they are a little desperate…. http://www.read...ex.php?RTA=web2
Interesting.
A____ writes:
“Videoegg is burning through millions a month, they are run by inexperienced amateurs and are trying desperately to find a business model. ”
I couldn’t agree more. VideoEgg is a wanna be Madison Ave platform. This is what happens when you hire people like Troy Young to lead your troops. His unprofessional behavior does not inspire the team nor does it attract top talent needed to compete against the likes of YouTube. VC, you are wasting your money.
Desperate? Have you seen their list of advertisers? (http://www.vide...etwork/adframes) They’re kicking but in actually building a media brand that resonates with advertisers, which Google seems disinclined to do. They’re not hosting videos anymore so their costs are way down; I’d bet they’re sitting pretty right now raking in money on high value custom units…
#22 Ryan,
A list of advertisers is your guage of financial sucesss? HA HA
You must work for VideoEgg or your Dad is one of their VC’s.
There is no money in their long tail video space – its a game of pennies where they play with hundred dollar bills.
They will be DEADPOOL by Q1 09′
Well, I don’t have a copy of their financial statements around, do you? So I’ll use what proxies I can.
If you paid attention you’d also see that they’re not focused on monetizing long tail video – they’re PLACING video and rich ads in standard banner units, across a broad range of sites with or without videos.
And no, I don’t work there….or have a VC dad, unfortunately. That’d be nice. I just see a company that’s continually been pushing the online advertising conversation forward and is leading YouTube by the nose to real monetization, and it sucks to see them ripped on so hard by folks on Techcrunch from whom I expected more.
#23 writes: “There is no money in their long tail video space – its a game of pennies where they play with hundred dollar bills”
Not so. It is just that nobody has figured out how to monetize the long tail in video. Google makes billions with AdSense on long tail text….
Sounds like you guys are drinking too much of it.
VideoEgg has really good PR and a group of well connected VC’s that drive their press (TechCrunch is a great example). They dont make any money and are on their 3rd business model in less than 3 years. Their management has no advertising experience and they burn through a TON of cash.
Would you invest your money in this company?
Remember they own nothing. They are an ad broker who is at the mercy of their publishers and advertisers and any one of the 3 dozen top ad networks can put them out of business in a matter of weeks. Their technology is readily available from a number or ad delivery companies and their advertiser relationships are brand spanking new (they are a novelty buy for many brands).
Are you still drinking their cool-aide?
With the costs of delivering the video greater than any CPM derived from the ads, the long tail world of UGC and Social Media is a waste of time and money. Its a war of attrition and Google and Yahoo will win.
Last year it was Video Content Management and Players, then it was A Video Ad Network, now they are a Widget network for social media.
Next they’ll be a Widget Video Ad Network Exchange with a focus on Chinese Social Media.
Love the comments. Especially VCPit… weren’t you the guy that couldn’t answer direct questions at your VideoEgg job interview. Reveal yourself, weasel.
A few points to add to the discussion….
: Yes everyone, VideoEgg has continued to evolve over the past 24 months. Advertising was always part of the plan.. that’s why i joined the company. We started by pioneering new types of video advertising on our platform. We continue to offer this ad product. We have moved beyond our platform because that was a smart business decision. We’ve added pages and games to our ad offering. SINCE WHEN IS EVOLVING AND GROWING A BUSINESS IN RESPONSE TO MARKET OPPORTUNITIES A BAD THING? Get a grip.
: Clients? Major brands? large budgets? Sales success? Positive reaction from Madison avenue? YES TO ALL. IN FACT, WE JUST HAD OUR BIGGEST MONTH IN HISTORY. Our business continues to grow at a healthy clip. How would you know what we are burning, how we are investing capital, what our financial opportunity is? I find the uninformed commentary pathetic.
: We will continue to innovate and push the market forward with new accountable pricing models, new thinking around the ad experience, targeting innovations etc.
Want to have an intelligent conversation? Lets talk. But this speculation and stone throwing is a waste of everyone’s time.
Troy Young
troy@videoegg.com
Wow, troy, I can’t believe you would post something like that. I’m connected to you and your company financially (indirectly), so I won’t post anything beyond that. And no, I have never interviewed with you. But I know people in your office right now who wouldn’t give a rat’s ass if you jumped off the Golden Gate Bridge.
VideoEgg may have some success today, but you have no defensible assets against the likes of Youtube. Keep posting…at least your PR folks will have a job.
Hey Troy,
I would be shocked and surprised if you said anything other than “VideoEgg is the leader and we are doing great”. You are after all the CMO of the company. Never met a Marketing person that wasnt full of shit but thats why they pay you that 285k a year salary isnt it?
Good businesses (and biz models) are solid from the get go, they stick to their plan and build the business. They dont shift completely out of their core stregnth and chase the lastest and greatest more often than the calendar changes. Can you name a single successful company that has been successful because they changed their core business 3x in a 2 years period?
I’ll bet that you are gone from the pay roll by the end of the year.
Come on back to this thread in January and tell us all how great VideoEgg is!
First things first. I am here. Visible. Accountable. Come on guys… say hello. Don’t snipe from behind your keyboard.
Connected financially? Even more interesting. Do you want to sell me your options?
“Defensible assets against the likes of Youtube”? Different business, completely.
“Chase the latest and greatest”…. not sure what that means. We have extended our adplatform to new environments, yes… thats smart and we will continue to do that to create value for advertisers.
Video Egg – founded in 2005 “…matching non-profit organizations who needed public service announcements (PSAs) with a nationwide network of filmmakers”
2006: A video content management platform (via their player) – FAILED
2007: A In-Video Advertising Network – FAILED
2008: A Rich Media Widget ad network with a focus on Social Media
Looks a lot like you guys are chasing the latest and greatest to me.
Please name a single company that is successful after 4 distinctly different business models in 3 years.
We’ll be waiting for your answer
PS> I never worked for you, with you, interviewed you, interviewed by you or anyone at VE nor do I have any relationship what-so-ever with your company. I just enjoy calling a spade a spade and grow tired of the same ol’ crap regurgitated on this site.
Guys.. gotta get back to work…. No time to do the research… but clearly business evolve as they mature. Didn’t Fred Wilson say that something like 70% of his portfolio changes the business plan significantly? Moving on.
BTW, you got your facts wrong again…
: The original non-profit play has nothing to do with VideoEgg.. same guys tho.
: we STILL offer in video advertising – this is part of our network (see videoegg.com)
: we have always focused on social media
: widget ad network??? did i say that?
someone sent me the link…
“Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial
transformations of their businesses between the time we invested and the
time we sold. That means there a 2/3 chance you’ll have to significantly
reinvent your business between the time you take a venture capital
investment and when you exit your business.”
http://www.unio...arly_stage.html
touche’
Its been fun Troy but I have a tee time to make
Of to the links!
A,
Find it quite interesting that you mention 24/7 Media. Didn’t Dave Morgan and Gil found that company? The same Dave and Gil that founded Tacoda and sold AOL a bill of goods by stealing another company’s patented technology and selling it as their own for $275 million and is being sued because of it??? I now clearly understand the angst in your prior post. It’s quite personal.
Ironically it also appears that Troy is indicating you have an association with Union Square Ventures? Say it isn’t so! Isn’t this the same Union Square Ventures that funded Tacoda??? The same group that all slapped each other on the back along with Morgan when it was sold to AOL???
I get it now. Maybe you could tell us how many millions were held back by AOL from all of your checks pending resolution of the patent litigation suit?
I guess if I were able to profit millions by selling a company with no proprietary or patented technology, that another small company rightfully owned and invented, I too perhaps would share the same arrogance you’ve so graciously displayed to all of us here.
I tried Videoegg ads for a while. Their ad-inventory is extremely limited. They couldn’t fill even a few thousand impressions a day for me. And when they did, they were showing the same ads over and over again. I guess that’s because you can’t get a lot of video-ads from advertisers. So I had to take the videoegg ads off.
Moreover, I don’t believe in the Cost-per-Engagement ads. Cost-per-K-impression ads work because advertisers want their brands in front of the user. So, they pay for every chance to be in front of the user. In that sense, CPE ads are similar to CPM — as the brands do get displayed to the user in a fancy video format. Only the publisher doesn’t get paid if the user doesn’t specifically engage with the ad. Take an example of the NBA ad. Do you really need the user to engage with the ad to send the message?
troy is obviously a schmuck. dude needs a biz and/or marketing guy to take over. he is clueless and needs to remove himself from the discussion he obviously can’t handle. defensiveness is very unbecoming, and quoting Wilson, well, go look at sequoia’s thoughts (unless you’re funded by USV). Hey, you’re young you’ll have other chances.
Hey Bob,
I think you have a few names confused. David Moore was (and is) the the founder of 24/7 – he is still the CEO under WPP. David Morgan is the founder of Tacoda. So they are not the same person.
I am neither affiliated with Square Ventures or Tacoda so there is no bad blood or angst from my perspective. What I have is keen insights into the inner workings of the Video ad market and the ad network world. My experience and knowledge tells me that VideoEgg is not in a position to succeed. Whether its due to their constant change of focus, their myopic understanding of the ad market or the fact that the in-video space is not yet able to support a company with a burn rate in the mid 7 figures; what I am trying to get across is that these children have no place at the head of the table.
For some reason this company is always in the spotlight even though they are neither innovators or industry leaders.
That’s all…
Anyhow – I shot a 76 today so I am quite happy with my afternoon spent on the links. How was your afternoon?
@38: Frank, what VideoEgg needs is for you to take over, or maybe some other TechCrunch regular like A______ .
Clearly the people who post regularly on TechCrunch know a lot about the tech industry. They all run their own companies, hell they all sold 3 companies to Google already. They post here to share their wisdom and hard earned success tips, not out of some overpowering inferiority complex.
It’s hilarious how you fail to recognize that you’re nothing more than a pathetic wannabe with all your know-it-all bluster. Troy is just a schmuck? How should we label you then, other than a self-delusional looser?
http://www.notebookera.com
This looks like a great idea! they had announced it a few months back but apparently they got it to work!
A lot of people don’t know how to monetize social networks, at least Newegg does!
sorry i didn’t catch this in the heat of the moment, still fascinating two days later. there’s a lot of misinformation on this thread, and a lot of emotion, but what’s missing is a real understanding of what advertisers want and where the market is going. advertisers want cost per engagement models, so they’ll get them. advertisers want innovation, so they’ll get it. video in page pays better than traditional display banners, so publishers will take them. so that means there’s money in this business. not every company will be a google, that’s too high a standard. success is relative, but building nice sized companies with solid revenues in a fun environment sounds like a good objective and i know that’s what troy and VE are doing as are others in the space. i’m on the front lines in this business as well so you may say i have a vested interest in making it sound good, but i’m here to tell you, it’s for real….